HIPs Are Here

Home Information Packs finally arrive this week. We run through the main points you need to be aware of if you're selling or buying a home.

Barring any last minute hiccups, August 1 will finally see the launch of Home Information Packs in England and Wales. Every home that is put on the market that is advertised as having four bedrooms or more will have to have one.

Home sellers with less than four bedrooms won't get to feel smug for very long though. The government is planning to extend HIPs to three bedroom properties next, followed by the rest of the market.

It's reckoned there needs to be 2,000 home inspectors and domestic energy assessors, adequately spread across the country, to extend Home Information Packs to three bedroom properties. To cover the whole market there would need to be 3,000.

As of last Friday, 2,224 people had been accredited with a further 710 having passed exams and waiting for accreditation. So the extension of HIPs to all home sales could be just a few months away.

What's in a pack?

The compulsory part of the packs can be broken down into two main sections.

First of all, there are various bits of legal documentation: evidence of title, searches and so on. Historically, this information was collected by the buyer's solicitor, so the government is hoping that getting the seller to compile it instead will speed up the whole process.

Secondly, there is the Energy Performance Certificate, which is a report examining how energy efficient your home is.

Energy ratings will go from A to G, A being the best and G the worst. You'll also be given a list of potential improvements you could make, what savings they would generate and an idea of what rating your home would get if they were all implemented.

An example of what a pack might look like can be found here (pdf document, 54 pages).

How will it work?

In order to ease in the new process, there is a period of grace up until 31 December. If you're selling a property with four bedrooms or more now, you only need to have commissioned a pack before it's marketed.

By the time you exchange contracts, you need to present your buyer with the Energy Performance Certificate. There is no time limit on when you need to present the rest of the pack, which seems rather odd.

After 31 December, the period of grace expires and the whole pack will need to be complete before you market a property.

It has to be said that the rules look quite complex once you get into the detail of how long a pack is valid for and so on. The Home Information Pack website is quite well put together though and should answer most of the more detailed questions you might have about the process.

What will it cost?

For homebuyers, packs should be free although you may have to pay a small fee for copying and postage costs.

The cost to sellers is likely to be around £300 to £500. Some agents are offering 'free' packs subject to certain conditions, so check the small print before taking up these offers. You'll also be able to compile your own pack although you'll still need to pay for searches and the Energy Performance Certificate.

Some people will be delighted to hear that a loophole has been discovered for certain online sales, such as via Homefinder UK, where the buyer pays a fee rather the seller. You also don't have to have a pack for a private sale, where the property is not marketed to the public at all.

The fine for not producing a pack when one is required has been set at £200 and will be handled by Trading Standards officers. It remains to be seen how strictly the fines will be enforced and, curiously, there's no mention of fines in the main section of the Home Information Pack website.

What if it goes wrong?

A complaints procedure has been put in place and we are being advised to only choose a pack provider that has signed up to the HIP Code. One company that's signed up is called Hip Hip Hooray. It's good to see not everyone has lost their sense of humour throughout the tortuous launch process!

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