Thinking of selling your home? You may find you need to put that "For Sale" sign away until your Home Information Pack is ready.
Well, there's been a glimmer of good news recently regarding the country's property situation. After months of horror headlines regarding house prices, figures released last week by the Royal Institution of Chartered Surveyors (RICS) revealed that at least the number of people looking to buy a home hit a two-year high last month.
Of course, there are two sides to the coin. The reason many of those people have decided the time is right to buy is due to the increased level of forced sales and repossessions that are, in turn, pushing down prices. So while you have thought buying a home was out of your league financially a year ago, things may be different now.
Drop-Dead Date
However, anyone planning to sell should be aware that ministers have tightened up legislation regarding the much-condemned Home Information Packs (Hips).
Sellers can currently market their property as soon as they have commissioned their HIP, and they have up to 28 days to do so while they wait to receive it.
However, as of 6 April 2009 (the so-called Drop Dead Date) buyers cannot put up those "For Sale" signs until all of the key documents for their HIP are in place (although they will still be given 28-days grace for a few items including property searches).
What's more, the packs are to be made bigger, with the inclusion of a Property Information Questionnaire (PIQ), requiring information on the risk of flooding, gas and electricity safety, service charges, parking arrangements and details of any structural damage. Anyone not complying with the rules could find themselves fined up to £200.
In the beginning......
The original idea behind the Home Information Pack was that it should contain everything a buyer needs to purchase a property. That included a property survey known as a Home Condition Report (HCR).
If everything was in the pack, buyers would quickly be able to decide whether or not a property was worth even viewing, let alone putting an offer on. And that would result in less wasted time.
While the pack obviously burdened the seller with extra costs, this would effectively be cancelled out by him not having to pay for these items when the time came for him to buy.
Problems
The problem is various about-turns by the government have resulted in the pack being massively scaled-down (indeed it doesn't even need to include what many regarded as the only useful part, the HCR).
It is argued that as potential buyers must still pay hundreds of pounds for a property survey, why saddle the seller with paying between £300 and £600 for a HIP? Does anyone actually care how many energy efficient light bulbs there are in their potential home? And with properties struggling to sell full stop, shouldn't we be considering suspending HIPs in a bid to help things get moving again?
It's a difficult one. While I can see how the original idea had good intentions, there are just too many potential problems. And while I do see the relevance of having extra information regarding flood risk and parking arrangements, is it really fair to make sellers fork out hundreds of pounds for this all to be placed in a shiny folder? Has the time come to bow out gracefully, or start thinking of an alternative?
On a more positive note, Margaret Beckett's new measures did state that she felt it was important that both home buyers and sellers get a good service from professionals working in the industry. She revealed that the government would be welcoming the Office of Fair Trading's study into how home buying and selling works, as well as looking at competition between service providers and how consumer interests are served. We at the Fool will be watching the outcome of this study, with much interest, too.
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