Home Sales Wales HIPs Page
What is a Home Information Pack
A Home Information Pack (HIP) is a set of documents providing important information about a property, including legal title, its energy efficiency and planning permissions. As the Pack provides most of what buyers need to know up front,they will be able to make faster and better informed decisions about the properties they are considering. Essentially, buyers will be able to make anoffer on a property with confidence.
Home Information Packs have been introduced to improve home buying and the selling for the consumer and as partof wider action to cut carbon emmissions from homes. This means that everyperson marketing a home after 14 December 2007 must have commissioned a Home Information Pack before putting their property on the market.
Background
Home Information Packs are intended to improve the home buying and selling experience for consumers and to reduce the carbon emissions from homes. Thecurrent home buying and selling process is slow, expensive and uncertain. Moreover,most buyers are provided with little or no information about the energy efficiency of the home they are considering buying.
This has been confirmed most recently by the HIPs Baseline research, conducted in summer 2006by the Building Research Establishment and Ipsos MORI. The key conclusionswere:
1. The average (mean) transaction time from marketing to completion was over 6.5 months. Median transaction times were nearly 5 months. 1 in 4 takes 9 months or longer.
2. The averagetime from "offer agreed" to "exchange of contract" was 81days - about 10 days longer than in 1998
3. The averagecost of a completed transaction was £1,546, with first-time buyers payingslightly more
4. 23% of buyers who had completed a transaction experienced at least one failed transactionduring the course of their most recent house buying and selling experience
5. Where atransaction fails at a sufficiently late stage between offer and exchange thebuyer's wasted costs are typically over £1000
Moreover,research by the Energy Savings Trust has shown that:
Our homes account for 27% of the UK'scarbon emissions contributing to global climate change
The average home owner would save around £300 in fuel bills by making their home more energy efficient
What's in a Home Information Pack
A HIP includes documents that are required when homes are bought and sold. Some documents are mandatory and others optional.
The mandatory documents are:
1. An index (ie a list of the contents of theHIP)
2. An EnergyPerformance Certificate (EPC)
4.Standardsearches (ie local authority enquiries and a drainage and water search)
5. A salestatement (summarising the terms of sale)
Optional documents include:
1. A HomeCondition Report (HCR)
The sale statement should provide some basic information about the property, including:
- The address of the property being sold.
- Whether the property is freehold, leasehold or commonhold
- Whether the property is registered or unregistered
Whether or not the property is being sold with vacant possession
Home Information Pack Index
The Index lists the documents contained in the Pack and provides a checklist for sellers, buyers, estate agents and enforcement authorities.
Where a document that must be included in the Pack is unavailable, the Index must say so, give the reason it is missing, and indicate what steps are being taken to obtain it.
Where documents are added to or removed from the Pack at a later stage, the Index should be revised accordingly.
Energy Performance Certificate
Energy Performance Certificates tell you how energy efficient a home is on a scale of A-G. The most efficient homes - which should have the lowest fuel bills - are in band A.
The Certificate also tells you, on a scale of A-G, about the impact the home has on the environment. Better-rated homes should have less impact through carbon dioxide (CO2) emissions.
The average property in the UK is in bands D-E for both ratings. The Certificate includes recommendations on ways to improve the home's energy efficiency to save you money and help the environment.
Most sellers of newly built homes will have to provide a predicted assessment of the energy efficiency of the property, but a full Energy Performance Certificate should be provided to the buyer when the home is completed.
The Home Information Pack must include:
- The local land charges register relating to the property being sold. Once a search is completed, which can be carried out by a personal search company or a local authority, you will receive an official search certificate.
- Other records held by the local authority on matters of interest to buyers, such as planning decisions and road building proposals. These are referred to as local enquiries in the Home Information Pack regulations. A local authority or a personal search company can be used.
The provision of drainage and water services to the property. The local water company or a personal search company can be used (however, the search must comply with the HIP Regulations).
Evidence of Title
These documents prove that the seller owns the property and therefore has the right to sell it. Where the property being sold is registered, certain documents that are available on request from the Land Registry must be included in the Pack. These provide an up-to-date official record of who owns the land, and consist of:
- Official copies of the individual register (made up of a property register, proprietorship register and, typically, a charges register)
- An official copy of the title plan
In the case of the sale of a commonhold interest, official copies ofthe register and title plan should be produced for both the unit andcommon parts.
For sales of unregistered land, the Pack must include copies of a certificate of an official search of the index map (obtained from the Land Registry), and those documents that the seller intends to rely on to provide evidence of title to the property, and thus the right to sell it.
Optional documents include:
- A Home Condition Report (HCR)
- Legal summary
- Home Use/Contents Form
- Other documents
A Home Condition Report contains information about the physical condition of a property, which sellers, buyers and lenders will be able to rely on legally as an accurate report.
The Report is an important part of the Pack, and can be included by sellers on a voluntary basis.
Benefits of a Home Condition Report
Sellers who provide a Report will have an early opportunity to carry out repair work on the property or obtain quotes prior to marketing.
Buyers can use it at the beginning of the home-buying process to minimise the possibility of being faced with unexpected repair bills and other surprises.
Lenders can benefit by using the Report to inform their valuations, reducing the need to repeat a detailed on-site inspection at the buyer's expense. The Government believes there will be significant benefits to home sellers if they top up their Packs to include full Home Condition Reports, and that this is a product that the market can deliver. Communities and Local Government is working with stakeholders to facilitate the voluntary take-up of the full Report, and has invested resources in promoting and developing it for consumers.
Home Inspectors
Home Inspectors responsible for preparing Home Condition Reports will hold a qualification at NVQ Level 4 (equivalent to degree level), and will require in-depth knowledge and practical understanding of residential building construction and defects across a range of properties as set out in the approved National Occupational Standards for Home Inspectors.
Home Information Packs will contain some complex documents that can be difficult to understand. The optional summary of the legal content of the pack could therefore be very helpful to buyers, although it will not remove the need for buyers to take their own legal advice as well.
Home use and home contents forms let sellers give buyers information on a range of matters relating to the property.
These include information on boundaries, notices, services, sharing with neighbours, planning permissions and other matters of interest to potential buyers.
It is usual for sellers to declare which fixtures and fittings and other contents of the property are included in the sale, are excluded from the sale, or are subject to negotiation.
The Law Society also produces its own forms to help solicitors and licensed conveyancers produce Packs.
Sellers could speed up the sale if they include non-standard searches in the Home Information Pack where appropriate.
For example, it's standard practice to obtain a mining search in areas where coal mining has taken place. Sellers in these areas will save time if they provide this search in the Pack.
Other searches cover rights of way, ground stability and actual or potential environmental hazards such as flooding and contaminated land.
Sellers will also want to include guarantees and warranties for work already carried out on their homes.