CTAB Mortgage Desk
Home Information Pack

HIPS are coming – Are you ready for 1 June?

If you haven't seen or heard anything about HIPS in the press, on the radio or on the internet then you soon will… A HIP is a 'Home Information Pack' or 'seller's pack', a document that you will have to buy and have produced BEFORE you put your house up for sale. This major change will be introduced by law from 1st June 2007 and they are almost certainly going to have an impact on the housing market.

The HIP code has been launched by the Association of Home Information Pack Providers to help protect consumers. Indeed new companies are springing up all over the place offering HIP services, nearly always using a pun on the word HIP in their title. It is a completely new industry with opportunities for many to make money on the back of the best intentions of the Government.

Many people spend more time researching the purchase a new TV than they do a new house relying on the limited information within estate agents' details and a quick tour of the property, however that will soon change. The Home Information Pack is being introduced for all the right reasons. Once properly established it should provide more certainty to the house buying and selling process, provide buyers with much more relevant information before they make an offer and considerably reduce the wasted effort and cost when a purchase falls through.

The HIP is effectively a legal pack with much of the information provided being that already produced by solicitors within a property transaction.

The exception is that each pack must include an Energy Performance Certificate. A report must be produced by an independent, qualified inspector which will outline the impact of the property on carbon emissions. It will provide an opportunity to make homes more energy efficient and provide information about how much a new home is likely to cost in fuel bills and how improvements are going to be made. This part of the HIP is likely to cause much initial frustration as, although plenty are being recruited and trained, the shortage of inspectors will be a factor in the time taken to prepare a HIP.

Where and how to get a HIP

So the question is being asked, where will I be able to get a HIP for my property? Most people will initially approach an estate agent that they intend to sell the property through. It will be the responsibility of the agent, in most cases, to ensure a HIP is in place before the property is marketed, they will be fined if it is not. However the HIP contains legal elements such as the evidence of title, the standard searches, the leasehold or commonhold information, a sales statement and an index.

Much of this information currently forms much of the standard conveyancing work undertaken by the solicitor during the purchase, so it is understandable that estate agents do not feel willing to prepare it. It makes sense then to approach a qualified conveyancer and/or solicitor to provide the HIP either directly or via the estate agent. Generally they are experienced, established and reliable. As the majority of the HIP content is part of the present conveyancing work they are in the best position to provide a quality service at a reasonable cost which may then be offset by a discount to the conveyancing cost if both are provided by the same organisation. Some are even offering a formalised combined HIP and conveyancing product.

Legal firms have been involved in the pilot schemes that have been running regionally and have already been providing HIPs to consumers for some time, and a few of them have also been given 'early adopter' status to feedback market information to the government. There will be many column inches written about HIPs over the coming months. It could well have a short term impact on the housing market but once established and working efficiently the benefits to the consumer are many, particularly if the HIP is supplied through an experienced, qualified and trusted organisation.

Your Home may be repossessed if you do not keep up the Mortgage Payments Secured on it!