Home Information Packs (HIPs)

The Government is introducing Home Information Packs in England and Wales to improve the process of buying and selling a home. Their aim is to directly address the following:

• Consumer dissatisfaction - nearly nine out of 10 consumers are dissatisfied with the present process;
• Lack of transparency - at present key information about the property only becomes available after terms of the sale have been agreed;
• High transaction failure rate - 28 per cent of property sales fail after terms have been agreed;
• High costs of failed transactions for consumers - over £350m lost a year;
• Slow transaction process - twice the European average;
• Uncertainty – 60 per cent of property sales are in chains. Delay or failure in one has a knock-on effect through the chain.

The following are a selection of the more commonly asked questions

What will be included in the pack?

Required documents must be included in the pack where appropriate but authorised documents will only be included at the seller’s discretion under current legislation.

The required (mandatory) documents are:

• An index (i.e. a list of the contents of the Pack)
• A sale statement (summarising terms of sale)
• Evidence of title
• Standard searches (i.e. local authority enquiries and a drainage and water search)
• An Energy Performance Certificate
• Where appropriate, commonhold information (including a copy of the commonhold community statement)
• Where appropriate, leasehold information (including a copy of the lease, information on service charges and insurance)
• Where appropriate, a New Homes Warranty
• Where appropriate, a report on a home that is not physically complete

The authorised (Optional) documents include:

• A Home Condition Report
• Guarantees and warranties
• Other searches.

Although a Home Condition Report (HCR) will not be mandatory at first, we believe the benefits of including this in the pack will prove valuable to both sellers and buyers. Inclusion in the pack will demonstrate the sellers confidence in the condition of their property, while buyers will have the added reassurance that there will be no surprises in the form of costly remedial works.

How will this effect buyers?

Buying a home can be like trying to find your way through a legal, financial and administrative maze. Currently, buyers have to make a formal offer before seeing important information about a property. The new Home Information Packs, compulsory for anyone marketing a home for sale, will allow this essential information to be made available up front.

How will this effect sellers?

This means that all home owners in England and Wales will need to arrange for a Home Information Pack to be prepared before putting their homes up for sale.

Where can I commission a HIP?

Edwards & Worrall will be able to provide sellers with Home Information Packs via our own Home and Energy Performance Inspectors. Packs will be prepared in a timely and efficient manner, but for your further peace of mind we will belong to an approved redress scheme.

Will all properties require a HIP?

The Pack will be required for every residential property that is offered for sale with vacant possession, subject to a number of exceptions that will be defined in detail in the secondary legislation. In general, these exceptions relate to commercial properties, for example trading farms, or mixed use properties such as shops with a flat above, or properties sold as part of a portfolio of residential investments. Brand new homes will require a HIP, but those constructed under a government approved warranty (i.e. NHBC) will not require a Home Condition Report.

How much will the packs cost?

Details of costings are still to be finalised but it is expected to be driven by market forces. Roberts, Edwards & Worrall aim to ensure that we are competitive in the market place and our pricing approach will reflect this aim.

Where can I find further information?

More information on HIPs can be found at www.homeinformationpacks.gov.uk