By Wyn Williams, conveyancing
specialist at Harding Evans Solicitors
The current property market is something of a war zone! Whether it
be the rise in interest rates, the Northern Rock saga, or sub prime
lenders not being able to lend as a result of the American money
market meltdown, the industry is certainly feeling the effects. In
addition we have also seen the introduction of Home Information
Packs or HIPS as they are more commonly referred to.
As from the 14th December 2007 any property must show that they have
applied for a Home Information pack (HIP) before being marketed.
Originally introduced on the 1st August 2007 for properties with 4
bedrooms or more, the scheme was also introduced to 3 bedroom
properties from the 10th September 2007. If your property has been
on the market before any of these dates then you will not currently
require a HIP as long as the property has been continuously
marketed. However this is subject to change and it seems that it
will not be long until all properties will require a HIP, even if
they have been marketed before the legislation was introduced.
Our experience of HIPS has highlighted a number of advantages. As
the pack will contain a local authority search and drainage search,
gone are the days of delay during a transaction, as the purchaser
will already be in receipt of the relevant searches. The searches
are acceptable to the majority of lenders and this should speed the
process up for both the buyer and the seller. Costs for the
purchaser are also reduced, as they will not have to pay for their
local or drainage search, as they will be contained within the HIP.
The majority of documents, which are normally provided by the
vendor’s solicitor when selling the property, are also ready to be
viewed at an earlier stage by potential purchasers.
The energy performance certificate contained in the pack is
effectively the same certificate, which you would normally associate
with a domestic appliance such as a fridge, freezer or oven. It will
give the property an energy rating based on bands from A – G, with A
being the most energy efficient. It will contain recommendations as
to improvements to the property, which will improve the overall
rating. The government is actively introducing new schemes offering
grants to property owners to improve energy efficiency and reduce
carbon emissions.
However as with everything that is new there are always glitches!
The pack does not contain all information that is normally required
during the course of a property transaction and your legal adviser
will need to carry out further investigation of the property and its
various documents.
Whilst most HIPS are priced at a similar level they are not produced
to the same quality and standard. Estate agents will often display
and promote the quality of their sales literature and how your
property will be showcased, but this has not been the case with
HIPS. We have encountered a wide differential in the quality
produced since inception. A HIP which is professionally presented is
more likely to impress a potential purchaser and will improve the
properties marketability.
Choosing your HIP provider should entail the same degree of care as
choosing your estate agent and conveyancer. Be wary of companies and
estate agents who will insist that if they prepare the HIP, the
customer is bound to instruct their nominated solicitors to carry
out the conveyancing work. Convenience normally comes at a premium
price and is not always the best option. Ask to see the quality of
some of the HIPS produced for other properties and whether the
solicitors are specialists in conveyancing.
Also be wary of the free HIP offer. The HIP is not free but the cost
of it may be swallowed by the higher margin quoted in the estate
agents or conveyancers fee which normally contains a premium to
cover the delay and added risk. The cost therefore may well be
significantly more than paying up front.
