Commercial insurance article archive
HIPs and EPCs roll out for 3 bedroom homes
The rollout of home information packs (Hips) continued earlier this week as homes with three bedrooms came under the scheme.
But while the expansion of Hips carries on apace, it is matched by the continued sparring between the pro- and anti-Hips camps, with accusations emerging this week that major mortgage lenders did not trust parts of the packs.
A report in the Daily Mail claimed that the high street banks Barclays and HSBC, which are heavily involved in home loans, were unwilling to accept the information provided by local authority searches in the packs.
According to the newspaper, this would mean the house buyer would end up having to pay twice for the same searches, such as those for planning applications, building consents and the quality of drainage - doubling of the cost of a Hip to £1,000.
However, the newspaper's claims were denied by both HSBC and Barclays, who said that instead of demanding whole new checks be carried out, they just want them to be overseen by a solicitor.
According to a HSBC spokesman, this does not represent a change of stance for the bank as he told the BBC: "We have never accepted private searches rather than those from a solicitor."
He explained that the reason for this policy is to make sure the search will be accepted under the terms of a customer's personal indemnity insurance.
This position was backed up by a spokeswoman for Barclays, who said that the bank preferred to have a solicitor check the search, but would accept a personal search if the buyer accepts the risk to their insurance.
"We are not demanding that house buyers spend more money on more searches," she said.
Collectively, Barclays and HSBC currently make up around ten per cent of the new mortgage market in the UK, so there could have been huge complications if the banks had publicly opposed the Hips scheme.
But even with these assurances that the banks are on board, the Law Society warned that buyers should be wary about following the advice of their bank in this case.
This is because a search conducted by council staff is less likely to be seen as suspect by the seller than a study carried out by people employed personally by the buyer and recommended by their solicitor.
A spokesman for the Law Society said that if some banks were insisting that solicitors got involved, the lenders should provide a list of personal search firms which they vouch for - rather than leaving that up to the solicitor and thus casting a degree of doubt over the neutrality of the search results.
Such disagreements have emerged time and again during the short life of the controversial Hips scheme.
And in many cases the compromises reached to keep the policy alive have not been wholly satisfactory, such as the cutting of previous proposals to include a home condition report in the packs and the emergency postponement in June over concerns that there would be a shortage of inspectors to check homes and issue energy performance certificates.
This led to an introduction of the scheme step by step, but even that has not been a total success as recent claims suggested the staggered start to the scheme has now led to a surplus of fully-trained inspectors in relation to the number of Hips-eligible houses on the market, according to packs provider Hips Direct.
12 Sep 2007
