Introduction to Home Information Packs (HIPS)
From 1st August 2007 Home Information Packs are mandatory when selling your property. These packs will include Energy Performance Certificates, searches and other legal documents. Reforming the home buying and selling process to provide consumers with a better deal is long overdue. Home Information Packs, together with reforms to conveyancing, local authority searches and consumer redress, are at the heart of these changes.
Under the new Housing Act 2004 homeowners or their selling agents must provide a Home Information Pack to potential buyers at the time of marketing their home for sale. Home Information Packs will create a more efficient and cost effective market where costs are shared more fairly between buyer and seller.
Why are Home Information Packs being introduced
Under the present home-buying process, a lot of the information needed by a buyer only becomes available after an offer has been accepted. This means that any problems with the property may only come to light, once buyers and sellers have incurred costs. This can then cause the terms to be re-negotiated, delays in the exchange of contracts, and even result in transactions failing altogether.
Currently, one million pounds a day is wasted on failed transactions and buyers often spend hundreds of pounds on valuations, legal advice and searches on transactions that ultimately break down. By providing key information at the beginning of the process, Home Information Packs will speed up the process, prevent waste and significantly cut the number of sales that fall through.
From 1st August 2007, it is compulsory for sellers to make a Home Information Pack available to a potential buyer that contains information they need about the property. It will include information such as terms of sale, title deeds, local searches, warranties, and an Energy Performance Certificates.