Home » Legal services » Property Law » Home Information Packs

Home Information Packs

In a bid to reduce the stress and delay in the house buying and selling process, the Government has introduced 'Home Information Packs' (HIPs), which will have to be produced by the vendor of a property before it can be put on the market.

Introduced in August of 2007, the HIP requires a vendor to assemble prior to sale much of the information that is currently obtained during the sometimes lengthy survey and searches process. The vendor will bear the cost of producing the HIP when a property is put on the market. Currently, any survey and the relevant searches are paid for by the prospective purchaser. If the purchase does not proceed, for the buyer this is money down the drain.

All vendors of houses and flats in the UK will have to supply prospective purchasers with a HIP.

What is a HIP?

The contents of the HIP are:

• a sale statement - which will indicate whether the sale is freehold, leasehold or commonhold - and any covenants or restrictions which apply
• evidence of the vendor's title
• replies to standard preliminary enquiries made on behalf of a purchaser, including planning consents etc.
• for new properties, copies of warranties and guarantees
• any guarantees for work carried out on the property
• replies to local searches
• a home condition report based on a professional survey of the property, including an energy efficiency assessment.

Also, for leasehold properties:

• a copy of the lease
• the most recent service charge accounts and receipts
• building insurance policy details and payment receipts
• regulations made by the landlord or management company
• the memorandum and articles of the landlord or management company.

The home condition report will be used by lenders in the underwriting process for mortgage lending. It is based on a 'level 2' inspection, which will not be as comprehensive as a full structural survey but will be somewhat more detailed than the mortgage valuation report currently used by lenders.

The Government is taking steps to set up training for the estimated 7,500 inspectors who will be needed to carry out home condition reports.

It is estimated that assembling the contents of the HIP could add up to £1,000 to the cost of selling a home and there are concerns that the process will attract inexperienced and unregulated firms into the market, creating risks for both purchasers and vendors.

Contact our property team for expert advice on property purchases and sales.