Northern England Licensed Home Inspectors

Home Information Packs Briefing

 

What are HIPs?

From 1 June 2007, all home owners in England and Wales will need to prepare a Home Information Pack (HIP) before putting their home up for sale. The Home Information Pack is a set of documents providing important information about a property such as searches, copies of the deeds and a Home Condition Report – assessing the condition of the property and its energy efficiency.

 

Why are HIPs needed?

The UK housing market is characterised by delays, poor information and transaction failure. Official Government figures point out that nine out of ten people say they are dissatisfied with the current process. One in four transactions collapse before contracts are exchanged and one million pounds a day is wasted, mainly due to transactions failing at a late stage.

 

Information underpins the operation of all markets.  Home Information Packs will ensure that information is provided up front, at the time of marketing a property, and thus will make the home buying and selling process more efficient and transparent.

 

HIPs are already here

Home Information Packs already exist. Estate Agents are responding to consumer demand for greater information at the start of the house transaction process and compiling packs on a voluntary basis. In preparation of June 2007, the Association of Home Information Pack Providers (AHIPP) is organising an early roll out – separate from DCLG’s scheme – in a number of regional housing markets in the Autumn.

 

Companies preparing for the HIP market are making significant investment in the technology and training required to make HIPs a reality. The formation of the AHIPP demonstrates that there is an organised and responsible industry preparing to meet consumer demand and successfully deliver HIPs to home buyers and sellers across the country.

 

Effect on First Time Buyers

As the cost of packs will fall upon house sellers, first time buyers will be the key beneficiaries of a HIP as the entry costs of home ownership they currently face will reduce substantially. The cost of searches will be met by the seller, and valuation and conveyancing costs will reduce as HIPs allow for more automation in these processes. In addition first time buyers will know the exact condition of any property they buy and any costs to remedy defects. They will also know how much it costs to ‘run’ their new home as there is an energy efficiency report in the pack.

 

Improving Housing Stock

The HIP contains a Home Condition Report which details the quality of the property in question. Sellers will have an interest in maintaining and improving the quality of their property prior to placing it on the market.

 

Assurance and Redress

Consumers will benefit from an improved home buying and selling experience with the provision of objective, timely and accurate information, with insurance and redress. AHIPP is working with the OFT to establish codified industry standards and in establishing a compliance board to ensure that members are adhering to the agreed standards.

 

Benefiting the Environment

The Home Information Pack will usher in a new era of environmental reporting for buildings. The HIP will implement the new EU Directive on Energy Performance, stating that ‘member states must ensure that an energy performance certificate is made available to the prospective buyer when buildings are constructed, sold or let.’ The Home Condition Report will meet this obligation and ensure that environmental considerations are taken into account by the industry when building and upgrading housing and inform the decisions of those house buyers.