|
|
 |
|
Wed 8th September, 2010
News
The Introduction of Home Information Packs (HIPs) |
30th January 2006 |
 |
The Office of the Deputy Prime Minister (ODPM) has decided to delay the introduction of Home Information Packs (HIPs) until June 2007. As a result, many within our industry have once again put HIPs on the back burner. In my opinion, this is definitely the wrong approach!
The ODPM have delayed launch for one reason and that is to ensure that when HIPs are launched the whole industry is ready. So we must use this extra time wisely!
HIPs do not just effect estate agents; they impact on everyone involved in the house selling and moving process including mortgage lenders, brokers, solicitors and surveyors. A property will not be able to be marketed or sold without a HIP being in place.
The most common questions I am asked from mortgage introducers include:
What is a HIP?
A Home Information Pack (HIP) is a detailed report on the condition and energy efficiency of a property (Home Condition Report/HCR) bundled up with a local search and other legal documents like a fixtures and fittings list and possibly even a draft contract.
Why is the government introducing HIPs?
The government have decided to introduce HIPs to speed up the home moving process and reduce the number of abortive transactions.
When will HIPs be introduced?
HIPs will become law on 1 June 2007. Most residential property on the market after that date must have a HIP. Initial ‘dry runs’ will start in September 2006.
What is the dry run?
Initial testing of the HIP process will start in a limited number of local authorities later this year. This is to ensure that all processes and systems work correctly before full implementation across England and Wales in June 2007.
How much will they cost?
Initial indications are that a complete HIP will cost between £750 to £950 for a freehold residential property. Leasehold properties are likely to me more expensive costing between £1,300 and £1500.
Who will pay for HIPs?
Sellers will pay for the HIPs so home movers will not lose out, as even though their selling costs may increase, their buying costs should reduce! Funding options for HIPs will be numerous including: - interest free credit, deferred payments, credit cards, discounts for payment in advance and possibly even no sale no fee.
What will a HIP look like?
HIPs are likely to be held on a secure website hosted by the HIP provider and will probably extend to 40 or 50 pages. However, summary sheets of key points will be included to make them more accessible to potential buyers. Estate agents will be able to print hard copies or provide CD-ROMs to potential buyers if required.
Will buyers still have to pay for a valuation or survey when they buy property?
It appears that the majority of mortgage lenders will accept the Home Condition Report (HCR) as confirmation of security, but this may not be the case with all lenders. If a buyer wishes they can still obtain either a valuation or a full survey for their own piece of mind.
How do buyers obtain advice on the content of the HIP before they make an offer?
Advice on the content of the HIP will be available from many sources but the only free source is likely to be the estate agent selling the property. The HIP provider, Home Inspector (who produces the HCR) and independent solicitors should all be able to provide advice on the content of the HIP but charges for advice are likely to vary. A well-structured and possibly even white-labelled advice to buyers service will no doubt provide an opportunity to the mortgage introducer market to ensure they do not miss out on potential purchase leads.
Who will provide HIPs to sellers and estate agents?
Solicitors (such as Lawcomm)
Mortgage Lenders
HIP Providers (non Solicitors)
What should I do now?
Embrace the change! It will happen there is no getting away from it. Whether you are a mortgage broker or an estate agent start working now with a forward thinking Solicitor’s firm to ensure you are ready for the introduction of HIPs. It may not be wise to sign up to any binding service agreements as the regulations are still only in draft format, however, building a relationship now with your chosen provider will surely pay dividends in the summer of 2007!
For further information, please do not hesitate to contact Mr Jonathan Woodcraft, Business Development Manager, Lawcomm Solicitors Tel: 0870 2400 738 Fax: 0870 2400 739 E-mail: jonathan.woodcraft@lawcomm.co.uk
|
|
|
|
|
 |
