HIP

What is a Home Information Pack and why do you have to have one?

The government introduced the Home Information Pack (HIP) on the 1 August 2007 and it is now a mandatory process in the marketing of residential property.  It was designed to both speed up the housing market and to protect buyers from sellers who were not really interested in selling but just wanted to test the market.

In the past when a prospective buyer wanted to put in an offer, his or her solicitor would start the process by opening an account for the buyer, take a sum of money from the buyer and use some of it to instruct a number of searches.  These would include Title Information and Local Authority Searches for Planning history, Land Charges etc that related to the property.  If the seller then decided to withdraw the property from the market, the buyer had wasted money.   

This was unfair and contributed to slowing down the conveyancing process.  If you take the analogy of purchasing a car, you would not consider buying a car without the dealership providing all the information to you, and letting you take it for a test drive.  You cannot test drive a house but you could reasonably expect information about the property provided free of charge by the seller. 

The HIP is the government’s attempt to make the information available at the outset to all prospective buyers.  Furthermore, the fact that a seller has to provide a HIP discourages people who put their property on the market without any real intention of selling.

The seller does not lose out in so much as the majority of people are selling to move and therefore looking to buy another property.  As they become the buyer, the seller provides the HIP on their property, and they are getting the information free, no matter how many properties they view.

Apart from the Energy Performance and some form filling, there is nothing new in a HIP.  So, what is an Energy Performance Certificate and why do I need one?

The European Union recognised that all member nations were using significant energy resources.  The Union cannot produce sufficient energy itself and therefore has to import supplies.  This is costly, inefficient and potentially dangerous should those supplies not be available.  Therefore, they introduced legislation to identify energy consumption with the further aim of reducing it through greater efficiency.  This affects both residential and commercial property.

In the UK, evidence indicated that almost half of the energy consumption was in the residential sector and therefore as part of the process of providing prospective buyers with information at the outset through the HIP, the government introduced the Energy Performance Certificate (EPC). 

The certificate identifies the current usage and recommends the potential savings in the short, medium and long term.  This information allows prospective buyer or tenant to identify the energy costs associated with the property and is included as a mandatory component within a HIP.

The HIP contains a lot of useful information to the prospective buyer and as the process beds in the HIP has the potential to become the real shop window for seller and will develop greater awareness for the buyer.