Home buying reforms

The Labour Government has a Manifesto commitment to reform the homebuying and selling process. The aim is to improve the process for consumers - homebuyers and sellers by making homebuying and selling easier, less stressful, more transparent, more certain and faster. Over the past 10 years, work has focused on achieving this goal via the introduction of Home Information Packs (HIPs) which will provide key information about a property at the beginning of a transaction resulting in better informed and prepared buyers and sellers. The Housing Act 2004 implementing these reforms received Royal Assent in December 2004 and the new scheme will be introduced during 2007.

Home Information Packs will include two categories of searches, namely:

• Required searches which must be included in each and every HIP.  Searches in this category include, for example, a local search and a drainage and water search.
• Authorised searches which are all other searches and these searches can be included in a HIP on a voluntary basis where a property is located in a particular area, for example a coal mining search if the property is located in a mining area. 

For all searches, the HIP Regulations set out what information must accompany each search, for example, the name of the organisation which compiled the search and details of any redress scheme the organisation is part of. For required searches, the regulations set out exactly what information must be included in the searches and prescribes insurance cover to protect the buyer, seller and a lender.  

There are no equivalent requirements for authorised searches.  This creates an incongruous situation in which the Government appears to be promoting a two-tier approach to consumer protection, depending on whether or not a search is commissioned in every transaction.  CoPSO has strongly opposed this proposition, arguing that there should be one set of standards within the regulations which apply across all the searches.

On 22 May 2007, the Government made a further statement delaying the introduction of HIPs until August 2007 (Read the Secretary of State’s Statement on HIPs - Word .doc). The latest proposal is that HIPs will be introduced on a phased basis, commencing with four bedroomed properties and larger from 1 August 2007. Revised regulations will be introduced to come into force by this date.

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