Home Information Packs will be introduced in the UK from 1 June 2007. You may have read about them, but what exactly will they mean for property purchasers and sellers? Let's take a look at the implications...
The government has introduced this latest measure to enable purchasers to be more informed about a property as early as possible and also to speed up the process as some of the legal work will have been carried out in advance.
The reality is that 9 out of 10 people say they're dissatisfied with the current process. Currently, one in four transactions collapse before contracts are exchanged and one million pounds a day is wasted, mainly due to transactions failing at a late stage.
The Home Information Pack is a set of documents providing important information about a property such as searches, copies of the deeds and information regarding its energy efficiency.
At present, much of this essential information only comes to light when an offer has been made and accepted. In the meantime, buyers are negotiating in the dark and are often wasting money on legal fees and searches. Providing this information up front, at the time of marketing a property, will make the home buying and selling process more efficient and transparent.
The required documents are:
- Home Information Pack index
- Energy Performance Certificate
- Sale Statement
- Evidence of Title
- Local and Drainage & Water Searches
- Additional Information for Leasehold and Commonhold Sales, where appropriate.
The authorised documents include:
- Home Condition Report-
Home Use/Contents Forms
- Legal Summary
- Other Searches
Sellers can use authorised documents to top up their Packs to include additional material judged to be of interest to prospective buyers.
The benefits Home Information Packs bring to consumers are:
- Improving the process of buying and selling by reducing the number of transaction failures and reducing the time taken between offer and acceptance
- Improving the condition and sustainability of the housing stock by making a positive contribution to the energy efficiency, condition and sustainability of the housing stock. Home buyers and sellers can be sure of the true condition of the property
- A step on the ladder for new generations of home owners through more affordable entry costs and simpler process for first time buyers
- Training for the qualification in Home Inspection for those wishing to add the qualification to their existing portfolio, and for those looking to train in a completely new career
Although the Government will make Home Condition Reports voluntary from 1 June 2007, it strongly believes that they're likely to prove valuable to both sellers and buyers and is working with the industry to ensure that there is active take up.
Full details of where you get your packs from are yet to be announced.
More information is available at: http://www.homeinformationpacks.gov.uk/home.aspx
The Financial Tips Bottom LineWhether or not this new process will be successful remains to be seen.
Will it really help buyers and sellers?Who knows!As with most things, we suggest you monitor what is happening in practice (once the hype has died down) and do your research before deciding which HIP provider to use.
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