Joules Estate Agents

Home Information Packs - HIPS

Ruth Kelly announced on the 22 May 2007 that the Home information pack (HIPS) has been delayed until August . with some changes that will be implemented.

The main changes are as follows:-

• Start date delayed until 1st August, 2007.
• From 1st August mandatory HIPs will only apply to properties of 4 bedrooms or more.
• It is proposed that this will be extended to smaller properties as soon as possible - although no date given.
• Until the end of 2007, those sellers that need a HIP are able to market their property on day one - provided they have instructed a HIP to be carried out.

• Evidence of title.
• Copies of planning, listed building or building regulations consents.
• A local search.
• Guarantees for any work on the property.
• An energy performance certificate.

The government has announced a delay to the introduction of Home Information Packs (Hips) in England and Wales.

The whole idea of the packs has been controversial from the outset. Some warn that it will add an unnecessary layer of expense and bureaucracy to the house selling process - but others argue that it brings much-needed transparency.

I want to sell my house and was told that I will need a Home Information Pack. What are they?

The packs are to contain information that will be useful to any potential buyer. Copies of title deeds, any recent planning permission or building consent given on the property, a local area search and an energy performance certificate will all be in the pack. Under the rules, everyone who puts their property up for sale in England and Wales will eventually be legally obliged to produce a Hip. Failure to produce a Hip can lead to a substantial fine. Scotland is set to get its own version of Hips in 2008.

Do I still need one?

Not quite yet.
Hips were meant to become compulsory for all houses put on the market from 1 June onwards. But Communities and Local Government Secretary Ruth Kelly has now announced that the introduction has been pushed back. Now, from 1 August only four-bedroom homes will have to have a Hip. The reason, Ms Kelly told the House of Commons, was that there needed to be more assessors in place to produce enough energy performance certificates - as many as 2,000 more than are currently accredited. Ultimately, once more assessors are trained, the requirement to have a Hip will be extended to smaller properties. Another key change announced by the government is that house sellers will not have to a Hip in place before putting their property up for sale. They will be able to start marketing and then obtain a Hip.

Energy performance certificates - what are they?

The idea of the certificate is that, at a glance, would-be buyers will be able to see the property's energy efficiency - a bit like when they buy a fridge. The homeowner will also be presented with some tips on how the energy efficiency of their home can be improved. Energy performance certificates kill two birds with one stone - providing information for homebuyers and ensuring the UK complies with an EU directive which comes into force in 2009. However, the cost of having a property's energy performance assessed has been estimated at anything from £100 to £150. Thousands are in training to become energy performance assessors, as the jargon has it, to inspect properties new to the market and issue certificates. But only 500 have so far been accredited.

Why are the packs being introduced?

Hips have been in the offing for a decade.
The Labour government went into the 1997 general election promising to introduce Hips, with the express intention of reducing the number of property sales which fall through. The idea is simple: the more information that is presented to the buyer upfront, the slimmer the chance of a nasty surprise scuppering the sale further down the line.

I remember that originally Hips were meant to contain a structural survey - has that plan been dropped?

Yes.
Last year the government announced that Hips would, for the time being, not have to include a structural survey. Many thought that dropping the requirement to have a survey would mean that the whole Hip project would be shelved. However, the government has pressed on with Hips.

How will I organise getting a pack?

That is unclear at present. However, estate agents are expected to offer to act as go-between for pack providers. Alternatively, homeowners maybe able to approach pack providers direct.

I have read that these packs could cost up to £1,000 - is this true?

This is probably a bit of an overestimate - but you can probably expect to pay £400-£700 for a Hip.
Potential buyers will not have to contribute to the cost of a Hip. However, they may want to get their own local authority searches done and mortgage companies will still insist on a proper valuation.

I am buying a property. How much store should I set on the information in the pack?

The information will be useful but it may soon be out of date. Your solicitor may well advise that you get your own searches done. Your mortgage provider may also want fresh property searches. In other words, they may well disregard Hips.

The judgement was only about EPCs - why can't you do HIPS on their own

As the statement said, the HIP and EPBD regulations are tied together. They could not be separated quickly, and that would have made no sense given the package we have announced.

Why don't you just scrap this failed policy?

We believe that tackling carbon emissions from homes and getting a better deal for home buyers and sellers is the right thing to do. Key green groups - e.g. FoE and WWF - agree. That is why we have taken pragmatic steps to address concerns whilst preserving the principles of HIPs and EPCs and ensuring a smooth transition for the market.

Why don't you just fight RICS in the courts if you are so confident of your case?

We have reached an agreement with RICS which gives us a pragmatic way forward and will prevent lengthy legal delays. Both we and they are committed to the swift and smooth introduction of both HIPS and EPCs.

Are you just doing this because there were not enough energy assessors?

The recent uncertainty created by the court case and deliberate attempts to disrupt delivery of the programme have meant that some assessors have adopted a "wait and see" approach before signing the cheque to become accredited. The approach we have announced today should give them the reassurance they need.
There are over 2,500 people currently in training. A further 3,200 have already passed their home inspector or domestic energy assessor exams. Of those, 1,500 have been accredited or have applied for accreditation but only 520 of these have been fully accredited. So there are more than enough in the system, and the phasing should allow us to build up numbers in a way which matches need in the market place.

If you are consulting now, why didn't you consult in the first place?

EPCs originally formed part of mandatory HCRs, and consultation was on that basis. When we separated the EPC from the HCR last summer we did not change the existing policy on the age of certificates. Consumers will take more notice of up-to-date information.

There will not be any work for energy assessors until 1 August.

August 1st phasing date is designed to ensure we have enough assessors in place to meet demand for EPCs. From August 1 packs - including energy performance certificates - will be required for the sale of four bedroom properties and larger. These properties - where there is the greatest potential to make energy efficiency savings - will ensure work for those energy assessors who have already been trained and accredited. We are also inviting councils and registered social landlords to work with us to introduce EPCs on a voluntary basis in social housing, for example at the time of stock transfers. This will also provide work for energy assessors at an early opportunity.