From 14 December 2007, properties marketed
for sale in England and Wales will need a Home Information
Pack (HIP), which includes a home energy rating. The
Pack includes an Energy Performance Certificate, containing
advice on how to cut carbon emissions and fuel bills.
Also included are documents such as a sale statement,
searches and evidence of title.
Currently,
any property that was already on the market on the relevant
commencement date (i.e. 1 August 2007 for sales of homes
with four or more bedrooms; 10 September 2007 for those
with three or more bedrooms and 14 December for all properties)
does not need to have a HIP. At this stage no such date
has been set when all properties that are on the market
will be required to have a HIP.
Why haven't you announced a Drop Dead Date (DDD)?
Properties put on the market before the commencement dates
will not need to produce a HIP. A date may be set when
all properties that remain on the market will be required
to have a HIP.
What has been announced?
The final phase of the roll-out to properties with two
bedrooms or fewer from 14 December 2007
Publication in December of guidance on access to search
data and a consultation paper on local authority charging
aiming to speed up searches and deliver a fairer deal for
consumers.
An extension of the temporary First Day Marketing provisions
for an additional 5 months to allow for full flexibility
(from 1 January to 1 June 2008).
The laying of an order to temporarily amend the HIP Regulations
until 1 June 2008. During this time the required leasehold
information will only be a copy of the Lease. The other
leasehold documents that are currently required will become
authorised during this period.
We have commissioned Ted Beardsall, Deputy Chief Executive
of the Land Registry - and member of our Home Buying and
Selling Stakeholder Panel - to advise on what else can
be done to improve the search process and the provision
of leasehold information.
Why did you extend the exemption on first day marketing?
We have extended to ensure smooth implementation as well
as because of a later than expected commencement of Home
Information Packs and in response to delays in the production
of guidance to local authorities dealing with access to
and charging for search information.
Will the leasehold changes be retrospective?
Yes. The current rules will continue to apply until 14
December but from this date existing packs and packs in
preparation will only be required to include a copy of
the lease. The Home Information Pack Index on the CLG website
will be amended to reflect the change.
What will happen to packs already completed?
If existing packs contain leasehold information which is
not mandatory under the updated regulations, those sellers
will benefit from having more information about the property
available for potential buyers thus making their homes
easier to sell.
Why have you decided to roll out now?
As we made clear, we planned to roll out to other sized
properties having taken into account the number of assessors
and how HIPs are operating in the market ensuring a smooth
implementation in the housing market. However we also had
a duty to consumers to ensure the carefully managed, smooth
implementation of the packs, which is why we looked carefully
at how they are operating in the housing market.
The government also commissioned and considered extensive
analysis by Europe Economics on the impact of HIPs on the
market. It finds no evidence of any impact on transactions
or prices, although there is a predicted short term impact
on new listings as sellers change the timings of their
listings. It concludes that the impact on listings is short
lived, and the impact on the market is marginal compared
to the wider factors.
TThe final stage of the roll out follows careful consideration
of how HIPs and EPCs have been working in order to maintain
their smooth introduction into the housing market. Now,
as from 14 December DEAs will be able to carry out EPCs
for all properties.
What about sales of new homes?
Sales of new homes built to the most recent Building Regulations
(Regulation 17C, Part L, 2006) are currently exempt from
the need to have a HIP. The current intention is to bring
these properties within the scope of the HIP scheme on
6 April 2008 - the date on which EPCs will be required
on construction for all dwellings.
WWhat documents are actually required to be included in
the HIP?
HIPs will include the Index, EPC, sale statement, evidence
of title, searches and, where appropriate, a copy of the
lease or commonhold information.
These documents bring information up front in the home
buying and selling process reducing the risk of problems
emerging later on that cause wasted money, time and energy
This will allow less time for additional problems to emerge
and will reduce the number of sales which fall through
and in turn reduce the number of chains which collapse.
What's happening with authorised leasehold documents?
It is standard conveyancing practice for the seller to
provide leasehold information once a sale has been agreed
but before completion.
The temporary provision described above will allow this
practice to continue and is intended to protect owners
of leasehold properties from facing additional and unreasonable
costs at the beginning of the sale process, while additional
evidence is collected into the extent of this problem.
Transactions involving leasehold properties are often held
up by delays in obtaining leasehold information. Providing
this information upfront in a HIP is intended to eliminate
these delays and also help reduce the number of transactions
that fall through because of problems associated with leasehold
information coming to light at a late stage.
We are not removing the leasehold documents from the pack;
instead, the government has decided to allow the provision
of leasehold documents to be determined by the market.
This provides consumers with choice, encourages competition
and helps to drive down prices. The government is also
engaging with stakeholders in an ongoing process, and taking
account of the views of these stakeholders in making its
decisions.
Will this now mean more work for DEAs?
Rolling out HIPs to the rest of the market will bring immediate
benefits for DEAs, as from 14 December DEAs will be able
to carry out EPCs for all properties (1&2 bedrooms
homes will now require them) In addition, from April 2008
EPCs on newly built homes will be rolled out. From then
we will also start to introduce commercial EPCs on the
sale, rent or construction of a huge range of premises.
HIPS
NEWS
For the latest Hips News or any other FAQ's on HIPS
please click on the articles below:
Full roll out of HIPs announced 22 November: Ministerial Statement by Yvette Cooper:
All homes marketed for sale from 14 December 2007 in
England and Wales will need a Home Information Pack.
