First Time Buyers Will Benefit From HIP

Responding to headline, Stephen Callaghan, FRICS Chief Executive Officer, home inspectors.co.uk says....

"The ODPM statement sets the record straight so far as the benefits to First Time Buyers are concerned. After all, when the scheme goes-live every home coming to the market will have a HIP, including a Home Condition Report (HCR) carried out by a Licensed Home Inspector. For struggling First-Time Buyers on the property ladder this will be a major benefit as they will be provided with a pack, free of charge. At the moment, largely due to confusion, most buyers (around 80% rely upon a mortgage valuation to buy a home. Many home buyers mistakenly believe that the mortgage valuation is a "survey" done for their benefit, rather than a means for the lender to decide whether or not to lend money. There is no question that the HIP will be a resounding triumph for the consumer."

The following is a full transcript of the article:

Housing Minister Yvette Cooper said:

"Home Information Packs, which have long been called for by consumer groups, will cut costs not increase them. At the moment there are huge costs for buyers especially when sales fall through. First time buyers will no longer have to pay for expensive searches and other costs before they can buy a home. Home Information Packs will make a real difference, cutting costs for first time buyers."

Home Information Packs facts and figures: first time buyers (FTBs)
Home Information Packs will significantly improve the lot of first time buyers:

* FTBs are the most vulnerable and least experienced participants in the home buying process. They need hard reliable information to inform their decisions. HIPs will provide this
* FTBs will receive pack information ‘free', thus reducing the cost of entry into home ownership
* A present FTBs waste £100s on searches and surveys only to find that transaction falls through (£140m wasted each year). This is expense FTBs are least able to afford. It means they have to save up the money all over again before they can embark on another attempt to buy a home HIPs will provide this information upfront
* The Home Condition Report in the HIP will provide FTBs with all the information they need about the condition of the home and its energy efficiency. This will save FTBs the cost of commissioning their own survey, and put an end to people buying their first home only to find out afterwards that there are expensive problems that they cannot afford to put right
* Currently, one million pounds a day is wasted on failed transactions and buyers often spend hundreds of pounds on valuations, legal advice and searches on transactions that ultimately break down. By providing key information at the beginning of the process, Home Information Packs will prevent waste and significantly cut the number of sales that fall through
* Buyers will have a right to rely on the contents of the Home Condition Report and effective redress arrangements will be in place to protect them if the Report is inaccurate
* Only between 20 and 30 per cent of buyers carry out a survey at all - that's 7 out of 10 people who do not
* For those first time buyers who do have a survey carried out, £140m a year is wasted on surveys for properties which then fall through (NOP research for Spring Move)
* Nearly 30 per cent of transactions collapse after terms have been agreed
* Over 40 per cent of failed transactions collapse because of an unfavourable survey or valuation inspection, so property condition is a major reason for failure
* Currently only 2 per cent of buyers have a full structural survey carried out when buying a home

A full copy of this ODPM article may be found by following the link:

http://www.odpm.gov.uk/index.asp?id=116412

Send her packing Mr Prescott - Guardian 11-03-06