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20 July 2008 11:25 BST

Get hip to HIPs

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Home Information Packs (HIPs) were introduced by the Government on the 1st August 2007 for all homes in England and Wales with four or more bedrooms. The reason for their introduction is to provide as much relevant information about a property as possible in the hope that it will prevent sales falling through due to unknown factors and to speed up the selling process. Eventually it is hoped that the scheme will be used for smaller homes too. Scotland is set to introduce its own version of HIPs in 2008.

The packs are made by solicitors, estate agents, and independent pack providers but the pack is paid for by whoever is selling the property and is supplied to the buyer for free. The packs can even be put together by the seller themselves.

The information included in the packs consists of compulsory documents and optional documents. Compulsory documents include title deeds, searches, a sale statement, and an Energy Performance Certificate. Optional documents include a Home Condition Report, a legal summary, forms listing which contents are included in the sale, copies of planning permissions, and listed building status. Up until the end of 2007 it will still be possible to sell a home without all of the compulsory documents.

Although many of the documents are standard in the sale of a property, the Energy Performance Certificate has been included to provide more detail on how energy efficient the building is and what can be done to improve it. This also complies with an E.U. directive due to come into force in 2009. Part of the reason the scheme has yet to be applied to smaller homes is that there are not enough qualified Energy Assessors at the current time for HIPs to be used in every house sale.

HIPs have been controversial ever since they were first suggested since they are regarded as just another stage in a process that is already long and convoluted. The additional cost (£100 – £150) of having the home’s energy performance rated has not been popular as it means the seller has to spend around £500 for the entire pack. The packs may also be superfluous as solicitors and the companies providing mortgages may well ask for more up-to-date searches. To approve many mortgages a survey, which is not included in the pack, is often required too.

Although HIPs have been seen by some as another hoop to jump through they should enable greater transparency when buying a house and, along with the essential mortgage calculator, should prove invaluable to first-time buyers who may be uncertain of the process of buying a house.

If you’re on the look out for a mortgage the most important thing is to find one that suites your needs and represents good value. With the home buying process becoming more and more convoluted it’s a worth saving yourself some time and hassle by consulting a mortgages comparison site such as fool.co.uk. I’d also recommend that prospective mortgage customers use a mortgage calculator such as the one found on the Alliance & Leicester site (you’ll find something similar on the websites of most major mortgage lenders or indeed this BBC calculator.) At the time of writing Newcastle Building society and A&L Mortgages appear to offer competitive deals. End of story

Associate Article

Get hip to HIPs

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