Survey reveals 47% of solicitors’ instructions for Home Information Pack (HIP) come directly from sellers
Key findings of SearchFlow and Law Society survey shows solicitors are taking the initiative in HIP market
SearchFlow (www.searchflow.co.uk), the UK's largest property search information provider, has today unveiled the findings of its recent survey, undertaken in conjunction with the Law Society, looking at the current state-of-play of HIPs in the housing market. This is believed to be the largest survey to look at the HIP market, with over 2000 respondents from the legal sector, and the survey was specifically designed to identify the current position of solicitors within the HIP chain, as well as general market sentiment.
Amongst the key findings was the realisation that solicitors and conveyancers are clearly taking the opportunity to take ownership of HIPs. From compiling core elements of the Packs to providing legal oversight, it is clear from the survey that lawyers are routinely assembling all of the required documents for HIPs, with nearly 50 percent of instructions now coming directly from sellers, and another quarter of their instructions coming via referrals from estate agents.
Paul Marsh, Vice President of the Law Society, says: “These figures are encouraging. Solicitors have engaged with HIPs, which is good news for buyers and sellers alike. It is clear that many sellers, as well as estate agents, identify solicitors as being best placed to produce the Packs.”
However, even though nearly 80 percent of the legal professionals questioned said that their clients were either 'aware' or 'very aware' that HIPs are now a legal requirement, only 13 percent of those surveyed said that they had received a HIP for every property when acting on behalf of the buyer. Whilst there may be a "lag" of properties on estate agents' books from before HIPs were mandatory, this is still a surprisingly low figure. In addition, more than 65 percent of those surveyed said that they had processed less than 10 HIPs to date, a seemingly low figure given that half of the market rolled out over six months ago, and that HIPs for one and two bedroom properties should be presenting at the buyers' end now.
The survey shows, however, that many solicitors are forming strong partnerships with estate agents, rather than viewing them as competitors who are likely to take trade away from them. As such, the survey also indicated that most of the legal professionals questioned wanted to reinforce their local presence even further, whether on the High Street or in the wider local area, with half of all of the respondents naming this as part of their key strategic direction for 2008.
"Clearly, many solicitors are taking the opportunity with HIPs to strengthen alliances with local estate agents, and thereby growing local presence," says David Kempster, marketing manager, SearchFlow. "It is also apparent that, by taking greater control of the HIP process, solicitors are ensuring the necessary diligence and legal oversight is being applied either direct with the home seller or in conjunction with the estate agent."
Paul Marsh adds: “Getting a solicitor involved will ensure an accurate HIP. However, some estate agents are paid referral fees by other HIP providers and there is a danger that their HIPs will not comply with the legal requirements. Without a solicitor involved this could result in sub-standard HIPs being produced.”
The need for cost control also featured as a vital factor in the face of tough market conditions. As such, any methods that help to reduce administration and speed up workflow were welcomed by most respondents. Costs related to new technology and the need for compliance are no longer viewed as inhibitors, with less than 10 percent of respondents identifying these costs as having a significant effect on their business in 2008.
When acting on behalf of a buyer, most respondents held the view that any personal searches conducted for a HIP would need to be replaced with official searches, even if all of the required answers had been provided. In addition, the current insurance provisions for incomplete information were not welcomed by most respondents, and are clearly not going to be relied upon. It is also clear that a HIP that included official searches would be more widely accepted.
The absence of Environmental Searches in the HIP also continues to compel buyers' solicitors to order these searches separately. With well-documented stories of urban flooding and contaminated land having direct impacts on the value, insurability, and enjoyment of the property, solicitors are maintaining client care by adding these searches to the HIP, thus ensuring that the HIP is more 'conveyancing-ready'.
SearchFlow’s origins date back to 1983 when the company was founded as PSA, which was the first property search information agency founded in the UK and became a leading provider to legal professionals. In 2001, the SearchFlow brand, software and service was channeled into the provision of official electronic searches via the National Land Information Service (NLIS).
In April 2006, Macdonald Dettwiler & Associates (MDA) acquired the interests of SearchFlow and PSA and the merged company, MDA SearchFlow was created. It is run by the existing SearchFlow management team with over 50 years combined experience in the property industry. The web address is http://www.searchflow.co.uk
About the Law Society
The Law Society represents solicitors in England and Wales. From negotiating with and lobbying the profession's regulators, government and others, to offering training and advice, we're here to help, protect and promote solicitors across England and Wales.
More information about HIPs can be found at www.lawsociety.org.uk/hips
For more information journalists should contact the Law Society press office on 020 7316 5624
Chaz Brooks,CBC Ltd.
Tel: +44 (0)1483 537890
0870 460 0031
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