Summary

From summer 2007 everyone putting their house on the market will have to provide a Home Information Pack. What are they and how much will they cost?

 

Mortgages. Why selling your home wont be as simple as putting a sign on your front lawn.

 

Author: Michael Challiner

 

Every year around 30% of agreed house sales fall through costing sellers £350 million each year. However, as of next summer, its the Governments hope that the introduction of Home Information Packs (HIP) will greatly decrease the numbers falling through and avoid much of these wasted costs. (mortgage deals)

So what exactly will go into this Pack?

The Government has yet to confirm the final details but at the moment, it proposes that your Pack must include the following information:

• Search results from H.M. Land Registry
• Replies to anticipated initial enquiries
• Copies of any planning, listed building and building regulations consents and approvals

And for new properties

• Copies of building warranties, electrical test certificates, and any other warranties or guarantees attaching to the property
• A draft sale contract

The Pack may also contain a professional independent survey of the property called a Home Condition Report.

This is expected to be mid-level survey like the current Homebuyer Survey and will offer far more information than a lenders valuation report – but the Government has yet to announce the details. (cheap life insurance)

However, it seems likely that the Report will have to comment on the propertys state of repair, its energy conservation efficiency, the number and type of rooms and parking arrangements. Both buyers and sellers will have a legal right to rely on this Report and therell be no need for buyers to obtain their own reports or surveys. 

We expect lenders to make their own valuations as they do now, but theyll want to maximise the use of the new Home Condition Report to improve their valuations and cut costs to consumers.

The Pack will also have to include replies to searches made of the Local Authority and, i n addition, if the property is leasehold, a copy of the lease, the most recent service charge accounts and receipts and details of the buildings insurance and receipts for the premiums paid.

Finally, any regulations made by the management company or landlord will also have to be included. These are all items currently held by the buyer.

And how much is all this going to cost? The Government believes that the Pack is likely to cost sellers around £825 including VAT. But they claim these are not additional costs and make the point that the HIP transfers responsibility for obtaining local searches and a home condition report from the buyer to the seller.

The Government also say that most sellers wont have to pay up front for the pack, which we doubt. (medical insurance)

Someone is going to have to pay and we doubt whether solicitors or estate agents will pay upfront on behalf of the seller. The seller is going to have to pay up as soon as the property is put up for sale.

Some commentators predict that this will act as a brake on properties coming to the market. We think that it will dissuade all but the committed sellers – those simply wanting to test the market will probably back off.

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