Incomplete property searches – A disaster waiting to happen

When Home Information Packs (HIPs) were introduced last year, the Government put in place a temporary insurance arrangement in relation to property searches.

The arrangement allows private search firms to use insurance as a substitute where specific data is not readily accessible from the Local Authority. 

The Birmingham investigation, where Trading Standards Officers found inaccurate and incomplete searches in 5 out of 6 randomly selected HIPs, shows there is abuse of these unsatisfactory temporary arrangements and that corners are being cut. Birmingham City Council is one of many Local Authorities who make all their property search information available, thereby obviating the need for any insurance.

The consumer needs to be in possession of accurate, up to date information before making a decision on whether to proceed with a purchase of a property, especially in such a fragile market.

The Trading Standards Officers findings go some way to explain why so many duplicate searches are being ordered by the purchaser's solicitors, thus adding to the overall cost of the transaction. The use of incomplete searches may result in a cheaper HIP, but no-one seems to be counting the cost to the consumer.

Alex Fraser, Land Data’s Chief Executive commented "A Home Information Pack is supposed to take both cost and uncertainty out of a transaction, but, if the Birmingham Trading Standards Officers findings are representative of the national picture, then HIPs appear to be having the opposite effect."