Home Information Packs - An Overview

Most people have heard of Home Information Packs (HIPs) but unless you work in the property market, or have sold a property in the last 6 months, your understanding of the subject has probably been gleaned from a handful of scare stories in the papers.

If you are thinking of buying or selling a property in the coming months you will need to have a basic knowledge of HIPs. To understand the current system, which is still in transition, it is important to appreciate how we got here.

The Story So Far

The first time the public heard about HIPs (then known as Seller’s Packs) was in a manifesto promise made in 1997 by the soon to be Labour Government. Originally presented as the solution to gazumping, the path of HIPs was to be a rocky one. It took six years of consultations, Green Papers, White Papers, pilot schemes and draft legislation before the idea finally made it to Parliament with the introduction of The Housing Bill in 2004.

Having made it through Parliament HIPs were to hit the headlines again in the summer of 2007 when the most controversial element of the pack, the Home Condition Report (HCR), was made voluntary. It became clear that lenders would not accept HCRs and to make matters worse there was a shortfall in the number of Home Inspectors required. Most of those that had been training for the role quit their courses complaining that they had wasted their savings training for a non-existent job.

Finally June 1st 2007 was set as the date for the implementation of the slimmed down pack but there was to be one further twist in the tale. Following a successful application for a Judicial Review by the Royal Institution of Chartered Surveyors the packs were delayed by a further 2 months and would then be phased in, starting with properties containing 4 or more bedrooms. On 14th December 2007 the roll out of HIPs was completed and it became mandatory that a pack should have been applied for before any residential property can be offered for sale.

Perhaps the greatest change that occurred during the 10 years that it took to introduce HIPs was the shift in emphasis from a solution to gazumping to a tool to increase the energy efficiency of the country’s housing stock.

Was it Worth the Wait?

So, after 10 years of twists and turns what are we left with? In simple terms the current pack is made up of a series of legal documents that were previously assembled by the buyer’s solicitor and a new document called an Energy Performance Certificate (EPC).

The legal documents are The Land Registry Title Plan, Office Copy of Register of Title, The Local Search and The Water & Drainage Search. The first two were already available on the internet for download (current cost is £3 each).

Perhaps more interesting is the EPC. This document contains two graphs, one showing how energy efficient the property is and the other the property’s impact on the environment. A useful document on the face of it but unlikely to affect buying decisions. Faced with two identical properties energy efficiency may be a factor but, unless they are newly built, when do you ever find two identical properties?

The most important test of HIPs is whether buyers are interested in them and I can tell you that during the 6 months they have been around not a single buyer has called our office and asked to see one.

The Future

When HCRs were removed from the packs the Government threatened that if voluntary take-up was insufficient they would look again at making them mandatory. Initial evidence suggests that voluntary take-up is virtually zero. The problem now is that most of those training to undertake HCRs dropped out and as a Chartered Surveyor I can tell you that there is little appetite from my profession to undertake what is generally viewed as a dumbed down report.

The next important date in the HIP’s calendar is 1st June this year. That is the date when the temporary provision for first day marketing is due to cease. This is likely to leave sellers frustrated (particularly those in leasehold properties) as they are forced to wait weeks while a HIP is being assembled before anyone can view their property.

It is hoped that this process can be speeded up over time and indeed moves are already underway to facilitate the electronic transfer of conveyancing documents. E-conveyancing has the potential to deliver the faster transactions that were the original aim of HIPs but it is a slow process. Everyone from solicitors to Local Authorities will have to embrace the changes and it is currently estimated that the benefits will not be felt until 2010.

Significant changes are coming but we know by now not to expect anything to happen quickly.