Home Information Pack (HIP's)
This artical © Money Sorter
The government has been planning for several years now to introduce a new system to improve the much criticised process of house buying in England and Wales.
What was the Problem?
The problem has been that a lot of time effort and money is all too often wasted when home sellers change their minds.
In order to progress a sale a potential buyer has to pay for a valuation and / or survey, get a mortgage in place and probably pay for legal work on the property sale.
Despite this commitment the seller is under no obligation to sell until right up to the latst minute when contracts are exchanged. (See the process of buying a home).
All too often things go wrong. Perhaps the buyer is gazumped or there are problems with the chain. (Read more about what can go wrong)
The idea was to put the onus onto the homeseller to get together the information on their property and show it to potential buyers in a "seller's pack".
In this way, for example, ten prospective buyers would not need to get 10 surveys done.
It would also show real commitment by the sellers and so avoid time wasting "let's see if anyone offers anything then let's change our minds anyway" attitudes.
This idea was mooted way back in 2000. To read a background view from that time and why legislation was thought necessary have a look at this article from the Guardian.
Home Seller's Packs Latest
Home Sellers Packs are coming to the fore again as the Government prepares to make Home Information Packs compulsory on June 1st 2007.
However following pressure from the opposition Conservative party and a petition signed by 130 MPs in early July 2006, part of the proposed content of the Home Information Pack, the Home Condition Report was scrapped.
The Home Condition Report was effectively replacing the need for a survey and would have been paid for by the seller rather than the buyer.
The official reason given was that mortgage lenders were not going to recognise Home Condition Reports as a substitute for a survey, which meant they were effectively useless.
Great news for the professional surveyors and Estate Agencies. Bad news for innocent home buyers
Worries that it might interfere with the property market was also seen as a concern from ministers with the housing minister, Yvette Cooper, stating that she didnt want a big bang effect on the housing market.
The Home Condition Report was the heart of the Home Information Pack and without it, it seems a waste of time and money from both the buyers and sellers point of view.
Is there any point in having a Home Information Pack now?
Well, the government has stated that it will still be compulsory from June 2007.
The Home Information Pack will now include:
A sale statement with the address of the property, who is selling it, and information on whether or not it is being sold with vacant possession.
Copies of title documents or deeds proving owners Home Information Pack.
Replies to standard searches such as planning permissions, road schemes, water and drainage.
Warranties and guarantees for any building work.
An Energy Performance Certificate (EPC), required under an EU directive, which gives A-G ratings on the home and practical measures to cut fuel bills and carbon emissions.
Property Use Forms (with details of neighbour or boundary disputes and work carried out) and Contents Forms (fixtures and fittings) are still grey areas. It may be that these can be left blank.
Not willing to let Home Condition Reports die completely the government has said that the Home Condition Report will be left to market forces and that estate agents and lenders will be encouraged to use them, but only voluntarily.
The Home Information Pack seems to be a great idea poorly executed by the government and the decision not to include the Home Condition Report is a real blow to the original vision.
However there will still be useful components in it which will be an improvement on the previous situation.
Click here for a very useful guide to buying a home in the UK including tips and tricks to completing the property deal how to get the best property sale lawyer solicitor and much more.