The Government’s controversial Home Information Packs have failed to improve the home-buying process and should no longer be compulsory, a review has found.
The independent Carsberg Review into the residential property market said the packs offered the “worst of all worlds”, omitting the most useful information consumers needed when buying a home, but still costing sellers around £350.
It said the cost of the packs, which are compulsory for people selling homes in England and Wales, appeared to exceed their benefits, and called for them to be made voluntary, so they could evolve into something that consumers would willingly purchase.
Former head of the Office of Fair Trading Sir Bryan Carsberg, who carried out the review, also called for greater regulation of estate agents and letting agents. He said all agents working in the residential property sector should have minimum qualifications, and belong to a redress scheme.
He also called for consumers to be given more information about the homebuying process, including being told about steps they could take to make it run more smoothly, while he outlined other reforms that could be introduced to speed up the process.
HIPs were introduced in August last year in a bid to speed up transactions by including more the information potential buyers needed up front.
They contain evidence of title, certain searches and an Energy Performance Certificate, but the original requirement for them to include a Home Condition Report was dropped some time before their introduction. But the review found that few buyers showed an interest in HIPs, while a substantial number of conveyancers, such as solicitors, still commissioned their own searches.
It added that even if the packs were made more comprehensive, there was a strong likelihood that delays between their preparation and the exchange of contracts would mean much of the information would have been out-of-date by the time it was used.
Sir Bryan said consumers were dissatisfied with the homebuying process, with a lack of knowledge of the system and frustration with the process driving this. He called for a new regulatory body to be established to oversee the sector, with powers to ban people from acting as estate agents transferred from the Office of Fair Trading to the new regulator.
He said it should be compulsory for those working in the sector to belong to a regulatory scheme which would promote the interests of consumers in terms of price, quality and the services offered. Other recommendations put forward in the review, which was sponsored by the Royal Institution of Chartered Surveyors (Rics), National Association of Estate Agents (NAEA) and Association of Residential Letting Agents (Arla), included the drawing up of a standard draft contract for buyers.
Gillian Charlesworth, RICS’s director of external affairs, said: “Sir Bryan’s review highlights a number of key areas where the current approach is clearly failing.
“The processes for regulation and redress do not go far enough to protect the consumer and we agree that participation in regulatory and redress schemes needs to be both consistent and universal. They should include all estate agents, letting agents, managing agents and landlords.’’