D-day for home information packs

Home Information Packs (Hips), paid for by house sellers, are to be introduced into England and Wales on 1 August.

The controversial packs contain title deeds, local searches and an energy performance certificate and typically cost £400-£700 to put together.

Initially, only properties with four or more bedrooms will have to have a Hip but the government plans to extend the scheme to all properties soon.

Critics argue Hips make house-selling more expensive and bureaucratic.

Scotland is set to get its own version of Hips in 2008.

Delay

Originally the government planned to introduce Hips for all houses put up for sale in England and Wales from 1 June.

However, the introduction was postponed by two months and the initial roll-out limited to properties with four or more bedrooms.

The government said Hips were delayed because there were too few qualified inspectors to produce energy performance certificates, a key component of the packs.

Industry groups and opposition political parties have been vehemently opposed to the introduction of Hips.

The Royal Institution of Chartered Surveyors (Rics), the Law Society, the National Association of Estate Agents and the Council of Mortgage Lenders have all called for Hips to be overhauled or scrapped entirely.

Critics’ objections to Hips include:

• There are too few inspectors to carry out the assessments necessary for issuing energy performance certificates
• Key information in the packs, such as local authority searches, will soon go out of date
• Some mortgage companies and legal bodies have said they may require the buyer to commission local searches to supplement those in the pack.

Rics said it was “committed to the implementation of energy performance certificates and improving the carbon footprint of homes across the UK.”

Nevertheless, the group added that there were “uncertainties in the legislation, and the number and geographical spread of energy inspectors across the UK”.

In response, the government has said that Hips will speed up the house selling process and give buyers key information about the energy efficiency of their properties.

“The home buying and selling process has not changed for a generation – consumers are currently getting a bad deal,” a Communities and Local Government spokesman said.

“Home Information Packs and energy certificates will cut nearly a million tonnes of carbon a year, lower family fuel bills by hundreds of pounds and help to reduce the millions of pounds wasted by consumers when buying and selling their homes,” he added.

And according to the Association of Home Information Pack Providers, the government has reached its target of having more than 2,000 accredited inspectors trained to produce energy performance certificates.

Penalties

The penalties for putting a property up for sale without a Hip can be severe.

Homeowners who have not commissioned a Hip by the time they put their house up for sale can face fines of up to £200 a day.

On Tuesday, the Office of Fair Trading (OFT) warned estate agents that if they failed to comply with Hip rules and sold properties without a pack, they could be put out of business.

“If an agent fails to comply, this could trigger an investigation into an agent’s fitness to continue estate agency work,” said Mike Haley, OFT Head of Consumer Protection.

The OFT’s stance has drawn fire from some estate agents.

“There is a lot of confusion out there amongst sellers and estate agents,” Trevor Kent, former head of the National Association of Estate Agents told BBC News.

“After all the delays, some agents genuinely do not think that Hips are going ahead… To go threatening to take people’s livelihoods off them is too much,” he added.

source:bbc.co.uk