Spring Move calls for better regulation
Spring Move is calling for the industry to be better regulated to give people more protection from rogue companies producing sub-standard packs. For example, there is no redress scheme in place for people who feel that they have been given poor quality HIPs.
HIPs are due to become compulsory from 1 June 2007, and because Spring Move estimates that the market will be worth around £1.4 billion a year, it is concerned that some companies could see it as a ‘licence to print money’. This could lead to organisations entering the market with rushed and poor propositions, which could be partially caused by a shortage of home condition inspectors who are properly trained and have the right industry knowledge.
The proposed penalty of £200 in providing an inadequate HIP is an unlikely deterrent given the sums involved.
Spring Move, which is supportive of HIPs, is concerned that a few ‘rogue’ companies could damage the market, and that regulating it would deter them from entering it and provide greater protection for house buyers and sellers. In addition to this, it is also calling for the HIP industry to develop a charter of ‘best practice’ that all responsible providers should be willing to sign-up to.
Stephen Foden, chairman of Spring Move, said: “We are in favour of HIPs but we are concerned that some companies will enter this market offering poor quality Home Information Packs that in some cases will not be worth the paper they are printed on.
“If the industry wants consumers to rely on HIPs to help make their purchasing decisions, we must introduce safeguards against the production of wrong or misleading information. Failure to do this could prove very costly and people could be within their rights to sue estate agents, HIP providers and home condition inspectors for compensation.”
As part of a HIP industry best practice charter, Spring Move would like to see the following points included:
– Transparent charging structure: Costs should be clearly explained.
– Clarity of financial arrangements: There could be a tendency for HIP providers to pay commission to companies that introduce business to them or apply high finance charges to any credit arrangements provided. Any such arrangements should be made clear to customers.
– Reliability of content: The reliability of the information in the report should be clearly explained, e.g. clarification that those responsible for developing the report are adequately trained.
– An agreed format of presentation: This will help consumers better understand what is presented to them and help them distinguish between HIP’s that provide a minimum content to satisfy the legislation and those that provide added value, e.g. a lender’s valuation, additional searches applicable to the subject property, a legal interpretation and the contract that will be entered into if the offer is accepted
– Collection and interpretation of information: The collection of the relevant information should be thorough and the interpretation of this should be clear.
– Insurance: Those responsible for collating HIPs should have adequate insurance. At the moment there is no requirement for them to have Professional Indemnity Insurance.
Stephen Foden added: “We need a best practice charter for two reasons. Firstly, best practice guidelines provide a benchmark for the consumer, and as a responsible industry we must ensure that our customers reap the benefits of a competitive marketplace. Secondly, a best practice charter will remove doubt and instil trust in what has become a hazy, confusing product.”