Home Information Packs: How they will affect you

By MoneyhighStreet Staff. Published on April 10, 2007 This post currently has no comments.

Selling up

Home Information Packs (HIPs) are coming to a home near you soon. In fact from 1st June 2007, just six weeks away, it will be illegal to put your house on the market without a HIP.

So what is a HIP and how will they affect you? This article explains.

Home Information Packs are meant to make selling your house easier by providing a range of useful details to buyers such as the energy efficiency of your house and some legal information about the freehold or leasehold status of the property. By law, you will be unable to market your house until you can offer a completed pack to potential buyers.

HIPs will cost sellers around £600 to prepare, however these costs are not regulated and you could be charged more by the relevant inspectors, particularly if you want a fast track inspection.

Although sellers can prepare much of the packs themselves, saving time and costs, the Energy Performance Certificate (EPC), which is an essential part of the packs, can only be prepared by a qualified inspector. This is where many of the problems will occur.

The Government has calculated that it needs 7,500 inspectors, however only 1,000 have been trained and registered already. This means that there will be a huge shortage of qualified inspectors available when the packs become compulsory in June. There is likely to be a long waiting list of sellers desperate to get their homes inspected to complete their packs.

This backlog could potentially have a large impact on the housing market from June onwards.

Should you put your house on the market before June?

If you market your house in the few weeks remaining before June 1st, then you will not need a HIP. You will save the £600 that is costs to prepare the pack and not need to join the waiting list for your EPC inspection.

If many people decide to market their houses now, to beat the HIPs, then a sudden increase in the numbers of properties on the market could reduce the sale value of your house as supply outstrips demand.

If you are intending to sell anyway, then it seems sensible to start marketing your property now, rather than wait until you have to get a HIP. There does not seem to be a flood of new houses on the market at the moment, which indicates that property prices are not being affected so far.

Will there be HIP chaos after June 1st?

Sellers could start to experience problems compiling their HIPS soon after June 1st, mainly through the shortage of inspectors. This could slow down the number of properties being marketed and therefore impact the housing market, probably increasing house prices as supply is not met by demand.

For several months, the waiting time for HIPs could distort the property market, causing chains to collapse and more stress and costs than are currently experienced by buyers and sellers.

If chaos does ensue, then we believe that the outcry from estate agents and the press will force the Government to act - probably dropping the enforcement of HIP's, or at least relaxing some of the restrictions that they impose.

So there is a chance, unfortunately small, that HIPs will become voluntary as opposed to mandatory. Sellers volunteering information about the energy efficiency of their houses is a good thing, and drives the demand for improvement in insulation and energy conservation.

There is already evidence that buyers are seriously evaluating the energy efficiencies of houses when considering them for purchase, so an audit by a qualified inspector could help the sale of a property. This should be voluntary, rather than mandatory, though.

So will Home Information Packs affect you?

If you are going to buy or sell a house soon, then the answer is “yes”. Unfortunately your experience compiling a HIP is probably not going to be good, at least until there are sufficient inspectors to provide a timely inspection service.

Let's hope that the Government sees sense and either delays HIPs until there are more qualified inspectors, or, better, makes HIPs voluntary rather than mandatory.

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