In 31 days HIPs will change the way we buy & sell homes but a House of Lords committee has described the opposition to the introduction of HIPs (Home Information Packs) as "striking" and "widespread".
In case you didn't know, from 1 June 2007, if you are marketing a property, you will be legally required to prepare a HIP and make it available to any potential buyers of your property!
The introduction of HIPS is designed to address some key issues:
- Consumer dissatisfaction (nearly 9 out of 10 consumers are dissatisfied with the present process)
- Lack of transparency (at present, key information about the property only becomes available after terms of the sale have been agreed)
- High transaction failure rate (28% of property sales fail after terms have been agreed)
- High costs of failed transactions for consumers (over £350m lost a year)
- Slow transaction process (twice the European average)
- Uncertainty (60% of property sales are in chains. Delay or failure in one has a knock-on effect through the chain)
- First time buyers (will receive HIPs for 'free', making it easier and less expensive for them to get their foot on the property ladder.)
So what's in a HIP?An Energy Performance Certificate which tells you how energy efficient the property is and other compulsory documents, such as an index of contents, a sale statement, searches and evidence of title. There are also optional documents, such as the Home Condition Report (which is exactly what is says it is!)
For sellers, providing a Pack upfront should reduce the likelihood of any nasty surprises in the selling process that could delay the sale, as buyers will be able to make more informed decisions about purchasing their home.
For buyers, the Pack provides essential information about properties they are considering buying, free of charge.
However, estate agents and legal bodies have told the government that they have not had enough time to prepare for HIPs!
The House of Lords Committee said the government must take this criticism "seriously" and that the Committee had "rarely seen such widespread opposition to proposals".
Chief amongst the criticism raised by housing industry and legal bodies is that there are too few qualified people to assess property for their energy performance. Critics argue this could lead to delays in producing HIPs. In addition, it has been argued that the packs are of very little use to homebuyers.
So are HIPs a valuable source of info for buying and selling a home, or just a big fat waste of time that makes the whole process even more taxing?