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What is Hipsxchange |
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The Hipsxchange is a website aimed at informing you of the latest developments in Home Information Packs
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What is a Home Information Pack? |
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Home Information Packs (HIPs), sometimes described as sellers packs, are intended to provide prospective buyers with all the basic information they need about a property before they buy.
HIPs are expected to become compulsory in England and Wales from early 2007, although a voluntary national dry run is being planned for mid 2006.
Steps to streamline the home buying and selling process are also underway in Northern Ireland and in Scotland, where a single survey and Purchasers Information Pack is being proposed.
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At what stage of the selling process will they be required? |
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A HIP, which is no more than three months old, must be ready when a property is put up for sale.
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What will HIPs contain? |
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Although the precise details have yet to be confirmed by the government, it is expected that they will contain the following:
terms of sale a general description of the property, who is selling and why
evidence of title, in other words a copy of the title deeds
replies to standard searches for information about the property held by local authorities, water/drainage search and an environment search (these would previously have been undertaken by the buyer`s solicitor)
copies of any planning, listed building and building regulations consents
a seller`s property information form which will give details, for example, of which fixtures and fittings are remaining in the property
guarantees for items such as central heating boilers or new windows
for new properties, copies of guarantees and warranties
a home condition report, similar to a homebuyer`s report, carried out by a qualified home inspector, including an energy efficiency assessment.
For leasehold properties, additional information will be required including:
a copy of the lease
latest service charge accounts
details of any current or planned works to the building
details of the buildings insurance
details of the management company, including its memorandum and articles of association, and any rules and regulations they have put in place for the property.
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Why are HIPs needed? |
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Government research has found that a huge amount of money is being wasted each year by home buyers who make offers on properties, pay for surveys, searches and so on, and then discover problems which cause sales to fall through.
The government believes that if the seller has to provide the necessary information about the physical and legal health of the property upfront, fewer transactions will fail.
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What will they cost? |
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The government estimates that the average cost of a HIP for a three bedroom semi will be around 650. But it expects that competition between HIP providers will drive costs down. Some lenders and estate agents may offer them free of charge. Where there is a charge, the seller is likely to be asked to pay on completion when other expenses such as solicitors` and estate agents` fees also become due.
Sellers will need to shop around. Even where HIPs are offered free, it will be necessary to compare the overall cost of the service being provided.
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What will be the effect on the property market? |
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There are mixed views on this. HIPs will mean increased costs for sellers and it has been argued that this could discourage some people from putting properties up for sale. But as most sellers go on to purchase another property their extra selling costs will be offset by lower buying costs.
On the positive side, HIPs are expected to speed up the house buying process as buyers will be fully aware of the condition of the property before they buy and most of the preparatory work for the sale will already have been done.
First time buyers in particular will benefit from lower buying costs and it is they who tend to keep the property market moving. In other countries where HIPs have been introduced such as Denmark, they did not have a discernable impact on the market.
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Will any properties be exempt from HIPs? |
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Where a property is sold privately to a friend or relative a HIP will not be required. Neither will they be necessary for sales of properties with sitting tenants, mixed commercial and residential property and non-residential property.
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