Property Post International Article - Changes to Home Information Packs

The news story was published by Property Post who contacted me tor my comments on the changes to the Home Information Pack. Please see the full article below:

No more Home Information Packs?

In June 2007 it will become compulsory for anyone in England and Wales who decides to sell a house or flat to put together a home information pack, which will be given to prospective buyers. Since first announcing the packs, the government has made major changes to the rules about what they will contain. One of the most controversial elements, the home condition report, has been dropped, while energy ratings for the property have been introduced.

Commenting on the government’s change of policy on home information packs (HIPs), Paul Marsh, Law Society deputy vice president and spokesman on HIPs, says:
”This is a welcome decision. The Law Society has consistently opposed compulsory home condition reports (HCRs), on the grounds that they would disrupt the house buying process because buyers could not sensibly rely on a survey commissioned and paid for by the seller.

”The revised form of HIP without the mandatory HCR could bring real benefits for consumers. The Society has long advocated sellers preparing as much information as they can at an early stage so that the transaction can move quickly once a buyer is found. The revised form of HIP will build on the work the Society has done.

”The Law Society will continue to work constructively with the government in the lead up to the launch of HIPs and to help shape the scheme to ensure that it will operate in the interests of the public.”

Safaraz Ali, head of Birmingham based - easy4life loans and mortgages, said that the change had caused the Government to lose face, though he stressed that he always said that there would be a shortage of qualified inspectors to meet the initial deadline. He also added that there was “little benefit in transferring the expense of the legal searches from the buyer to the seller.” The

Association of Home Information Pack Providers (AHIPP) said that there would be consumer demand for the HCR since inspectors would still be needed to carry out compulsory energy performance checks.

The new changes will decrease the financial burden on homeowners who would have likely dished out anywhere between £600 to £1000 for HIPs under the previous plan. Without the inclusion of HCRs, the cost will be around £200-£300.

You will, however, still have to put together title deeds and local authority searches, in addition to the standard questions your potential buyers may have. You will also be required to provide Energy Performance Certificates (EPCs), which will need to be conducted by a Home Inspector, so you may want to consider including an HCR.

By providing such information upfront, you may save yourself valuable time. However, it is possible that potential buyers may want a second opinion to double check what you’ve done.

If fewer people are selling because of the change in the system, house prices could go up and you could make a tidy profit.

If you’re looking to purchase a home, HIP law may work to your benefit. Buyers will be required to provide you with certain documentation upfront, saving you time and money. Mandatory Energy Performance Certificates (EPCs) will let you know how energy efficient the home is and how any problems can be improved upon.

The Energy Saving Trust estimates that following the advice on an EPC could save the average homeowner up to £300 a year on fuel bills – a hefty packet and it’s good for the environment!

Unfortunately, with the change in law, you’ll still be stuck with the costs for HCRs, which could add up if you are looking at multiple properties. But remember that any sensible buyer will want to perform extra checks of their own anyway.

In addition, changes in property law and too few qualified Home Inspectors means that less people will be willing to sell, or could be waiting in line to get a certified person to provide an EPC. Fewer houses on the market may mean that house prices could go up.

The good news is that once people get used to the changes, market prices should stabilise and you’ll get more information from the seller upfront without having to hunt for it yourself.