Certus Mortgage Solutions: Home Information Pack (HIP)

The Basics

What is a Home Information Pack?

A Home Information Pack, more commonly known as a HIP, contains a variety of documents about a property being offered for sale. HIPs will be mandatory from 1st June 2007. However, the use of HIPs on a voluntary basis will be encouraged from July 2006.

This new legislation will require sellers of residential property to provide a HIP before marketing a property for sale and to make it available to prospective buyers within 14 days of request.

What does a 'standard° HIP contain?

The absolute detail is still to be confirmed by government. Currently, however, we do know that the contents fall into two broad categories - legal documentation and home condition reports (including an energy efficiency report):

Terms of sale
Evidence of title
Standard searches
Planning consents, agreements, building control certificates
Seller's Property Information Form
Warranties and guarantees
Home Condition Report (HCR)
Energy Efficiency Report (EER)

Further documents will also be required for a leasehold property. As things stand not all documents listed above will be a mandatory part of the HIP. Some will be optional, however, all will be required in order to exchange and complete on a property.

What is a Home Condition Report (HCR)?

The HCR will provide impartial and reliable Information on the condition and energy efficiency of the property. It will be a mid-range inspection, broadly similar to the RICS Homebuyers Survey and Valuation. The report will provide a statement of fact about the property's condition. It will be an independent assessment written with neither the seller or buyer in mind. The HCR will not include a valuation.

The report will list key defects and grade them according to their seriousness, providing an explanation of poor grading where appropriate. All HCRs will be lodged on a secure central government database which will be accessible by lenders, conveyancers, estate agents, brokers, buyers and sellers. HCRs need to be no more than 3 months old at the time of marketing the property, and it appears these will remain valid until a house is sold or another report completed.

What is an Energy Efficiency Report (EER)?

This report provides an estimate of the current energy efficiency of the property using the government approved Standard Assessment Procedure (SAP). It is much like the energy efficiency rating seen on white goods such as fridges. A more energy efficient home will have a higher SAP rating, lower fuel bills and lower C02 emissions.

What is a Home Inspector?

The only people authorised to carry out HCRs will be Home Inspectors, and anything from 4,000 to 8,000 will be necessary to service the market in England and Wales. The Home Inspector will be a new profession, and accordingly will need a new qualification to accredit the role. Establishing an independent certification body will ensure consumer protection and provide consumer confidence in the HCR.

How much will a HIP cost?

The government estimates the cost of assembling a HIP to be in the region of £635 for an average sale. This amount includes £200 for local searches, £10 for obtaining evidence of title from the Land Registry, £300 for a HCR and around £125 in legal fees for the preparation of the terms of sale and pack assembly.

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Certus Mortgage Solutions can arrange a HIP for you so that you will be able to provide this pack to prospective buyers and of course - the estate agent you chose to help you sell your property.