Under the new Housing Act from January 2007 homeowners will be required to have a Home Information Pack (HIP) when selling their home. A copy of this HIP must be made available to prospective buyers of your home.
Legislation is still being finalised on the HIP. At the moment it will need to include:
- Terms of sale
- Evidence of title
- Copies of any planning, listed building and building regulation consents and approvals
- Any guarantees for work carried out on the property
- Local search information
- For new properties, copies of warranties and guarantees
- A Home Condition Report
In addition for leasehold properties:
- A copy of the lease
- Most recent service charge accounts
- Building insurance policy details
- Regulations made by the Landlord/Management company
- Memorandum and Articles of Association
Home Condition Report
This is the biggest change and major item in the HIP. It is a mandatory report on the condition of the property and is carried out by a licensed Home Inspector (Surveyor). The report will detail any defects or problems with the property so that buyers and sellers are aware of its condition. Sellers will be able to supply quotes for any work required or may opt to get the work done themselves. Where they do they will need proof that the work has been completed.
Why the Home Information Pack?
Over the past seven years the Government has carried out extensive research into home buying and selling in England and Wales. It raised a number of quite shocking results (all England and Wales).
- The home buying process is the slowest in Europe, an average of 12 weeks.
- Each year there are 1.4million house transactions but only 20% of homebuyers commission a survey.
- The present system is fraught with delays and problems.
- 3 out of 10 transactions fail between offer acceptance and exchange – a cost of £350million each year in abortive costs and fees.
This evidence left Ministers in no doubt that more information is needed up front at the start of the sale. This benefits all the parties involved.
