Home Information Pack changes
Tuesday, 31 March 2009 3:59 PM
Changes to the Home Information Pack (Hips) will come into force on Monday, bringing in new legislation which home buyers and sellers need to be aware of.
The controversy surrounding the scheme has been apparent since they first became compulsory 15 months ago, with their cost to the government standing at £1.3 million.
From Monday they must be provided before the point of advertised sale, and will now include additional information such as a questionnaire. Ahead of the changes, aboutproperty has compiled some FAQ's, as well as some comment from some of the property industry's leaders in their field.
What are Hips?
Home Information Packs (Hips) were aimed to provide greater transparency for the home buyer. They were introduced by the government, coming into force for all homes on sale from December 14th 2007, after a series of delays and removal of several aspects including the home condition report.
They comprise a collection of documents to help the buyer learn more about a property, and are free of charge to them. They were originally put together to prevent buyers finding out any hidden issues about the property once a sale had been agreed, and to prevent sales from falling through.
They include compulsory and optional information, although all documents must be official.
What changes are coming in?
Perhaps the biggest change is from April 6th 2009, all Hips must be available from the first day the property goes on sale. A Home Information Pack may include:
- Index
- Property Information Questionnaire (including flood risk information, gas and electricity safety, service charges, structural damage and parking arrangements)
- Energy Performance Certificate/PEA
- Sustainability information (new homes only)
- Sale statement
- Evidence of title
- Standard searches
- Lease (where appropriate)
The changes being made to the original Hip, are the removal of the temporary first day marketing concession, introduction of the Property Information Questionnaire (PIQ), and the inclusion of all searches.
Who needs one?
Anyone selling a home, including auctioneers and developers. Hips can be compiled by the seller, estate agent or a business providing them, and are the responsibility of the seller, not the buyer.
Are they compulsory?
From Monday Hips will be compulsory for anyone selling a home before they advertise the property as for sale. This does not just apply to homeowners, but to anyone selling a property such as property developers.
What do the experts say?
Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA) said:
"Home Information Packs are simply not working.
"Firstly the cost is punishing sellers in the pocket at a time when they really need all the help that they can.
"More galling, they are spending this money in the knowledge that 77 per cent of buyers admit that they paid no attention to the pack whatsoever.
"Margaret Beckett herself admitted that Hips are not working - but now she seems to have buried her head in the sand along with the rest of her department. Hips are confusing to customers and act as a dampener on a housing market which is essential to Britain's economic recovery.
"With all indicators pointing to a troubled year ahead the NAEA calls on Mrs Beckett to suspend Hips while the housing market is suffering and re-examine their viability once the market has begun to pick up."
Mike Ockenden, director general of the Association of Home Information Pack Providers (AHIPP), said:
"Our members are turning Hips round in an average of five days. As a result, this new legislation is unlikely to delay consumers looking to sell their home.
"However, with vendors playing an increasingly important role in the Hip compilation process it is essential that they are provided with the necessary information and are made aware that their PIQ must be completed before their home can be marketed.
"Our members are more than prepared for the changes ahead. Many have already been trialling the PIQs with their agents and are ready to embrace the new legislation.
"However, for agents, it is now more important than ever that they choose a pack provider that subscribes to the HIP Code. The code sets out minimum standards and ensures stringent regulation and redress for all those who obtain their Hips through a registered provider.
"Hips provide buyers with a great deal of important information that should be taken into consideration before making an offer, from the home's energy efficiency to local search information.
"Following the launch of the Property Information Questionnaire (PIQ), the level of upfront information available in the Hip will increase and we expect to see more buyers asking to see a home's Hip. The reality is that most of those selling a home will be buying a home too and if they have competed a PIQ for their own property, they are more likely to ask to see the PIQ for any properties they plan to purchase.
"Your estate agent will be able to recommend a Hip provider when you come to market your home. However, vendors are free to select their own pack provider if they prefer but the most important thing to remember is to only choose a provider that adheres to the Hip Code - the full list of subscribers can be viewed on the Property Codes Compliance Board (PCCB)."
Gillian Charlesworth, Royal Institution of Chartered Surveyors (Rics) director of external affairs, said:
"Rics maintains that trying to engineer the home buying and selling process through the Hip is of limited use.
"Rics wants to see the government joining up to achieve much more for home buyers and sellers in the form of a proper regulatory regime for estate agents.
"Currently anyone can set up as an estate agent and when the market turns up no doubt it will once again be an attractive market for the unscrupulous. We believe that much more will be achieved by properly regulating the people rather than trying to control the process."
A spokesperson for the Council of Mortgage Lenders (CML) said:
"We think the changes to Hips are unhelpful in the current market as they are bound to discourage discretionary sellers from marketing properties.
"These sellers are likely to adopt a 'wait and see' approach."
Sarah Garrod
