What is in the HIP?
The required documents are:
- An index (i.e. a list of the contents of the Pack)
- An Energy Performance Certificate
- A sale statement (summarising terms of sale)
- Evidence of title
- Standard searches (i.e. local authority enquiries and a drainage and water search)
- Where appropriate, commonhold information (including a copy of the commonhold community statement)
- Where appropriate, leasehold information (including a copy of the lease, information on service charges and insurance)
- Where appropriate, a New Homes Warranty
- Where appropriate, a report on a home that is not physically complete
The authorised documents include:
- Home Condition Report
- Guarantees and warranties
- Other searches
An authorised document means that sellers can use them to top up their Packs voluntarily to include additional material where they judge that to be of interest to prospective buyers.
Although the Government has indicated it will make Home Condition Reports voluntary, it strongly believes that these are likely to prove valuable to both sellers and buyers, and is working with the industry to ensure that there is active take up.
Energy Efficiency Certificate - Going Green!
The newest element of the HIP is the Energy Performance Certificates. These are energy ratings for homes similar to consumer-friendly 'fridge ratings' which already exist on fridges and other ‘white goods’, such as dishwashers and tumble-dryers.
An Energy Performance Certificate will not only outline the costs of heating, hot water and lighting in homes, but will also give practical advice to potential buyers on how to cut these costs and reduce emissions.
Its is estimated that if just one fifth of homeowners made the basic changes set out in their Energy Performance Certificate they could cut carbon emissions by the equivalent of taking 100,000 cars off the roads – not to mention make a combined saving of around £100 million a year on their energy bills. In fact, the Energy Savings Trust estimates that by following the proposals in the Energy Performance Certificate, the average homeowner could save £300 a year on fuel bills.
In Good Condition
Although currently an authorised element of the Home Information Pack, by adding a Home Condition Report to the Pack, home-owners could dramatically speed up the sale of their home.
The Home Condition Report will provide sellers with a competitive advantage and make their own property stand out from the rest of the market.
The Home Condition Report (HCR) acts as a ‘health check’ for your home and it is similar to a surveyor’s report – which many buyers already get, but only after they put an offer in.
A HCR is an objective report on the condition of the property that buyers, sellers and lenders will have a legal right to rely on. The Home Condition Report will be completed by a qualified, certificated Home Inspector who will carry out an on-site assessment. Sellers, buyers and lenders will all be able to rely on it as it classifies all the main elements of the property, roof, walls, foundations etc….. into ratings, 1 ,2, 3. These correspond to Good condition, In need of repair and Serious Defect which makes the report clear and concise yet sufficiently detailed.
By providing this Report upfront, it will not only give sellers a competitive advantage and make their own property stand out from the rest of the market, it will also ensure buyers have the confidence to commit to the property the minute an offer is put in – something they are unable to do if they still have to wait for a survey to be completed.
This means that the time taken for a sale to be completed could be reduced, as all of the legal searches will already be in the Pack and the Report will ensure nasty surprises which could threaten the sale later are avoided. And this could save consumers money.