Home Information Packs - Update
Heptonstalls are committed to providing the Government’s controversial Home Information Packs (HIPs)which will become a mandatory part of selling a property from August 1, however the majority of homeowners in the UK are still confused about what the new legislation means for them.
Ostensibly HIPs are intended to speed up the home buying and selling experience for consumers and to reduce carbon emissions from homes, (some critics have predicted that HIPs will cause a major property market crash, and that the system is fundamentally flawed).
“In fact, Home Information Packs aren’t radically different to some of the components of the current conveyancing process," counters Louisa Fletcher, founder of www.propertypriceadvice.co.uk.
"It’s just that the seller will now have to put this information together before the property goes on the market, rather than the buyer’s solicitor sorting it out later on in the process – the only new requirement is the introduction of the Energy Performance Certificate (EPC).
"Remember, organising a Home Information Pack isn’t any more difficult or stressful than the normal legal process involved in selling a property," she adds.
"Just make sure that you choose your HIP provider with care and, if you are in doubt about any element of the process, either check with your own conveyancing solicitor or go to the government’s website on HIPs at www.homeinformationpacks.gov.uk."
What exactly is a home information pack?
Ruth Kelly MP has announced that HIPs will only be required for the sale of four-bedroom properties and larger, and will extend to smaller properties as soon as possible.
Under the re-vamped regulations homes can be marketed as soon as the HIP and its contents have been ordered, and the Land Registry and EPC details are available.
The marketing of your home can be instigated without a local search or a drainage search provided that these have been applied for, although the search results must be included in the HIP as soon as they are received, and have to be included within 28 days of the property going on the market.
A HIP will consist of:
- A HIP Index - Essentially a contents list of what’s in the HIP
- An Energy Performance Certificate or EPC
An EPC is generated by a domestic energy assessor, who will visit your property check its energy efficiency. They will then issue a certificate – which, can last 12 months – showing the energy rating for the property, along with an Environmental Impact Rating, which indicates the property’s carbon dioxide emissions.The EPC will also give guidance on how the energy efficiency of your property can be improved.
- A Sale Statement - This gives the basic details of the property.
- Evidence of Title - Usually the Land Registry registers and title plan.
- Local and Drainage Searches - Or a record of the fact that they have been ordered.
Deal or No Deal?
Obviously prices will vary, but HIPs could cost between £400 and £600 for a basic pack on a four-bedroom freehold property valued at around £400,000.
There should be lots of good deals around including ’buy now, pay later’, ’interest free credit’ and ’no sale, no fee’ schemes, so it definitely pays to look at what’s on the market.
While the estate agent you choose to market your home may offer their services for your HIP, you can get your own HIP done from any HIP provider including your solicitor, and, providing all the information required is there, your estate agent will have to use it.
Louisa Fletcher comments,
"I’ve already heard of some agents who are suggesting that they will only foot the bill for the pack if they sell the property – so in other words, if you put your home on the market both with an estate agent and on a ‘for sale by owner’ website, for example, and were successful in selling your property yourself, then you’d probably find that the agent would expect to be paid for their HIP."
Legislative Loopholes
There are some specific loopholes in the law where a HIP isn’t necessary in order to sell your property. It is thought that these may be closed shortly.
The following exemptions apply:
- If you sell a property privately without advertising it, this is classed as a ‘private sale’ and no HIP is required.
- Where you have a property you are renting out and sell it to someone with the tenant still in place. Whether you have advertised it with an estate agent or on a website, you will not have to provide a HIP.