If you are one of the many people using HIPs, you could end up paying hundreds of pounds twice for the same work!
The Government's controversial new scheme to speed up the house buying process has hit yet another obstacle after it emerged some mortgage lenders do not trust the packs, and so are replicating (and charging for) the key elements of them!
HIPs, which contain title deeds, an energy performance certificate (EPC) and a string of local searches, have been required for all 4 bed homes put on the market since August 1, and from September 10 they will also be required for any 3 bed homes.
The idea behind HIPS was that rather than paying for this information when you looked into a buying a home, the person putting the property up for sale would have to provide the information up front.
This would (in theory!) mean fewer sales breaking down and that no matter how many properties you looked into you would not pay the fees more than once! (when selling your own home).
So what is happening now?
Barclays and HSBC, two of the biggest mortgage lenders, appear not to trust the reports, although both have denied that they are unhappy with the whole HIPs process.
Local searches contain information on planning applications, drainage and building permissions. Before HIPs were introduced buyers carried out around two searches in five without a solicitor, a process known as a personal search.
However, because this type of search is cheaper, it is anticipated that most of the companies providing HIPs will take this option to keep costs down.
HSBC has said it would make homebuyers pay for its own local authority searches (costing up to £200) as those provided as part of HIPs are not all underwritten by a solicitor and so would not provide enough insurance.
This means that as a buyer you would have to pay for the local authority searches both for your own home and for the one you are trying to buy!!
A spokesman for HSBC said there was nothing new about his bank's policy and stressed that the bank was supportive of the introduction of HIPs.
"But we have never accepted private searches rather than those from a solicitor," he said. "We just need to be sure that the customer's solicitor will sign off the search so that it is covered by their personal indemnity insurance" he added.
A spokeswoman for Barclays agreed. "We will accept a personal search, at the conveyancer's risk. We are not demanding that house buyers spend more money on more searches," she said.
Hmm, we're not entirely convinced that this is true...and we're not quite sure what is going on with searches but before you get all HIP, you had better make sure you are not paying twice for the whole process!
Its HIPs time again!