Further HIPs loopholes revealed
Following reports that buy-to-let (BTL) properties, and properties under auction may be exempt from HIPs, brokers have questioned the need and practicality for HIPs on new build and off-plan properties.
An industry source said: “Surely new builds won’t have to have a HIP and the legal information needed would be practically impossible. How can you report on a property that hasn’t been built? The land registry in itself would pose a problem.”
Richard Sexton, director of business development at e.surv, added his belief that new build properties would be exempt from HIPs. “It is logical that there is an exclusion on new build properties, but the Office of the Deputy Prime Minister is constantly updating the properties that are, and are not, covered by HIPs. I can see a partial HIP being asked for from the legal side of matters but there is no sense getting a Home Condition Report (HCR) for a property that either has not yet been built, or has a guarantee certificate from the builders.”
However, Robin Marcus, director at Easier2move (e2m), expected HIPs to have a beneficial affect on the new build market. He said: “At the moment HIPs will be required for new build properties, but they will not require a HCR. Instead they will have to have a National House Building Council (NHBC), Zurich or similar warranty confirming the property’s state.”
He added his expectation that new build would continue to grow, with HIPs accelerating this growth. “HIPs will benefit the new build market. It will speed up transactions and diminish costs for the buyer.”