Home seller's packs...

[Flyfisher]

It's a pity this whole thing couldn't be implemented like the vehicle MOT (not that I mean it should be done every year though!!!). If you buy a used car, an MOT certificate will give you a degree of reassurance about its condition, albeit not a guarantee. But it's not a legal requirement for the sale itself. If you buy a wreck of a used car that you intend to restore then you'd be quite happy to buy without an MOT certificate.

 

[biffvernon]

A faulty car is more likely to kill someone than a faulty house.

 

[Nemesis]

I've bought plenty of cars without an MOT.

Yes they have to have one when you wish to drive them on the road, although an MOT is not really a guarantee that a car is absolutely fit.

I just would not be remotely interested in any of the stuff in any seller's information pack, especially energy certs. I am sure fitting a gas condensing boiler to my house would be much more energy efficient than the current mish mash of solid fuel heating, stove, fires and warm clothing, but as we have no gas that's a non starter.

Ditto many other recommendations - I suspect it will be a one size fits all policy.

It's just lining the pockets of firms such as the one advertising above.

 

[Flyfisher]

A faulty car is more likely to kill someone than a faulty house.

True, which is presumably why it's illegal to use a car on the road without one (although it's curious that a car less than 3 years old is simply assumed to be road-worthy).

But it's not illegal to buy or sell a vehicle without an MOT cert, which seems entirely sensible to me. They could have done the same with these home info packs and credit people with a bit of common sense. Sigh.

 

[NT]

A faulty car is more likely to kill someone than a faulty house.

True, which is presumably why it's illegal to use a car on the road without one

yes, whereas it is legal to use a house on the road.

(although it's curious that a car less than 3 years old is simply assumed to be road-worthy).

its not assumed than any car is roadworthy, nor that MOT implies roadworthiness. MOT simply covers the main risks, and cars under 3 are low risks.

Cars with MOT can still suffer steering column failure, brake failure, throttle jams and so on, as well as failure of inspected and tested items.


NT

 

[NT]

The type of people buying period properties are not interested in energy reports,

But The Chancellor* is. All houses to be zero-rated by the end of the next decade....

Talk is cheap. Once he's been elected on a wave of naivety he'll 'discover' that these ideas arent so workable after all. Only a news service deliberately playing dumb would take what he's saying at face value.


NT

 

[Nemesis]

Tax flights - while allowing airport expansion - green, or just anothey way of making cash?

 

[biffvernon]

All houses to be zero-rated by the end of the next decade....

No. Just all new houses. And by then we will be in such an economic depression there will be very little new house building so that will be an easy to achieve target.

 

[Nemesis]

Vernon - we've already been there.

Do keep up. :Insert that rolling eye emoticon here:

 

[Flyfisher]

its not assumed than any car is roadworthy, nor that MOT implies roadworthiness. MOT simply covers the main risks, and cars under 3 are low risks.

Cars with MOT can still suffer steering column failure, brake failure, throttle jams and so on, as well as failure of inspected and tested items.

So an MOT certificate is about as useful as a home information report then :wink:

 

[Nemesis]

Basically yes.

The engine can fall out and it may still have that nearly one year old MOT cert...

 

[Johneds]

There still seems to be some confusion here. More or less every house buyer pays to have searches, conveyancing, legal stuff etc. I doubt anybody on this forum has ever bought a house and decided to skip any of this - or ever would. The HIP merely contains the same stuff except the searches and documents are assembled by the seller prior to marketing.

The benefit of this is that you don't get two, three, four buyers paying for the same searches only to have the sale fall through. The buyer can see those searches etc. up front before thay make an offer. If there is something they don't like they don't offer. Time saved for everyone. It will also contain any certificates (electrical, gas etc.) and any planning permissions, building regs, listed building consents and any other guarantees and useful documents. All assembled in one place so the buyer can see it before they make an offer.

I'm wondering which part of all this is such a terrible idea? If it's the cost there is nothing stopping you doing it yourself. You will still need solicitors searches etc. but you can organise all this yourself and put your own pack together. Not everybody wants to do this and those people can choose to pay somebody to do it if that's what they want.

So the only difference really is the energy certifcate. I am dubious as to its value myself but it's not worth getting worked up about.

 

[Nemesis]

For houses on the market for a while, many of those searches will be out of date, and in some cases I can see that there may be problems getting some of the stuff together and sorted. For certain groups such as the elderly I think much of this will be very offputting and may even be beyond their means and capabilities to pay out for if it all has to be paid upfront. I include things such as land registry registration for unregistered property, which at the moment is usually taken care of by the puchaser.

Getting together certs isn't too bad an idea, although farnkly some of 'em may be a awaste of time (damp proofers who are long gone...)

Mostly I suspect three or four buyers don't get searches and conveyancing done all at once, only the person who has had an offer accepted.


I also forsee problems caused by the energy cert and period buildings, but time will tell. I'm not sure I really need a cert to tell me about roof insulation and better boilers.

I can't though see the point of having to have one for a house with holes in the roof and water cascading down the walls, but there you go - one size fits all.

 

[Craig]

I think that this is one of the biggest issues with the HIPs - how long are they expect to last?

A local authority search is usually valid for a few weeks, so expect your seller to redo it anyway - their lawyers will advise this I suspect.

And what use is a survey from a year ago? Would you rely on it?

In fact, would you rely on a survey done by the seller? You can't speak to the surveyor about what happened and what he saw/was told/couldnt see. I bet most people end up re-doing them.

Also, why is it going to speed things up or stop gazumping? These problems result from the messy involvement of human beans.

I do agree that there is an issue where somebody puts a property on the market and isnt actually ready to sell (e.g. their bank has lost all the deeds) but that would have been easy to remedy by a requirement to have lodged title docs with your lawyer prior to marketing.

 

[NT]

There still seems to be some confusion here. More or less every house buyer pays to have searches, conveyancing, legal stuff etc. I doubt anybody on this forum has ever bought a house and decided to skip any of this - or ever would. The HIP merely contains the same stuff except the searches and documents are assembled by the seller prior to marketing.

John I think you may be living in an insular world. The fact is there are many buyers who buy not only without searching, but in some cases without even seeing the property. While I cant imagine doing that, for some this is part of their business model, and it works for them.

Then there are the houses in sink areas, which often change hands for cash. the seller just says 'have you got the money?' hands over the keys, signs a receipt and goes. Typically no-one is worried whether the workshop out back had planning, or whether the house has some subsidence.

Then there are those who forego the usual checks due to some other factor that makes them of little value, Nemesis gave an example there. Etc. These are all realities of the housing market.

The benefit of this is that you don't get two, three, four buyers paying for the same searches only to have the sale fall through. The buyer can see those searches etc. up front before thay make an offer. If there is something they don't like they don't offer. Time saved for everyone. It will also contain any certificates (electrical, gas etc.) and any planning permissions, building regs, listed building consents and any other guarantees and useful documents. All assembled in one place so the buyer can see it before they make an offer.

I'm wondering which part of all this is such a terrible idea?

You make it sound good on first read... but the fact is people are overwhelmingly voting against it by their actions. If its such a great idea, people would be doing it, and there would be a layer in the market of housing where all paperwork was done and ready, no mucking about, no extra costs for buyers, no delays. But how many truly think it a good idea? How many are doing it?

If it's the cost there is nothing stopping you doing it yourself. You will still need solicitors searches etc. but you can organise all this yourself and put your own pack together. Not everybody wants to do this and those people can choose to pay somebody to do it if that's what they want.

Sure, people have options under either system. Such an exercise is still a waste of time & money for many though.

Why would you want to see everyone forced to spend 4 figures on actions that most are choosing not to do? People are making their wishes as plain as day by their actions.

Do you genuinely believe its a worthwhile investment when selling a house for 2 grand? Or the £500 houses? People buying in this bracket usually dont use solicitors, let alone a search. They see the house, they see the area, and they know what they need to know. For low end houses a buyers pack will kill the buy & sell market, and deny people their opportunities.

And its not just low end buyers, I've seen houses change hands for 5 figures for which these searches weren't chosen, and with fair reason. And BARs can cost far more. Buyers of BARs know what theyre doing, and energy reports on houses with half a roof are no use to anyone.

Why would one want to see the many people for whom the pack is not relevant forced to spend on this? I'm lost as to how that could be a good thing.

We can usually find the answer by looking at what changes will occur. A lot of people will be taking money by performing unwanted services, and the government gets its rake off. Perhaps its just a coincidence, but thats what'll happen.

So the only difference really is the energy certifcate. I am dubious as to its value myself but it's not worth getting worked up about.

Does that justify the HIP becoming compulsory?

Is there a reason we should sit by all this in silence? I dont know of one.
Should we say nothing as more of our freedoms are taken away and our lives taxed on one pretense after another?

The truth shall set you free. And that sounds like an OK thing to me.


NT


PS I am going to keep one little thing a mystery though, the question of whether I'll be voting labour at the next election

 

[Johneds]

Bit of a confused ramble NT but I'll do my best to try and clear one or two points up.

First of all it is not possible to hand over cash in exchange for ownership of a property, just like that. Property can only legally be exchanged via written documentation and registration. If you have put together a portfolio over the years by paying cash and taking the keys I'm afraid you will discover that you are not the legal owner.

Secondly the dilapidated mill building with half a falling down roof is exempt from the HIP.

Thirdly, the HIP is put together by the seller so buyers who buy properties on the phone and over the internet etc. without ever seeing them are completely unaffected by the HIP or its cost.

A HIP is not required where a property is sold by private agreement. It is only required where the property is marketed.

A HIP is also not needed when two or more properties are exchanged at the same time. i.e. commercial portfolios etc.

 

[Stephen]

NT

Whether you vote labour or not, these will remain.

Whatever other parties say publicly they will not get rid of HIPs once implemented. They will either keep it or modify it, but not get rid of.

The reason, primarily, is that because of Kyoto and European Directives they will need to have Energy Assessments of EVERY property in the UK (the date keeps shifting, but around 2010 is a fair guess). EVERY means commercial as well. However, desire to reform the home buying/selling process has given the government an opportunity to deliver the Energy Assessments (Energy Performance Certificates - EPCs) on the back of something else.

It was the Conservatives who actually started this reform process and when Labour came in they simply developed and continued it (RICS and others were in talks about this with the Conservative Government before Labour!).

In terms of getting information together and providing that information up front to enable an informed negotiation process is not a bad thing. Yes, there are issues over keeping the info up to date if the sale takes some time, but in reality for the majority of properties the search documents, etc would not change for a long time.

The majority of sales (over 90% according to my sources - I asked the question on Tuesday at a meeting) have mortgages. The cash purchaser is rare and in fact many 'cash' purchasers do obtain a mortgage on the property for tax and other financial reasons. Therefore the cash scenario painted by NT is a relative rarity.

There are issues with what should be included, how long it remains valid, etc, etc. There are major issues with whether some form of report on the property should be included and if so what form or level and who should undertake it.

On this last point there has been much misinformation in the press and even within the professions about HCRs.

Any training of anyone looking at properties must deal with the majority first and foremost and this by its nature will exclude pre 1920 (ish) buildings as they make up only c. 20% of the housing stock. The training of Home Inspectors was in fact very thorough with regard to construction and building defects. It was certainly more in depth than the training most mortggage valuers have and in some cases as detailed as most Building Surveyors. The ability of the Home Inspector to do the job being asked of him/her was not something that I was concerned about (having looked at it in detail). The reason for this is that the HCR was very specific and limited in what it was meant to do. The main problem would come from the follow up and that is the area I and others are still working on at RICS.

However, there are provisions in place to help prevent the problems that have been envisaged by those posting here. In fact Peter Ambrose (author of other posts on this thread) and I and others were working hard to ensure that historic buildings would be dealt with properly and by those genuinely competent to deal with them. This is ongoing, but not the priority it was now that HCRs are not mandatory.

The present situation (we are told by Government) is that they intend to make HCRs mandatory in future, but when will depend on various factors.

In the light of this the RICS is taking the opportunity to review the whole range of survey products and what needs to be changed for the 21st century. THe present range (mortgage, Homebuyers Report and full Building Survey) has remained relatively unchanged for the past 25 years or so. Of those obtaining mortgages (over 90% of the market) around 80% of them rely on the mortgage valuation alone and many of these believe it is for them and that it is something they can rely on in terms of a condition report. 15% have a Homebuyers report and of these some believe they are getting a full building survey. That leaves 5% that have a full building survey.

For too many years the process has been heavily influenced by the lenders. They are resisting present changes because they foresee a drop in their income. For example of the £1,000 you may pay to a lender for a Homebuyer report with the mortgage valuation the surveyor may see less than half of that. Where does the rest go? Surveyors have to sign agreements not to disclose how much they actually get from the total paid by the customer!

Sorry for the rambling response, but the present system is out of date and costs the public far more than it ought to. The proposed HIP and HCR (if or when they come in) should help sort out some of this. The RICS is taking a more active lead in sorting out the inspection side. It may take time and we may see trials of things that don't work, but I am hopeful that in a few years we will have a much improved system. I am also confident that the problems that many purchasers of listed buildings post about here will be problems of the past. I say this because I know what is going on behind the scenes to try to ensure that this is so.

Apologies for the rambling nature of this response, but I hope it helps.

Stephen[/quote]

 

[Penners]

For too many years the process has been heavily influenced by the lenders. They are resisting present changes because they foresee a drop in their income. For example of the £1,000 you may pay to a lender for a Homebuyer report with the mortgage valuation the surveyor may see less than half of that. Where does the rest go? Surveyors have to sign agreements not to disclose how much they actually get from the total paid by the customer!

Stephen - how will building societies be persuaded to accept an HCR in place of their own valuation surveys? Because so long as they won't, the excessive cost of home buying will presumably persist. Will/can the government ultimayely legislate to force them to do so?

 

[Stephen]

Penners

The simple answer is no - the government cannot at present force them to use whatever form of 'condition' report ends up in the HIP. Although wh9o knows what the government may do in future!

The reality is that the big lenders had their noses put out of joint because government did not include them in the main consultations, etc for the HIP and particularly the HCR. They are really not getting involved at present. However, as time goes on they recognise the fact that the public will not like having to pay out for HIPs, etc for the mortgage companies to then ignore it and to pay the lenders again. From the beginning the HCR included a front section that formed a summary that lenders could use (it was a form of mortgage valuation report but within the HCR).

That said, the requirements of a seller/buyer are different to those of the lender. Work is therefore ongoing at present to create something that would suit all parties at a basic level. Indications are that some of the smaller lenders will work with this, but the bigger lenders are still resistant.

There is also the move towards AVMs (Automated Valuation Models), which may mean the lenders will be persuaded to use whatever form of report goes into the HIP and then apply an AVM to decide on lending.

The reality is that no-one knows what will happen. There is much going on behind the scenes to ensure that the future process of home buying and selling is improved. I believe that the market will withstand only a few small changes at a time. We will probably have to wait until the HIPs in their present basic form come in madatorily in July 2007 and see how it develops thereafter. The main problem is that any single major change will have an impact on the market and what everyone wants to avoid is a repeat of the Conservative's mess in the late 1980s/early 1990s when due to their changes in mortgage relief, etc, etc the market went sky-high and then crashed.

There is a lot more going on behind the scenes and conversations I have had (that unfotunately I cannot repeat here) indicate what I believe to be positive moves in a direction that we would all believe appropriate. As I have no links or reliance on the lenders for work I can be more outspoken than others who would lose work overnight if they spoke out, but what is interesting is that many feel the same and encourage the likes of me and others to continue and say what they cannot.

I started off very negative about the proposed HIPs/HCRs, etc but as I have found out more, attended meetings and spoken with those heavily involved I have come to appreciate that there is a need to improve the market and particularly what goes on around the buying and selling of houses. However, I am not so blind to the fact that there are problem areas and issues that need to be resolved. What I find very useful is the sort of feedback we see here on this Forum, as it does help me when I enter into some of the discussions and meetings I attend.

Stephen

 

[NT]

First of all it is not possible to hand over cash in exchange for ownership of a property, just like that. Property can only legally be exchanged via written documentation and registration.

Yes, I took registration as an obvious step. But there is no necessity to involve solicitors, searches, or anything of that sort.

I dont deal in houses like that.

Thirdly, the HIP is put together by the seller so buyers who buy properties on the phone and over the internet etc. without ever seeing them are completely unaffected by the HIP or its cost.

I dont think so, basic principles of capitalism here. If there are extra costs burnded onto the market, they are not normally all absorbed by one side only.

A HIP is not required where a property is sold by private agreement. It is only required where the property is marketed.

thats good news. Still many problems though.


NT