Home Information Packs

Anyone selling a property in England, regardless of how many bedrooms, must provide potential buyers with a Home Information Pack (HIP), also known as a 'seller's pack'.

A HIP is set of legal documents together with an Energy Performance Certificate that will provide you with important information you'll need to know about a property. Under Part 5 of the Housing Act 2004 it's the responsibility of the person responsible for marketing the property to ensure all relevant documents are ready to present to prospective buyers on request. It is understood that the packs will extend to smaller properties over time.

Buyers who want a survey will still need to obtain this. While original plans meant the seller would provide a Home Condition Report (equivalent to a Homebuyers Survey), that requirement was later withdrawn. The seller may now provide this voluntarily. Mortgage companies will carry out their own valuation survey, for which the buyer also has to pay.

Sellers can either obtain a pack through their solicitor, estate agent, or ask them to recommend someone who compiles HIPs. Alternatively, a search on the internet will reveal a number of suppliers that adhere to the HIP Code.

Compulsory documents inside the pack:

• Home Information Pack Index;
• Energy Performance Certificate (EPC);
• Sale statement (summarising terms of sale);
• Standard searches (or proof that these have been commissioned);
• Evidence of title;
• Copies of the lease and other documents relating to leasehold and commonhold properties should also be included where necessary.

Optional documents:

• Home Condition Report (HCR);
• Legal summary;
• Home use/contents forms;
• Information on flood risk and ground stability;
• Guarantees and warranties;

What's an Energy Performance Certificate?

This will tell you how energy efficient a home is on a scale of A-G, so if you're looking for cheap fuel bills and you want to embrace your eco-friendly side, the most efficient homes are in band A. If you're buying a new-build that has yet to be completed, the seller has to provide you with a predicted assessment of the efficiency of the property. When the house is completed, you should be offered a full EPC.

How much will a HIP cost and how long will it last?

Packs are likely to cost between £300 and £500 for a freehold property, and up to £1,000 for a leasehold property, so it's worth shopping around for a good deal. The EPC alone will cost from £150 to £200.

If you want to save money, you can put together your own pack. "The only thing you can't do yourself is the EPC as you'll need a qualified domestic energy assessor to do this," says Simon Lambert, Mortgages and Property Expert at Thisismoney.co.uk. "You can apply for the local area searches from your local authority and the title deeds from the Land Registry."

HIPs are valid for as long as the house takes to sell. If your house is taken off the market it must be put back on within one year for the pack to remain valid, otherwise you will need a new pack. The searches and copy title deeds must be no more than three months old at the point of marketing.

HIPs aim to:      

1. Give you a clearer picture of what you are buying;
2. Provide you with free information before having to commit to other expenses, such as a mortgage application fee;
3. If the Home Condition Report reveals problems with the house, it will allow sellers the opportunity to get quotations, or have work carried out - bear in mind the HCR isn't a compulsory part of the pack;  
4. Lower the number of sales that fall through between offer and exchange;
5. Make the buying/selling process quicker;
6. Reduce the level of carbon emissions that come from UK homes (currently 27%).

What are the downsides of HIPs?

1. For those selling leasehold properties, extra paperwork is needed that could push the cost of the HIP up to £1,000;
2. It's unlikely sellers will pay £300 to £500 for the HCR, especially when it could reveal defects in the home they are trying to sell;
3. The HIP isn't required to contain a legal summary to explain the legal documents to the buyer;
4. Sellers won't be allowed to put their property on the market until the HIP has been commissioned. If this isn't done, you could be fined up to £200;
5. There is little evidence that sales fall through because of legal, title or search problems, so it's argued that there's no need for the seller to provide this information before a sale is agreed;
6. HIPs could disadvantage the less well-off. Unlike many other moving expenses, the price of the HIP could remain constant regardless of the value of the house, so for those selling cheaper properties it might represent a bigger chunk of their costs.

* Click on the audio link at the top of the page to hear our interview with Simon Lambert, Mortgages and Property Expert at Thisismoney.co.uk.

HIPs exceptions:

• • Properties in Scotland and Northern Ireland. Scotland plans to introduce a similar scheme from 1 December 2008, but it will include the property survey and is known as the Single Survey Scheme;
• • Private sales where the property isn't offered on the open market (e.g. to family/friends);
• • Non-residential properties;

 

• • Properties sold with sitting tenants;
• • Unsafe properties and properties to be demolished.
• • Sales of portfolios of properties;
• • Right-to-buy and similar sales;
• • Mixed sales (e.g. shop with flat);
• • Seasonal and holiday accommodation.