Re:locate magazine | Employee Support | Property | Buying & Selling | HIPs | Still confused as to what exactly HIPs are?

Home Information Packs (HIPs) are part of a larger Government initiative designed to speed up the sale of residential properties. However, the packs are the only part of the impending legislation that vendors will be required by law to provide. Under the Housing Act 2004, a HIP will need to be produced before a property can be marketed. This in theory should have significant benefits for the relocating employee, giving them an authoritative and reliable ‘take’ on a house, in addition to any sales particulars that they’ll have received via an estate agency.

The Regulations are not set to take effect until 2007. However, a dry run has been planned for the summer of 2006, in which vendors could voluntarily participate. This should provide those dealing with relocation an opportunity to test out the scheme, and to be ready to give advice to employees regarding HIPs before it becomes an offence not to comply with the regulations.

Under the new legislation, it will be the seller’s responsibility to provide the following key information up front:

Evidence of title and the terms of sale
Replies to standard enquiries and the sellers’ property information form
Copies of any planning applications and approvals, listed building and building regulations or building control certificates
Copies of any warranties and guarantees if the property is newly built or for any works carried out
Replies to Local Authority Searches
A house condition report (HCR), including an energy efficiency assessment.

For leasehold properties a copy of the lease, service account charges and receipts, building insurance policy details, additional regulations made by the landlord and their contact details should also be provided.

The house condition report (to be carried out by qualified inspectors only), is intended to be a mid-range survey similar to the Royal Institute of Chartered Surveyors’ Homebuilding Survey and Valuation, but without the valuation part. It should provide details on the general condition of the property, taking account of its age, character and location, while alerting buyers to any defects or matters that need attention. Providing buyers with an independent report to enable them to make informed decisions as to which properties to view and which ones to place a firm offer on as appropriate, would appear to be an invaluable asset when time is of the essence.

The Government estimates that the cost of preparing a Home Information Pack will be between £500-£600 (though other estimates are as high as £1,000), and it expects to offer buyers the option to defer payment until after the sale. In reality, the process may be cost-neutral, when seller becomes buyer and is able to take advantage of the packs for themselves.

An HIP should highlight any potential problems that could delay the sale. At present, such information is generally only made available after an offer has been made and accepted, which has the undesired effect of slowing the whole process down. In Denmark a similar system has been in place for some time and appears to have been a success. The time between offer and exchange has come down to what must be an all-time low of just one week - at present in the UK, the average timescale is eight weeks.

© 2005. Article taken from page 12 of the Winter 2005 edition of Re:locate Magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.