Home Information Packs (HIPs)

Home-owners in England and Wales selling properties are legally required to provide a Home Information Pack (HIP) to prospective buyers. But what does that really entail, and who is responsible for what?

Better buying, smarter selling
HIPs are intended to speed up and improve the home buying selling process by providing key information about the legal status and condition of the property.

Until now, buyers have been unable to obtain key information until after their offer has been accepted. Then, any adverse elements that come to light, for example rising damp or woodworm, can result in price renegotiation or even offer withdrawal.

It’s a frustrating and expensive fact that over 28% of sales fall through after terms have been agreed.

Not only is that bad news for sellers, who have to start all over again and risk losing their place in the buying and selling chain, it’s a nightmare for buyers too, as the money they have spent upfront on a survey or house valuation is wasted. Because of this, over £350m is lost every year. The introduction of HIPs is predicted to reduce the current fall-through rate to 8%.

9 out of 10 people want a change
The present process of house buying and selling in the UK takes twice as long as the European average. The length of time involved causes stress and uncertainty, especially as 60% of property sales are dependent on chains. It’s not surprising
that Government figures show that
9 out of 10 people are dissatisfied with the current process.

The introduction of HIPs should not only increase success rates, but customer confidence in the performance of their estate agents is also set to rise. Under the HIP system, estate agents marketing homes will be required to belong to an approved redress system. This should mean a better standard of service and peace of mind for consumers, who can take their complaints to an independent industry body.

What's in a HIP?
Present government guidelines designate some documents as 'required' (compulsory) and others as 'authorised' (non-compulsory).

Documents will now be in a more user-friendly format, designed for clearer and easier understanding of information.

Required documents include:

• An index (listing the contents of
  the pack)
• Sale statement (summarising terms
  of sale)
• Evidence of title
• Standard searches (i.e. local authority enquiries and drainage & water search)
• Energy Performance Certificate – measure of the overall efficiency of a home. The higher the rating, the more energy-efficient the home is and the lower the fuel bills will be.
• Where appropriate, common hold information (including copy of common hold community statement)
• Where appropriate, leasehold information (including copy of 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

Authorised Documents:

• Home Condition Report - This mid-range survey is similar in detail to the current Homebuyer’s Survey and Valuation Report, but without the valuation. It covers the general condition of the property, bearing in mind its age, character and location, and highlights any defects that need to be fixed.
• Guarantees and warranties
• Other searches

Who can compile a HIP?
Sellers can compile their own packs, or use the services of a Home Information Pack provider. As Brown & Company Solicitors already have in place modern technology with links to electronic search facilities, we have decided to prepare our own HIPs although we will also be able to offer HIPs prepared by other providers. By providing HIPs as part of our conveyancing package, we hope to maintain the personal service our clients value whilst, at the same time, avoiding the addition of another middle man to the process. In our eyes this will not only save our clients money but will also be more time efficient.

With our expertise and IT skills, we will be able to provide HIPs quickly in both paper and electronic format which will allow our clients to market their properties at the earliest opportunity. As with all other stages of the conveyancing process, our aim in providing HIPs would be to deliver a speedy efficient and quality service.

Whilst HIPs continue to have a rocky ride, they are, for the time being at least, here to stay. The average time to produce a HIP for a local property is 4-5 days. We make no charge for compiling the HIP; your only cost is the actual price of each component part. So, if you are about to put your house on the market, give us a call and talk to us about your HIP and conveyancing requirements.