Home Information Pack (HIP)

HIPs were originally due be introduced in England and Wales on 1 June 2007. However, on 22 May (yes, the same year) communities secretary Ruth Kelly announced the launch would be postponed until 1 August and then only for houses with four bedrooms or more. Packs on smaller homes would be phased in thereafter, though exactly when and where is still unclear.

The reason for the delay was two-fold. Firstly, the Royal Institution of Chartered Surveyors (RICS) had recently launched legal action (a judicial review) against Communities and Local Government for failing to carry out a proper consultation of the packs before launch. In addition, there would not be enough domestic energy assessors to carry out the Energy Performance Certificate (EPC), which is a compulsory survey of the pack.

The original purpose of HIPs, which were first mentioned in Labour's 1997 manifesto, was to reduce the stress and expense of buying a home by presenting all the relevant information for the buyer to see upfront. This would include evidence of Title, terms of sale, searches, leasehold information, guaranties and warranties and even a survey, called a Home Condition Report (HCR). A seller would have to purchase a pack containing all of these documents before they could market their property for sale.

But, as the packs started to come to life, the government discovered that compiling information upfront was not easy and so the Hip started to fall apart. In July 2006 the government demoted the status of the HCR to voluntary as it was found buyers would be sceptical of a survey commissioned by the seller. There were also issues with the shelf life of the survey.

Then, in a HIPs consultation in January (2007), the government also conceded that sellers could have 28 days to gather searches and leasehold/commonhold information from the day their home was put up for sale. This was to prevent a bottle-necking of the housing market if sellers were delayed in obtaining the information. All other documents however, would have to be present.

In its most recent U-turn (22 May 2007), the government back-pedalled again and said that in fact, a seller can market their home without a pack as long as one is being sought. However, RICS has slammed this as a major loophole and said there is nothing to stop sellers applying for a pack, selling their property and cancelling the order.

Other critics such as Splinta (Sellers Pack Law Is Not The Answer) have argued that the definition of a four-bedroom house to which the packs will initially apply, is arbitrary.

Watch this space for the latest definition of a HIP, if indeed there is one. Much of the industry, including estate agents, mortgage brokers and even trained domestic energy assessors, are now sceptical the packs will go ahead at all.

However, due to an EU Directive to cut carbon emissions from housing stock, which must be in place by 2009, the EPC is expected to stay. Current estimates from trade body, the Association of Home Information Pack Providers (AHIPP) put the cost of HIPs in the region of £300 to £400 although they may cost more is a seller opts for a voluntary HCR.

Last Updated: June 2007 © Moneyextra.com

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