As the date for the introduction of the Home Information Packs draws closer, Michael Higgs, a property specialist from leading law firm Higgs & Sons looks at the latest developments in HIPs and the increasing debate about their effectiveness
From the 1st June 2007 almost all residential properties in the UK will require a Home Information Pack (HIP) when they are put on the market.
The idea was first introduced in 1997 as a means of speeding up the house buying process. However there is increasing concern as to whether this will be achieved - or indeed whether HIPs will be introduced at all.
"In theory a buyer should be in a better position to make an informed offer for the property with the introduction of HIPs," comments Michael Higgs, a solicitor in Higgs & Sons Residential Property department. "However many in the industry have expressed doubts about the effectiveness of the new system and whether HIPs will speed the conveyancing process," he adds.
HIPs will include documents required by buyers as part of the purchasing process. These include, evidence of title, a local search, drainage search and an energy performance certificate. The purpose of the energy performance certificate is to detail the effective carbon footprint of the house.
"Homeowners looking to sell their property will have to pay for a HIP. It is envisaged it will cost around £600, a cost which cannot be passed onto the buyer who will be able to see the HIP prior to making an offer," continues Michael Higgs.
But after nine years and input from six government ministers, many feel the constant revisions and concerns expressed by estate agents, lenders and others in the housing market, have left a question mark over the credibility of HIPS . The requirement for a home condition survey to be included, for example, has already been dropped from the proposals following pressure from mortgage companies and estate agents.
One of the issues surrounding the packs is the longevity of searches contained in them with some solicitors expressing reluctance at having to accept a search that is five or possibly six months old.
Despite the current reservations however, plans remain to introduce HIPS nationwide from 1st June and, according to Michael Higgs, sellers need to plan ahead:
"Anyone thinking of selling their house should put the property on the market before the 1st June as a HIP will not be required in those circumstances - unless the property is still on the market on the 31st December 2007.
"As the current plan is for HIPS to be introduced from 1st June this year, Higgs & Sons has joined up with the Law Society and a respected national organisation to provide packs for our clients.
"It is our aim to be able to compile and provide HIPS within five to ten working days of receipt of instructions so that the any delay in marketing the property is kept to a minimum. In addition, it is envisaged that a financing option will be available at a 0 per cent interest rate so that the cost of the pack is settled from the sale proceeds on completion of the sale," concludes Michael Higgs
The introduction of the HIP is said to be the most significant change in residential conveyancing for more than 80 years. For further information, please contact, Michael Higgs or David Morgan on 01384 342100.
ENDS
Further information
Mark Hand
Connect PR
01902 714957
markh@connect-goup.com
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