Hips

News stories about home information packs (Hips) or home sellers’ packs have been getting steadily more gloomy as their compulsory introduction date looms closer.

Estate agents have taken advantage of the uncertainty and apathy surrounding Hips as an advertising ploy to convince customers to put their houses on the market before Hips arrive.

Industry experts are concerned that Hips might even slow down the house selling process when they come into force for all home sellers in England and Wales from June 1.

Where did the idea for Hips come from?

In 1998 the government came up with the idea of “sellers’ packs” to speed up the house buying process by providing potential buyers with all the information they needed for a property: local searches, evidence of title from the Land Registry, a Home Condition Report (HCR) and an energy certificate. The packs would be put together and paid for by the seller.

What do the packs contain now?

Nearly 10 years later and following several alterations, the packs now contain less mandatory information.

In their current form they will contain: an index of contents, an Energy Performance Certificate (EPC), a sale statement, standard searches by local authorities, evidence of title and information on leasehold or commonhold sales.

However in acknowledgement that some searches may take a while to be carried out, homeowners need only include evidence that they have requested a property search from their local authority. This leaves Hips looking decidedly slim.

Why the change?

There have been various arguments about the packs, mostly centred around the extra cost they would involve for sellers, and this seems to be one of the main reasons that HCRs went from being an integral part of the packs to a voluntary addition. Original estimates put the cost of Hips, including an HRC, at £700 to £800. The watered-down Hips are likely to cost £300 to £400.

Why are experts concerned?

Several big bodies, including the Royal Institution of Chartered Surveyors, the National Association of Estate Agents and the Council of Mortgage Lenders, have all voiced their worries that Hips will have a damaging impact on the housing market. They believe the packs do not contain enough information to make a difference to the problem of sales falling through, but are an administrative inconvenience that could damp sales. In particular, “speculative” sellers may think twice about putting their property on the market.

If I decide to sell my house after June 1, what do I need to do?

You will need to get a Hip before you put your house onto the market. Failure to do so can result in a £200 fine. Packs can be obtained via an estate agent, solicitor, specialist pack provider or supermarkets such as Asda which is providing free Hips as part of its new plans to offer homes for sale.

How much are Hips likely to cost?

Different providers will charge different amounts, but some experts say they could be around £300. The EPC is likely to cost around £85, and providers say this may drop as the number of providers increases and the market becomes more competitive.

 If you get a Hip from the estate agent selling your home you will either be charged straight away or the cost will be added to the agency commission. In some cases, if the sale does not go through to completion, you may not have to pay the cost of the Hip.

Can I do one myself?

Whether or not you use an estate agent you can still put together a pack yourself. You will need to contact a solicitor or conveyancer to arrange for the searches and legal documents or you could go to the appropriate local authority or to a personal search company for the searches, and to the Land Registry for evidence of title. You will still need to contact a domestic energy assessor to do the EPC and a home inspector if you want to include a home condition report.

What is an energy performance certificate?

This is an assessment of the energy efficiency of your home, focusing on factors such as loft insulation, the age of the boiler or whether you have double glazing. Each house will be graded between A and G, with most homes in England and Wales expected to get either a D or an E.

The report will contain advice on how to minimise energy wastage, showing how much money could be saved in bills each year and what grade the property could attain if all the changes were made. The government says the reports will raise energy consciousness and encourage buyers to consider environmental factors when looking for a house.

Can I get a Hip before June 1?

More than 100 organisations have signed to provide Hips straight away, including Reeds Rains (www.reedsrains.co.uk) and Simply HIP (www.simplyhip.co.uk). You can find details of these on the government’s website www.homeinformationpack.gov.uk.

If you live in Bath, Cambridge, Southampton, Huddersfield, Newcastle, Northampton or Southwark you could get a free Hip as these areas are being used to try out the packs and benefited from £4m of funding. One of the best reasons to take advantage of this is that sellers will get free home condition reports as well as energy performance certificates included in their Hip.