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Currently 3056 HIPs and EPC providers registered
Currently 2 properties requiring a HIP or EPC
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 Laymans' guide to Home Information Packs.
Q. What is a Home Information Pack (HIP)? A. A collection of documents, which will be required before you can sell a dwelling on the open market, the contents will include, copy Deeds, Searches, an Energy Performance Certificate (EPC) and possibly a Home Condition Report (HCR), which is the new type of survey and voluntary at this stage. Q. What exactly should be included in the HIP? A. The Home Information Pack Regulations 2006 set out provisions on the “required” and “authorised” content of the Pack. Required documents must be included in the pack where appropriate and authorised documents may be included at the seller’s discretion.
Where appropriate, a report on a home that is not physically complete
Q. I thought HIPs were scrapped in 2007? A. No, some changes were made, the main one being the fact that the Home Condition Report (or mini survey) became a voluntary document rather than a compulsory one. Q. When did HIPs become compulsory? A. The Government has decided the start date will be the 1st August 2007 - but only for properties with 4 bedrooms or more! 3 bedroomed properties are included from 10th September. Smaller properties were be included from 14th December 2007. However, if your property was on the market before the 1st August (for 4 + beds) and 10th September (in the case of 3 beds) and 14th December (in the case of smaller property) you will not need to provide a HIP. This period, the so called 'drop dead' date has once again been extended to 6th April 2009 (Was to have been 1st June 2008) after which time, all properties will require a HiP regardless of when they were first marketed. In other words there was a 10 month transitional period. Some estate agents and conveyancers offered home information packs on a voluntary basis. The Government wanted to encourage this and would like forward looking property professionals to follow this lead. This will help pave the way for a smooth introduction of compulsory home information packs throughout England and Wales. Q. How much will a HIP cost? A. A one bedroomed flat will obviously cost less than a large manor house, also HIPs for freehold properties are likely to cost less than HIPs for leasehold properties. At present, HiPs start at around £200 and can rise to be in excess of £800. The introduction of the PIQ is likely to drive the cost up from an average of £300 to £400.00 Q. Who will pay for the HIP? A. The seller of the property will be expected to pay for the HIP. Although depending on the set up of the pack, a number of payment options will be available including up-front or deferred payment, this will be at the discretion of the pack providers. Q. Is it fair that the seller should pay for the HIP? Surely it will make the home buying and selling process more expensive? A. The majority of sellers are also buyers, in which case they will not have to pay for searches and an HCR on the property they buy, costs being shifted from the buyer to the seller. Government suggest it may cost +/- £100 to move home. The Home Information Pack was designed to reduce substantially the number of failed transactions and hence wasted effort. Only time will tell if this will happen. Top Q. How long will it take to compile a HIP? A. Most HiPs can be compiled within 5 working days. Leasehold may take longer. Q. Why were HIPs introduced? A. A number of reasons: Within the next few years, all residential properties should have had an energy efficiency assessment carried out on them in order to comply with an EU directive. The result of that assessment should mean that those properties will become more energy efficient, cheaper to run and release less harmful emissions into the atmosphere etc. The Government also wants to improve the condition of our housing stock. In addition, the Government wants to make the home buying and selling process more transparent, quicker and less stressful. Q. Is first day marketing allowed A. Yes. In the U-turn anounced on 22nd May, the Government stated that a property can be marketed if a HiP has been ORDERED. This has been extended first until 1st June 2008 and now to 31st December 2008 by the new Minister Caroline Flint. However, Ms Flint's successor Margret Becket has announced that from 6th April 2009 so called 'first day marketing' will end and the majority of a pack will have to be in place before a property can be marketed. We think that this applied to private sellers and to those using the equiverlant of 'Tempt me' services of some web sites. Top Q. How long will the complete Pack be valid for? A. The Home Information Pack is valid whilst the home is continuously marketed for sale, and the Regulations allow for a period where the property might be taken off the market whilst, for example, it is under offer or to allow a seller to change agents. Originally, if a property was taken off the market for 28 days, a new HIP was required. Now, a new HIP is required only if the property is taken off the market for over a year after the original marketing date. The main time-sensitive items in the Home Information Pack are the local searches. These are acknowledged by some to be valid for six months, although advice should be sort from your conveyancing Lawyer. The majority of sales complete within six months under the current process and The Government expect the Home Information Pack to shorten the time between offer acceptance and exchange of contracts. Q. Are HIPs needed at auctions? A. Yes. People buying at auction need reliable information just as much as anyone else. Q. Is there an impact for Right to Buy (RTB) properties? Who would have responsibility for it? A. RTB properties are excluded from Home Information Pack legislation as the property is not being openly marketed. However, the Department for Communities and Local Government is examining the scope for adopting Home Information Pack principles for such sales and thereby providing reassurance to people exercising their Right to Buy. Top Q. Are there shared ownership implications? A. A shared ownership property marketed for sale would require a Home Information Pack. Q. Who is liable for the information within the pack? A. The competent provider is liable for any misinformation within the pack. For example, search provider for searches, Home Inspectors for Home Condition Reports, seller for property information form, etc. Q. There’s no legal opinion within the HIP? A. There is no requirement or authorisation to include in the pack a legal assessment of the pack contents, so this isn’t something that could be included in the Pack, but there’s nothing to prevent such assessments being provided alongside it. Top Q. Once a HIP is produced, who has the responsibility for ‘policing’ the expiry dates, and re-producing the expired components? Also, at what point after sale agreed would any of the components have to be re-produced, e.g. if expired 1 week before sale completes? A. None of the Home Information Pack components will have an expiry date. The main required item in the Home Information Pack that is time-sensitive is the local search. Q. What's wrong with the old home buying and selling system? A. Government research shows that it is slow by international standards; is wasteful and inefficient, resulting in high rates of failed transactions; is particularly prone to delays and other problems during the period between offer acceptance and exchange of contracts; does not operate in the best interests of buyers and sellers; causes considerable frustration and stress. Q. How have these changes helped? A. They are part of a package of complementary measures requiring action by everyone involved in the process. The package is intended to: ensure that buyers and sellers are better prepared and have as much information as possible right from the start; secure faster mortgage offers and search replies; reduce delays and uncertainties; help address a number of problems caused by delays, including gazumping and problems in chains. Top Q. How will the HIP help first time buyers? A. One of the biggest beneficiaries will be the first time buyer. They do not need to commission a pack. They will be able to make an accurate estimation of the real cost of the dwelling. Q. Technology will transform the home buying and selling process without the need for HIP legislation. A. Information technology and e-conveyancing are the key to ensuring that information can be obtained and exchanged quickly and economically, but these developments support the introduction of home information packs; they are not a substitute. The home information packs are still required to ensure that information is available up front at the very start of the transaction. Q. Will failure to provide a HIP be a criminal offence? A. No, the enforcement regime will be based on civil sanctions... Top Q. What are the civil sanctions? A. The regime will give local weights and measures authorities primary responsibility for enforcing the home information pack obligations. Trading Standards Officers would be given discretion to determine appropriate action in each case - whether to provide information and assistance, issue a warning or a civil fixed penalty notice. The penalty would be set at a rate determined by the Secretary of State (initially envisaged to be around £200). Trading Standards Officers would also be able to notify the Office of Fair Trading of any breach by persons acting as an estate agent, which could also trigger action by the OFT under Estate Agents Act 1979. Trading Standards Officers would have a duty to do so, where a fixed penalty notice had been issued. The Government are consulting the Law Society about ways of applying equivalent enforcement arrangements to conveyancers marketing properties for sale. In addition, a person who breached the home information pack obligations would be liable to be sued by prospective buyers for recovery of the costs of obtaining documents which should have been provided in the pack. Q. Are you changing caveat emptor to caveat vendor? A. No. Buyers and their professional advisers will still need to satisfy themselves that in all respects the property and the terms of the transaction are satisfactory. The home information pack will assist buyers and their advisers to do this - by making documents and information available for scrutiny up front, at the very start of the process. Q. By how much would the new system speed up transactions? A. Government research shows that a typical transaction takes 8 weeks from offer acceptance to exchange of contracts. This is far too long and causes problems. The new rules could shorten this period significantly by ensuring that buyers and sellers have the information they need right at the start of the process. They could then exchange contracts earlier than under the present system. The amount of time saved would depend on factors such as whether the transaction is part of a chain but there is no reason why the average time cannot be halved. More importantly, the reduction of transaction threatening risks will mean that both parties can have greater certainty that the transaction will proceed to completion. Top Q. Have HIP's pushed up house prices? A. Quite the reverese according to some in the property business. In fact, in the current market it is very hard to pin the blame on HiPs when lenders have been the major villain! Q. There have been fewer properties for sale, has market collapsed? A. Although some argue that Hips have contributed to it, banks and lenders have been responsible for the majority of the mess we are in. Q. What are the benefits of the HIP? A. The home information pack will bring together at the very start of the process important information which at present is collected piecemeal in the days and weeks after an offer has been accepted. This will: help the seller decide on a realistic asking price; give the buyer the essential information needed to make a well-informed offer and proceed with the purchase; greatly reduce the risk of the terms having to be renegotiated due to later disclosure of information, e.g. about any defects; shorten the period of uncertainty between offer acceptance and exchange of contracts, thereby reducing the window in which gazumping and other problems can occur. Top Q. What types of sales will be affected? A. The requirement to provide a home information pack will apply to open market sales of homes with vacant possession. It is not intended to catch private sales, (e.g. to a member of the family, a neighbour or a friend) where the property is not offered on the open market, or sales of tenanted property where the home is not offered with vacant possession. Q. Will there be any exemptions from the requirement to provide a HIP? A. The home information pack obligation will not apply to non-residential property, mixed commercial (or industrial) and residential property, properties sold with sitting tenants and therefore unavailable for owner occupation or portfolios of properties. Initially, the pack will only be required for properties with four or more bedrooms. Q. What are the HIP requirements for new conversions i.e. barns or a house that was converted into flats? A. If individual properties are being marketed then they do require a Home Information Pack - the converted barn therefore does, and so do individual flats. Exceptions to the duties are set out in the Regulations. Top Q. Why include a local search in the HIP? A. The government has decided that these are important to home buyers and mortgage lenders. If problems are revealed, this can lead to further investigations and delays, possible re-negotiations or even transactions collapsing altogether. The purpose of the home information pack is to introduce transparency into the system by exposing potential problems and transaction threatening information right at the beginning of the process. The local search is an important component. It is a check against other components of the pack - the home condition report and the property information form. The search therefore needs to be available up front. A seller will need an approachable Lawyer to advise on the implications of the legal element of the pack. Q. But searches go out of date, will sellers have to renew them? A. Search results are generally accepted for up to six months. However, sellers will not be required to renew a search after this period. As on-line search information becomes available nationally, buyers will be able, if they wish, to update the information quickly and economically. Q. What are the advantages of including a Home Condition Report (HCR) in the HIP? A. The home information pack will ensure that the necessary preparation is undertaken to enable the transaction to proceed smoothly. The aim is to ensure that any information that might delay or prevent a sale is available up front at the very start of the transaction. Late availability of condition information frequently causes problems. Government research suggests that 43% of failed transactions do so as a result of problems revealed by a valuation inspection or condition survey after terms have been agreed. The cost to consumers can be around £1,000 per transaction. Moreover, even where transactions do not fail they are often delayed whilst renegotiations take place. In a chain situation the effects go well beyond those directly involved. That is why you may want to ensure that condition problems are identified up front. There are advantages for both sellers and buyers. These include: helping sellers make decisions about how much to ask for their home, and give them the option of having any necessary work done or else getting quotes before they market the property. helping buyers make an offer, which reflects the true condition of the property, and avoid unexpected bills when they move in. For both seller and buyer there is much less risk that the transaction will be delayed or fail due to problems with the condition being revealed later. Top Q. What will the HCR cover? A. The home condition report will be an objective report on the condition of the property that can be relied upon by buyer, seller and lender. The report will be in a standard format prepared in accordance with national occupational standards. It will cover matters of importance to a buyer - the general condition of the property taking account of its age, character and location; how energy efficient it is; and any defects or other matters requiring attention. A copy is included within this folder. A. Government have started from scratch and, with the help of the Royal Institution of Chartered Surveyors and other key stakeholders have produced a new format designed to give prospective buyers the information they need. The HCR will be a mid range survey, similar in depth to the current level 2 survey, the Homebuyers Survey and Valuation, although without the valuation element. The HCR was subjected to technical and consumer testing in 2003. Q. Will the HCR include a valuation? A. No. Valuations are subjective and can vary over a short period of time. Government believes that including a valuation in the condition report would interfere with the usual bargaining process between buyers and sellers. Also, not all home inspectors are valuers. Estate agents are often in the best position to advise sellers on value, given their knowledge and experience of the local market. Top Q. But only a minority of buyers currently have a survey? A. The Government believe it is a false economy to buy a home without a professional report on its condition. It is important not to rely solely on a mortgage lender’s valuation inspection because it is not a report on condition. According to research by a major firm of estate agents, 18% of buyers who relied on their lenders valuation faced unexpected repair bills in the first four months of moving in to their new home. In 48% of these cases the bill amounted to £500 or more, and in 17% of cases the bill exceeded £1,000. Q. But surveys are expensive, what will the HCR cost? A. The cost of the HCR will not be fixed by any central body. It will be determined by market forces - the price charged will reflect a number of factors, including the time the inspector needs to undertake the task (which in turn will depend on the size and complexity of the property), and on local market conditions. This is offset by potential savings on abortive costs, unexpected repair bills and fewer mortgage valuation surveys. Q. Isn't it unfair to put all this extra responsibility on the seller? A. There are benefits to the seller, as well as the buyer, in assembling as much information as possible up front: it helps the seller decide on a realistic asking price; it greatly reduces the risk that a buyer will want to renegotiate the terms in the light of information which at present is not disclosed until a later stage, e.g. any defects revealed by a survey or search; it offers earlier certainty by shortening the period between offer acceptance and exchange of contracts. Since the majority of sellers are also buyers, any additional costs will often be balanced by savings on the purchase. Top Q. But buyers won’t trust a report commissioned by the seller? A. Only inspectors qualifying under a certification scheme approved by the Secretary of State will be able to prepare home condition reports. The scheme will be responsible for monitoring and auditing inspectors work to ensure that standards are maintained. The home condition report will be an objective report on the condition of the property that can be relied upon by buyer, seller and lender. The report will be in a standard format prepared in accordance with the QCA approved national occupational standards so there will be no doubt what is required, and how it is to be carried out. To ensure that consumers are protected, inspectors will need to have suitable insurance which will be backed up by insurance of last resort provided by the certification scheme. If inspectors fail to maintain the correct standard or act in a way that is partial to one party contrary to the rules of the scheme, their certification will be removed, and along with that their ability to produce HCR’s. Therefore, any inspector not complying with the scheme’s requirements would be jeopardising his/her livelihood, would risk being sued by buyer, seller or lender and risk losing his insurance. Given these safeguards The Government believes that buyers will have every reason to have confidence in the report. Research published in 2003 by the Yorkshire Bank revealed that fewer than two in ten house buyers said they would not trust a survey provided by the seller. Q. Mortgage lenders won't trust the HCR. A. There is no justification for this view. Lenders will have rights to rely on the home condition report. They are involved in its design and will be represented on the certification scheme. The HCR will be one of several tools available to lenders and will provide helpful factual material to support other valuation methods such as desk top or automated valuation models. Lenders will still have a right to ask for a separate valuation inspection but these should become much less common. Q. Won’t HCR’s become out of date and have to be repeated at extra cost? A. There will be no requirement for sellers to renew the home condition report. As with any survey, the HCR will provide a ''snapshot'' of the condition of the property at the time it was inspected. As the home condition report will not contain a valuation it should normally be reliable for some time. An added advantage is that the availability of a home condition report should avoid the waste involved in multiple surveys by different buyers that occurs under the present system. Top Q. Will there be enough Home Inspectors available to do the job? A. It is estimated that about 2,000 home inspectors will be needed to undertake just the Energy Performance Certificates across the UK to start with and 3,000 will be needed to undertake the EPC's for all property, with an additional 4000 required should Home Condition Reports become compulsory. Q. A certification scheme for HCR’s and Energy Performance Certificates (EPC’s) is excessive government regulation. A. Not at all. It is mainly self-regulation by the industry and other key stakeholders, all of who endorse the need for a certification regime to protect consumer interests. The government’s role will be to identify and evaluate the requirements of certification arrangements, and to vet any scheme presented for approval. Q. Government proposals will not prevent gazumping, why not just ban it? A. Government research found that gazumping occurred in less than two per cent of transactions. In their view, a ban is impractical because it would risk stopping legitimate activity. For example, a seller might want to accept another offer because the buyer is deliberately dragging his feet. Also in some circumstances sellers, such as trustees and executors, are under a legal duty to obtain the best price they can for a property. The answer lies in increasing transparency and speeding up the process, thus reducing the window within which problems like gazumping can occur. That is what our proposals will achieve. Of course, the proposals also mean that even if a buyer is gazumped, then they shouldn’t have incurred the heavy wasted costs, which are incurred under the current process, from paying for surveys and searches on the property they hoped to buy. Top Q. The HIP will not deal with problems caused by chains? A. Chains are an inevitable consequence of people wanting to co-ordinate their buying and selling. The answer lies in speeding up the process for each link in the chain. Two thirds of the respondents to Land Registry consultation on complementary proposals for e-conveyancing supported the idea of a "chain matrix" of linked transactions which would track the progress of all transactions in a chain, and add further transparency. Q. Will sellers be able to use multiple estate agents? A. Yes, although permission will be required to use the pack from the pack provider. Q. Will small independent estate agents be able to survive? A. Yes but they should have developed their marketing strategy well in advance of 1st August 2007 Top Q. Will national firms take all the residential conveyancing market? A. Why should they if local conveyancing firms are able to provide the service!! Q. Is this all really going to stay? A. Government had numerous opportunities to repeal the current legislation. Within its statement of January 2007, it confirmed that HIPs will definitely be required and despite the 22nd May postponement HIPs for bigger properties was launched on 1st of August 2007. 3 bed properties were included on 10th September 2007 and the rest of the market from 14th December 2007. Rental properties are expected to be included in August 2008.
The Tories have said that they will scrap HiPs and there is precious little support from the industry. If you were a betting man then the future of HiPs looks shakey. Q. Why did the Government make the HCR element of the pack Discretionary? A. The Government is convinced that when the public learn about the benefits of the Home Condition Report they will all ask for one to be included. If this is not the case, they reserve the right to make them compulsory in the future. Top Updated 23/03/09
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