Home Information Packs (HIPs) - Evolution of a Policy.

Some members of this government believe that they do things a lot better in Scotland. They do not say it but their policy says it for them. Scotland has a different legal system and the rules relating to the conveyancing (legal transfer) of properties are different. Indeed, people often say that they are quicker and easier in Scotland.

The buying and selling of property is something that MPs think that they understand. There
must be thousands of MPs surgeries full of people complaining about the slowness of the process.

New Labour decided that they could speed the process up and make us more like Scotland.

The idea was simple. The seller would buy a pack in which there would be a survey, searches and home condition report. Then the buyers solicitor would be handed this document and get on with the purchase.

This seemingly simple idea was greatly flawed. Indeed, it carried with it many of the abiding sins of New Labour, which can be summarised as follows:-

A superficial understanding of the process

Common law is adversarial and the law of property has a golden rule “caveat emptor” (Let the buyer beware). A solicitor acting for a buyer is going to be very wary of a survey produced by a seller’s solicitor. In addition, most local authority searches run out after three months. It is likely that the buyer will have to get his own survey and so two surveys will, most likely, have to be produced (three if you count the survey required by the purchasers mortgage company). So the new process which will require an extra survey and may need an extra local authority searches. This will slow things down. not speed them up.

No understanding of history

The Law Society of England and Wales (which regulates solicitors) introduced a scheme called “Transaction” in the early 1990s. This scheme was very similar to HIPS, in that the searches were provided by the seller. Also, the seller provided answers to standard enquiries. It did not speed up the process. New Labour are incapable of learning the lessons of the past.

Little understanding of business

The professional organisations (e.g, The Law Society) supported HIPs as an idea for a long time. This was because they saw HIPs as the way in which their members might wrest control of the conveyancing process back from the estate agents. At the moment sellers go to estate agents who then normally introduce them to solicitors. The estate agent charges about ten times more than the solicitor but stupid solicitors still send clients bills which include the estate agents fees and so the stupider clients associate the huge estate agents bill with his solicitors bill. In fact deregulation of the conveyancing market has meant that legal fees are about the same as they were in 1970. The same sum not the same value. The Law Society saw the introduction of HIPs as a way of controlling the process, as new sellers would need a HIP and might go to their solicitor for it. A person who did this would probably use the solicitor who provided the HIP. They set up a scheme whereby solicitors could buy HIPs from a third party under Law Society sponsorship. The Law Society would not launch an attack on HIPs in these circumstances and neither would the other professional bodies. So, whilst the Law Society and other bodies criticised the details of HIPs, they would not attack the whole concept. Some estate agents realised that they might lose control of the process and attacked HIPs but no attacks hit home until the television property experts started to unpick the concept. New Labour are incapable of seeing how a policy will be distorted or affected by commercial interests.

A belief that they could produce instant experts

There were never going to be enough newly trained experts to deal with Home Condition Packs, a central part of the HIPs process. New Labour were asking for a new profession to spring out of the ground. Unsurprisingly they were “made optional” (read scrapped) but the Energy Performance Certificate remained a mandatory item. Again, there were never going to be enough people to do this work and this is what led to the collapse of HIPs as a general concept for the whole property market and its restriction to four bedroom houses. New Labour do not understand the concept of expertise and think anyone can be an expert.

Trojan horse

HIPS were to be used for another purpose. This was to ensure compliance with a European Union Directive involving energy assessments of properties. New Labour could say that they were speeding up the process and they would actually be implementing an EU directive. The process would also help with council tax revaluation. New Labour are not honest about their aims.

Michael Gove MP led a very effective campaign to emasculate HIPs but a face saving compromise is coming in tomorrow. HIPs will be for houses of four bedrooms and above.

The Conservative Party needs more such campaigns and a unit which will identify mistakes of the future. It needs some intelligence. It does not need bickering idiots attacking the leadership.