If you put your property on the market without having a Home
Information Pack (HIP) you will be breaking the law. This became law
on 1st August 2007 for 4-bed or bigger properties, on 10th September
2007 for 3-bed houses and for everything else on 14th December 2007.
However, the government will, until June 2008, allow sellers to put
their properties on the market if they have merely commissioned and
paid for a HIP (as opposed to physically having a HIP).

If you put your property on the market before the dates mentioned
above, you will not need to have a HIP prepared until the government
announces that they are compulsory in these circumstances.

A Home Information Pack is basically an indexed set of specific legal
documents..

Some documents MUST be included in the HIP (compulsory) whereas others are optional and can be included at the seller’s discretion and at an increased cost.

Minimum requirements for a freehold property are:

• An index (i.e. a list of the contents of the Pack)
• A sale statement (summarising terms of sale)
• Evidence of title
• Standard searches (i.e. local authority enquiries and a drainage and water search)
• An Energy Performance Certificate

If the property you are selling is Leasehold or new, then various additional documents will also need to be included – please call us for more details and a quote.

We are encouraging sellers to include additional optional documents in a HIP to help make the process more efficient. These include:

• A Property Information or Home Use form
• A Fixtures and Fittings or Home Contents form
• A Home Condition Report
• Guarantees and warranties
• Other relevant searches

The idea is to speed up the conveyancing process by giving property buyers as much information as possible BEFORE they make an offer. With the old system the number of transactions which were delayed or failed was higher, as in many cases vital information came to light only after an offer had been accepted.

Government research shows that a typical house sale transaction takes over 11 weeks. The new system could shorten this period significantly by ensuring that buyers and sellers have more of the information they need at the start of the process.

Under the existing system, around £350 million is wasted each year on aborted housing transactions. The Home Information Pack system will help to reduce the number of these failed transactions and save some of these costs.

Based on trials already completed, we expect that the majority of straightforward Home Information Packs can be assembled in about 7 to 14 days.

Properties should not really be marketed until the HIP is finalised. However, in cases where information required for the pack cannot be obtained immediately, it will still be possible to place the property on the market as long as there is evidence that this outstanding information (often searches) has been applied for.

As a minimum, the Energy Performance Certificate needs to be available and this means that the visit from the qualified energy assessor must have taken place before the property can be marketed.

Sellers will now be responsible for the costs involved in having the HIP prepared. This is different from the old system where the costs of searches were borne by the buyer.

The average cost for a freehold HIP is probably around £250-£300 plus VAT (more for leasehold properties).

Apart from the cost of the Energy Performance Certificate (which is a new addition to the process) the overall costs should not be higher than they were under the old system.
 
It is important to note, however, that the responsibility for paying for the local and drainage searches and the Energy Performance Certificate will switch from the buyer to the seller.

As a buyer, your costs will be reduced by the cost of the local search, drainage/water search and any additional searches and surveys included in the seller’s HIP. The seller will have already paid for these and handed them to you as part of the HIP!

If you are buying a property we strongly recommend that you have us review the HIP handed to you by your seller prior to you making a formal offer. The fee for this review is small and would be deducted from your final conveyancing fee should you proceed with the purchase.

HIPs are available for all prospective buyers to look at unless you are a seller and have stated that you would not be prepared to sell to a particular person. If that is the case you are not compelled to show that person your HIP.

The person responsible for marketing the property must have access to a pack and that is normally your Estate Agent. The original documents may be kept either by you, as the seller, or your conveyancer.

MovingAhead can provide a paper copy, if required, at no extra cost.

A HIP remains valid for as long as the property is continuously marketed for sale. Allowance is also made for periods when the property might be taken off the market whilst, for example, it is under offer.

The main time-sensitive items in the Home Information Pack are the local searches. These are generally acknowledged to be valid for six months. As the majority of sales complete within six months this should not usually be a problem but if you are selling and your searches do go out of date, you will NOT be compelled to renew them after this period.