home information packs

the FSP guide to HIPs

PDF version

Introduction

Since Wednesday 1st August 2007 the new HIPs regulations have applied to the marketing of residential properties consisting of four or more bedrooms. From 10th September 2007 the regulations were applied to the marketing of three bedroom homes. From 14th December 2007 all properties put on the market will require a HIP. These regulations affect freehold and leasehold properties although they do not apply to new houses built in accordance with Part L of the Building Regulations 2006. The government claims that home information packs (or HIPs as they are generally called) will speed up the home selling process by making important information available to potential buyers from the moment the property is put on the market. The idea is that a buyer will not need to spend time and money obtaining this information at a later stage in the transaction.

The introduction of HIPs has been, to put it mildly, somewhat shambolic. The government’s original intention was to make home information packs compulsory for all residential properties from 1st June. The planned start date was delayed as a result of concerns on the part of the government and property industry that there would not be enough accredited inspectors to produce the energy performance certificates which are a compulsory element of HIPs. These concerns led to a number of important transitional arrangements being included in the HIPs regulations. We have already mentioned the phased introduction of HIPs (applying first to properties with four bedrooms or more and then being rolled out to include smaller properties as more energy inspectors became accredited). Another important temporary measure is that it will be permissible to put a property on the market before 31st May 2008 without a HIP provided that the component parts of the HIP have been commissioned by the estate agent (or the seller where he/she is selling privately) prior to the property being put on the market.

What’s in a HIP?

The government’s original idea was that a HIP would contain a comprehensive range of information about a property so that an interested buyer would know exactly what he was getting (problems and all) before making an offer. The pack was to include a home condition report (a survey commissioned by the seller) together with an information sheet and fixtures and fittings list completed by the seller. Strong opposition to these proposals led to the government dropping a number of items from compulsory inclusion in the HIP (including home condition reports) and we are now left with a pack which only has to include the following:

• an index

• a “sale statement” (giving very basic information about the property being sold)

• an energy performance certificate (giving ratings for the energy efficiency of the property)

• details of the legal title to the property

• a local search

• a water and drainage search

Additionally, if the property is leasehold, the pack must contain a copy of the lease together with other prescribed leasehold information. We can give you further details about this if you are selling a flat.

How HIPs will affect you

If your property consists of four of more bedrooms and was already on the market before 1st August 2007 you will not need a HIP. If marketing commences on or after that date it will be necessary for the HIP documents (energy performance certificate, searches and title details) to be ordered before any marketing activity can start.

If your property consists of three bedrooms and was already on the market before 10th September 2007 you will not need a HIP. If marketing commences on or after that date it will be necessary for the HIP documents (energy performance certificate, searches and title details) to be ordered before any marketing activity can start.

If your property consists of one or two bedrooms and was already on the market before 14th December 2007 you will not need a HIP. If marketing commences on or after that date it will be necessary for the HIP documents (energy performance certificate, searches and title details) to be ordered before any marketing activity can start.

How Field Seymour Parkes can help you with the HIP

The government has acknowledged that the average price for a HIP is between £300 and £350. That is money which will need to be paid by the seller before the property can be put on the market. A number of commercial organisations have sprung up offering to prepare the HIP for you. These “HIPs providers” are in the business of selling HIPs just like any other product or service. It is likely that these organisations will be charging you for their HIPs. Whether the HIP fee is paid up-front or deferred until completion, it is an additional cost which you will end up paying for one way or another.

At Field Seymour Parkes we take a different approach to HIPs. We regard the preparation of the HIP as part of our overall conveyancing service and we do not make any additional charge for the work done in preparing the HIP. We will even pay the up-front disbursements for the searches and title details and you will not need to reimburse these costs until completion of your sale. In conjunction with your estate agent, we will ensure that the HIP is completed quickly and efficiently so that your property can go on the market without delay. The HIP will be assembled in electronic and paper format and made available to your estate agent as the “responsible person” under the HIPs regulations. You will have the peace of mind of knowing that your HIP has been put together by legal experts with access to the latest electronic search tools ensuring accurate and speedy applications for the component parts of the HIP.

Key points of the Field Seymour Parkes HIPs service

• We will work in partnership with your estate agent to ensure that the HIP for your property is prepared quickly and accurately.

• Field Seymour Parkes will pay up-front for the local search, drainage search and title details for your property and you will not need to reimburse these costs until completion. In some instances you may find that the estate agent will reimburse these costs on your behalf.

• We will not make any charge for our time in preparing the HIP. There will be no administration charge or other hidden charges. Only the disbursements will be refunded to this firm and then only on completion. Our only requirement is that we are instructed to act for you in the sale of the property.

• This partnership between FSP and the estate agent is likely to offer the cheapest HIPs solution on the market. There will be no administration charges, no payment for the preparation of the HIP and no financing costs.

• You and your estate agent will be able to visit the HIPs section of our website to download documents and obtain further information about HIPs.

Our recommendations if you are selling your property

The requirement to put together a HIP before you can market your property is a significant hurdle in the selling process. We would strongly advise you to contact us as soon as possible once you have decided to sell. The sooner we receive your instructions to prepare a HIP the sooner the property can be put on the market. If you are in touch with the estate agents before you contact us, we would suggest that you inform the agents that we can provide the HIP and that we do not charge for this service. We will be happy to discuss the provision of the HIP with your estate agent and we can send them the necessary form (in PDF format by email) for you to fill in at their office.

If you require any further information on HIPs or on the service which Field Seymour Parkes can offer you please contact a member of our residential property team on 0118 951 6200. This leaflet is intended as a general guide to our HIPs service. Full details of this service are set out in our HIP Instruction Form, copies of which are available on request.