Home Information Packs (HIPs) will be good for consumers and will cut costs and waste, Yvette Cooper, Housing Minister said today, as the Government published draft regulations for consultation of the contents of the new packs.
Home Information Packs, which are being introduced by the Government, will help first time buyers and aim to cut the overall costs of buying and selling a home.
At the moment more than a quarter of all sales fall through after an offer has been accepted, nearly half because of the problems which emerge when surveys or valuation are carried out.
One million pounds a day is wasted on failed transactions as buyers often spend hundreds of pounds on valuations, legal advice and searches for homes that ultimately fall through. By providing the same information at the beginning of the process Home Information Packs will prevent waste and significantly cut the number of sales that fall through.
Home Information Packs do not increase costs for people buying and selling an average home. In fact the estimated total costs for buyers and sellers for an individual purchase are expected to be around the same or cheaper than at present, with some early costs switching from buyer to seller. HIPs will also make it easier for first time buyers who face pressures on affordability as well as making the process more transparent.
The packs will provide consumers with much more information up-front and have been strongly campaigned for and welcomed by consumer groups.
Yvette Cooper said. "Buying a home is stressful enough without losing hundreds of pounds on legal fees or valuations for properties that then fall through.
"It is crazy that over £1m a day is wasted like this. Home Information Packs will actually save money and cut waste in buying and selling homes, that’s why consumer groups have been campaigning for this for so long".
The Government is publishing today the draft regulations, which set out the detail of Home Information Packs for consultation, exactly as provided for in the Housing Act.
The general content and cost of the pack remain the same as discussed in Parliament during the course of the bill. Most of the information in the pack already has to be provided under current arrangements, but this is often very late in the process.
The contents include:
- A sale statement - describing the property being sold
- Forms the seller can use to give more information about the property and fixtures and fittings
- Evidence of title – from the Land Registry or copies of the deeds to the property
- Replies to standard searches – such as planning permissions, road schemes, water and drainage
- Warranties and guarantees – for building work
- A Home Condition Report including how energy efficient the property is.
For leaseholders, the pack will also include:
- The lease
- Details of the landlord or managing company
-Regulations made by the landlord or management company
- Details of service charges and recent requests for payments for ground rent and insurance
- Information about current and planned works.
The packs will include Home Condition Reports (HCR) similar to condition surveys currently carried out. Only inspectors qualifying under a certification scheme approved by the Secretary of State will be able to prepare HCRs. The scheme will be responsible for monitoring and auditing inspectors work. This will be robust to ensure that standards are maintained. The HCR will be an objective report on the condition of the property that buyers, sellers and lenders will have a legal right to rely on. Home inspectors will need to have suitable insurance that will ensure consumers are properly protected.
