HIPs will not stop sales falling through

Research released by the National Association of Estate Agents today claims that most failed sales are not caused by problems the packs would tackle, such as surveys, but broken property chains and gazumping.

The Government’s planned introduction of Home Information Packs (HIPs) in June next year will do very little to prevent residential property sales falling through, according to research by the National Association of Estate Agents (NAEA).

The NAEA surveyed a sample of 1466 adults throughout and with the help of an independent research company.  The respondents were all homeowners aged over 18.  Of these, more than 30% said they had experienced a breakdown in the house sale process at some stage during their journey on the property ladder.

Just 18.3% said this breakdown was a result of unfavourable survey findings.  The majority, at 60.4% said their sales fell through due to either a broken property chain or a higher offer from a competing buyer.

What is more, almost 60% of respondents who had encountered a broken sale did not feel that providing information such as a Home Condition Report (HCR) or legal material about the property up front would have done anything to prevent the sale from falling through.

Peter Bolton King, chief executive of the NAEA said: “The Government seems to be of the opinion that the majority of home sales fall through due to unexpected flaws unearthed at a late stage in the process via the survey or legal problems.  Our research proves what we already knew, that this is clearly not the case, and that most sales collapse as a result of events outside anyone’s control.

"We have found that almost a third of sales fail due to a problem with a related sale, which proves that a house sale is only as robust as the weakest link in its related chain.   Whether HIPs speed up the process is irrelevant ��" the weak link will still be there, because people will always have the option of changing their minds.”

The NAEA survey also repeated the question asked in a previous survey, whether respondents had heard of the term Home Information Pack.  Almost 30% of homeowners questioned admitted they had not heard of the term, down from almost fifty percent of respondents questioned in the previous quarter.  Peter Bolton King says; “While it is encouraging that a higher percentage of those questioned now understands what a HIP is, there is clearly a long way to go in less than a year in terms of educating the public as to the profound ��" and possibly expensive ��" changes due to take place.”

Sellers were also asked again whether the fact that they may have to wait up to 14 days while their pack is put together before marketing their property, and may face withdrawal costs of up to £1,000 plus VAT if they choose to remove their property from sale, would deter them from putting their home on the market.  Almost 60% said that this would indeed be a deterrent, down fractionally from 73% back in March.

Peter Bolton King said: “This research again confirms the fears the NAEA has about HIPs.  I urge the Government to take heed and consider in more depth the numerous practical implications of introducing HIPs to the public on 1 June 2007.”