Home Information Packs aka HIPs
Published November 9th, 2006 in Manchester.Are Home Information Packs (HIPS) Necessary?
Once again, there have been relentless campaigns over the HIP (Home Information packs). HIP’S is designed to highlight possible discrepancies of a property. From a sellers point of view Hip’s can be seen as a costly and time consuming process, on the other hand in a buyers point of view, Hips is deemed necessary in order to for see the potential problems your chosen property may have. It has been revealed there will be a preliminarily trial of the Hip’s report, which will be undertaken in 6 major cities across the UK, and these are Southampton, Cambridge, Bath, Huddersfield, Newcastle and Northampton.
The hips report is designed to shift the emphasis of buyer to the seller in order to collect relevant information about the property. The initial aim was to cut down on unnecessary waste, save time and make the market more efficient- all this seems reasonable. However there have been numerous complaints from mortgage lenders and other professional bodies insisting that the reports would dissuade people from putting their houses on the market.
We at Rent A Home Manchester, just like yourselves like to save money, but with the HIP’s report expected to cost roughly £650, this is a hefty price to pay but to make money matters worse, the report has to be reassessed every 3-6 months. In case there are further problems which can be identified during the selling process, adding more costs to the current situation. This would save buyers millions, which they currently waste when sales fall through before contracts are even signed.
Rightly so, there are already many costs to selling a house, finding a good estate agent and solicitors is difficult as it is and not to mention costly, adding additional costs such as the HIP’s report will create higher demand and no supply of housing at all. This will no doubt cause higher property prices; in the short run interest rates will continue to rise rapidly in order to curb the increase in prices. The government has really over looked the issue. In most circumstances buyers would also insist on an independent survey themselves, therefore the report would be seen as pointless by sellers.
Even though, there are continuous problems with Hip’s one of many is the fact that there is currently a lack of experts or even signed on to relevant courses to conduct the Hip’s report. With all this in mind, the government expects the HIP’s report will become compulsory on the 1st June 2007. Sellers must be aware of these pricey demands before putting your house on the market!!!
The packs will include:
• Terms of sale
• Evidence of title
• Copies of planning, listed building or building regulations consents
• A local search
• Guarantees for any work on the property
• An energy performance certificate
source: http://news.bbc.co.uk/1/hi/england/4784923.stm
This article is seriously misleading in several respects.
There is & will be no such thing as a “HIPs report”
A Home Information Pack (HIP) will need to contain the legal information about the title, local authority searches (all already required to be obtained) & an energy performance certificate.
It can also contain a Home Condition Report (HCR) and other documents such as environmental searches & answers to the normal enquiries raised by a buyer. The HCR was to be mandatory but, due to concerns about there being enough qualified Home Inspectors as at 1 June 2007, this requirement was removed, though may be reinstated if the market led take up of HCRs is unsatisfactory for it to be a universally adopted part of the process.
The HIP, without a HCR, is very rarely likely to cost as much as £650, probably more like £400 in most cases & this is all money that would need to be spent if it were the buyer getting the information together, after they had agreed to buy. And which would be wasted if they are unable to proceed for any reason (such as the chain of sales collapsing). The HIP does not have to be updated or “reassessed” every 3-6 months. The only requirement at the moment is that lenders require local searches to be no more than 3 months old, nothing else. This may remain the case but in future, updating searches if they are older will become very easy & cheap through the electronic processes which will be available.
The concept of the HIP is plain common sense - when a transaction is usually part of a chain, it makes sense to remove as many pitfalls as possible from the process, by having the information up front. Far from being a deterrent to a seller, it should be seen as a valuable marketing tool the cost of which is saved on their related purchase & which may save them a vast amount of hassle & trauma, let alone possibly saving the whole chain from collapse. In the context of the overall costs of sale & purchase, the need to commit to this relatively small cost, which you pay anyway on your purchase at present, is almost irrelevant.