Consumers are warned that Estate Agents may use the Home Information Packs (HIPs) legislation to tie-in hundreds of thousands of property sellers thereby creating a situation comparable to the sole agency agreement critisized by many industry professionals.
Before I consider the question, I think it is important that we understand exactly why the Government wanted to bring in reforms to the property market and, in order to do this, we must travel back in time – nearly 10 years – when the property market was very buoyant and some unscrupulous sellers were increasing the prices of their properties just before exchange of contracts (gazumping). It was considered that doing something about this practice may make the government of the day popular, however, it was soon discovered that gazumping was only affecting 2% or less of the market. This clearly resulted in a re-think and it was suggested that, because a number of properties fall through just prior to exchange, there were considerable abortive fees incurred, payable to the lawyers and, therefore, that something had to be done
The government have, with others, attempted to bring an end to the current crisis by investing millions into the banks hoping that this will, in turn, revive the property market. This has been beset with uncertainty since 2006, when it was proposed changes needed to take place in the way that property was transacted.