HIPs don't fly

Considering the British obsession with property, it's amazing that the process of buying and selling homes in England and Wales is so poorly organised. The estate agents are unregulated and largely untrained, and the "multiple listing" system that makes property dealing so much easier in North America is unknown. Worse, the legal process is so drawn out and convoluted that it opens up all kinds of opportunities for naughtiness. I recently sold a property. When the paperwork was almost complete, the buyer approached me through his agent, trying to cajole me into a lower price in exchange for a quick closing. (I refused and, wondrous to relate, the deal went ahead as originally agreed). In a rising market this so-called "gazundering" is less common than the infamous gazumping, in which a greedy seller tries to squeeze more money out of a desperate buyer by threatening to accept a competing offer.

The Blair Government, never shy of introducing inappropriate regulations, hoped to address this through the introduction of "Home Information Packs" (HIPs), which every vendor would be obliged to provide to prospective buyers. As originally envisaged, the HIP would have included details on the property title, an energy efficiency report and a report on the condition of the property. This last item was dropped after lenders made it clear that they would still insist on a separate survey before advancing funds against a property.

In recent months, in keeping with the rise in "green" awareness, the Government has placed most emphasis on the energy efficiency report as the key element of HIPs, rather than the title report and other legal details that might have helped to speed the selling process -- which was, remember, the original purpose. This week, however, the Government has been forced to back off again, delaying the introduction of HIPs by two months (to August), and phasing them in, starting with larger properties. The delay is partly related to the fact that in true New Labour fashion, nobody paid much attention to seeing whether the fine intentions could actually be implemented. Reports suggest there is only one person registered to perform the energy efficiency audit for the entire London area.

HIPs are a bureaucratic solution to a problem that could be solved much more easily. The Scottish system of property transactions has much to recommend it. A signed offer from the purchaser, once signed back by the vendor, is binding on both parties. This doesn't mean that deals can't collapse, for example if the property survey is unsatisfactory or the mortgage falls through. But it does limit the opportunity for gazumping and all the other shenanigans that make buying a house in England such a pain. Reports suggest that Gordon Brown will persevere with HIPs when Blair finally steps aside. He would do better to consider ways of bringing the Scottish system down south.