114x114_fitbox-hip_brick1.jpegMedia coverage over the summer lead many to believe that the government's plans to overhaul the home buying and selling market with the introduction of Home Information Packs (HIPs) in June next year, has been abandoned.  However, nothing could be further from the truth and the scheme, designed to provide home buyers with more information about a prospective property is still very much on track, writes Peter Ambrose. 

For property investors, HIPs will prove an extremely useful tool when investigating potential property purchases.  Today, investors and buyers spend a great deal of time, effort and expense obtaining all the legal documentation required for a property.  Many investors may also commission a survey to try and identify expensive problems and factor these into the purchase price.  However, from June next year, before a property can be marketed, a HIP must be compiled which includes all the legal information that a buyer traditionally has to pay for, an energy performance certificate which rates the property's energy efficiency and an optional survey called a Home Condition Report.

For sellers of investment property, a HIP must be made available before the property is marketed, unless an estate agent is used, who would then be responsible.  Marketing is defined very broadly and extends to merely putting an advertisement in a local shop window to providing full details on a website.  There are some exceptions, for example, if the property is sold with a sitting tenant or if it is for mixed commercial and residential use, when a HIP is not required.

One of the key elements of a HIP is the Energy Performance Certificate, which, under European legislation must be produced for every property sold or rented after January 2009.  These are produced by qualified Domestic Energy Assessors, who will need to inspect the property and calculate the energy ratings.  For a typical property this will take about an hour and is likely to cost about £100. 

Given that HIPs represent such a major change to the house buying and selling process, trials are well underway.  The Dry Run as it is known, started late last year and the second phase is imminent.  Over the next week, trials are being launched in major towns across the country; Bath, Cambridge, Huddersfield, Northampton, Newcastle and Southampton where vendors can take advantage of free and subsidised HIPs to test public reaction to their use, and in particular, the interest in Home Condition Reports.

The introduction of Home Information Packs will provide investors with valuable information in advance, helping them to reduce the risks involved and accelerating the overall buying process.

Peter Ambrose is a director of The Partnership an independent Home Information Pack provider.  pambrose@thepartnershiplimited.com