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Home Buying Guide Contents

Making the offer / Negotiating the price Contents


Home Information Packs

 

What was the idea behind Home Information Packs?

Home Information Packs - What You Need To Know

Overview of HIPS and Conveyancing

The Sale Process - How It Works

Preparing Your Own HIP

Getting a quote for your HIP


What was the idea behind UK Home Information Packs?

This was the situation when the UK's Labour Govenrnement, elected in 1997, came to power:

The problem was the notoriously slow home selling process in England and Wales. (Scotland, like so many of the former colonies, seems to have slightly better people in charge who pass better ideas into better laws).

To cut a long story short, a lot of time and effort was being wasted. A quarter of home sales weren't competing.

This cost people money.

In order to progress a sale a potential buyer had to pay for a valuation and / or survey, get a mortgage in place and probably pay for legal work on the property sale.

Despite this commitment the seller was under no obligation to sell until right up to the last minute when contracts were exchanged. (See the process of buying a home).

Home sellers often changed their minds or, for whatever reason, things go wrong.

Perhaps the buyer was gazumped or there are problems with the home selling chain. (Read more about what can go wrong).

Because so many home buyers are involved in long and complex chains a failure at any point can mean knock-on misery for all involved.

 

The Solution

Tony Blair came to power in 1997 promising many changes. One of them was to tackle this problem.

The idea was to put the onus onto the homeseller to get together the information on their property and show it to potential buyers in a "Home Seller's Pack".

In this way, for example, ten prospective buyers would not need to get 10 surveys done.

It would also show real commitment by the sellers and so avoid time wasting "let's see if anyone offers anything then let's change our minds anyway" attitudes.

To read a background view from that time and why legislation was thought necessary have a look at this article from the Guardian.

 

The rest of this page covers the sordid history of the initiative as it passed the legislative phases through Parliament.. To cut to the current situation go here

Home Information Packs - What You Need To Know


What happened next

Following pressure from the opposition Conservative party and a petition signed by 130 MPs in early July 2006, a significant part of the proposed content of the Home Information Pack, the Home Condition Report was scrapped.

The Home Condition Report was the major part of the whole plan that was going to replace the need for buyers to pay for a survey. (It would have been paid for by the seller rather than the buyer).

The official reason given was that mortgage lenders were not going to recognise Home Condition Reports as a substitute for a survey, which meant they were effectively useless.

Great news for the professional surveyors and Estate Agencies. Bad news for innocent home buyers

Worries that it might interfere with the property market was also seen as a concern from ministers with the housing minister, Yvette Cooper, stating that she didn’t want a ‘big bang’ effect on the housing market.

The Home Condition Report was at the heart of the Home Sellers Pack and without it, it seemed a waste of time and money from both the buyers and sellers point of view.

Around that time the name of the initiative was subtly changed to Home Information Pack.

So what was the point in having a Home Information Pack without the survey part?

The government continued to insist it would all still be compulsory from June 2007.

The Home Information Pack would now include:

  • A sale statement with the address of the property, who is selling it, and information on whether or not it is being sold with vacant possession.


  • Copies of title documents or deeds - proving ownership by the seller - plus replies to standard council property searches such as planning permissions, road schemes, water and drainage.


  • Warranties and guarantees for any building work.



  • Property Use Forms (with details of neighbour or boundary disputes and work carried out) and Contents Forms (fixtures and fittings) were still a grey area.



  • An Energy Performance Certificate (EPC), required under an EU directive, which gives A-G ratings on the home and practical measures to cut fuel bills and carbon emissions.


Not willing to let Home Condition Reports die completely the government said that the Home Condition Report would be left to market forces and that estate agents and lenders will be encouraged to use them, but only voluntarily.

The key here was a fatal combination in New Labour's belief in the market always being a force for the good and the PR spin available to ministers to hide behind the green fig leaf of the Energy Performance Certificate.

This part of the HSC was widely welcomed by the green lobby. It seemed like a good idea given concerns over global warming and the fact that a quarter of the UK's carbon emissions - seen as the main culprit of global warming - come from residences.

However to anyone familiar with a government so pre occuppied with image over reality, and style over substance, it was seen as a cynical move to hide the failure to deliver on the HIP's original aims.

A shabby launch

As the June 07 launch date of Home Information Packs approached there were severe criticisms of the effect it would have on the housing market. It seems that ministers started to believe tales of a housing market crash which would lead to a general economic downturn. This was not a consensus opinion but was mentioned often in the media - particularly the Daily Mail, apparently the main driver of Tony Blair's policies.

In addition it became clear that there would not be enough Energy Performance Certificate inspectors available by the launch.

The government denied it strongly but weren't believed as this type of basic error was fairly typical of a government which has overseen some of the most shambolic mismanagement imaginable.

Examples? OK How about these: Despite spending billions on "management consultants" and improved pay, the National Health Service remains a mess. Ask anyone who's been in hospital recently. Hopefully they survived the MRSA;

the Home Office is declared "not fit for purpose" by the Home Secretary. To help them sort themselves out it is split in two at sudden notice to an incredibly optimistic six week timescale;

and finally five times more is now spent on subsidising the appalling private railways than was spent on British Rail... that's enough examples for now. Sadly there are many more.

Anyway back to our gripping story; the wings started to come the whole initiative when the latest minister in charge, the luckless communities secretary, Ruth Kelly, was forced to postpone the launch of the Home Information Packs a mere eight days before D Day.

She blamed the estate agents and other vested interests who had issued a legal challenge and admitted, surprise surprise that "barely 500 of 2,000 energy assessors needed were available"

It would instead start on the 1st of August 2007, but only for houses with more than 4 bedrooms. Other size homes would follow later.

 

To read more on this subject please see the list below or your mortgage guide or your home buying guide

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How to Make the Offer 

About Conveyancing / The Legal Stuff

Costs of Buying a Home

HOME BUYER TIPS

First Time Buyers Special Guide

Latest Best Buy Mortgages

 

Read On / Mortgage Guide

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How to Get a Mortgage in the UK

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About Mortgages in Principle

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Mortgages TIPS

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A - Z all UK Mortgage Types

 

Read On / Related Topics

Guide to UK Home and Mortgage Insurance

Life Insurance Guide

Glossary of UK Mortgage Terms

Mortgage News

 

 

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