Home Information Pack Regulations 2006 - An Introduction
On 1st June 2007, the government will enforce its new regulations relating to the requirement for property vendors to instruct the production of a Home Information Pack (HIPs) before publicly marketing their home. The aim of this scheme is to reduce the number of property deals that fall through at the last minute due to a latter stage realisation on the purchaser's side that the property or the deal itself is not as they first thought, which the government suggest would be remedied by the HIPs scheme.
Ruth Kelly, who has recently been appointed as the new Secretary of State for the Department of Communities and Local Government said:
"Home Information Packs will bring together all the information people need to buy and sell a home, to help them make informed decisions about what is probably the most expensive purchase of their lives. The packs will especially help first time buyers as they receive the packs for free."
According to the Home Information Packs Industry Website the purpose of the scheme is to make buying and selling property easier, they also claim that one million pounds per day is wasted in the UK property market through failed transactions, much of which could have been saved had the vendor and / or purchaser had the right information up front.
In essence the scheme sounds ideal, but it is not without skeptical critics who claim that the Home Information Packs will be an expensive requirement which will merely pave the way to increase the average cost of a property sale. The counter argument is that the need will be removed for the vendor of the property to incur the cost of a survey on their next property; however this does not aid the interests of a vendor who is not interested in purchasing another property, leading to a loss on that vendor's part.
Further criticism focuses on the lead time to having a HIP produced, some consider that it is likely that there will be a 2 week wait before a report can be delivered, due in part to a lack in supply of qualified Home Inspectors at the point at which the new legislation comes into force. The government claims however, that this issue is being readdressed and that currently property searches and surveys are not carried out much faster than the new reports will be, and hence reject that its introduction will lead to purchasers being beaten to the post by their competing prospective buyers.
The idea is that the new packs will merge some of what solicitors and surveyors currently do in the form of property searches and building surveys, namely the Home Buyer's Survey and Valuation (HSV), although the new Home Condition Report (HCR) will not provide a valuation). However there is genuine concern amongst property professionals who consider that property purchasers will not be happy entering into what is likely to be one of the most expensive transactions of their lives when the professionals collating the packs' contents will be instructed and paid for by the vendor.
The government are committed to ensuring the integrity of the Home Information Packs and the individuals involved in their preparation and as such have produced strict guidelines that must be followed in both the certification process of Home Inspectors as well as the business standards to which every Home Inspector must comply.
As well as tight business standards, there are also detailed technical standards which must be adhered to in the completion of a valid Home Condition Report (HCR). A registered Home Inspector will have to be thoroughly vetted to ensure that they have the right skills to carry out their role, and will also have to pass an assessment of competence at an authorised assessment centre. If required the potential home inspector will attend specific training courses designed to bring their skill set up to the required standards before being added to the register, and only then will they be allowed to produce the packs on behalf of the vendor.
All in all the scheme sounds like a proactive move, we shall however, have to wait to see the outcome of early stage results to make authoritative comment as the success of the scheme is heavily dependant on the training, assessment and certification of the new Home Inspectors who produce the HCRs, to ensure that we have the right professionals looking after the public's property interests. As well as skills, these professionals need to be of the highest integrity to win over the critics' fears of a vote of no confidence by the mass market of purchasers.
PF Stratford Ltd, property developers in Surrey, will comply fully with all directions enforced under the Home Information Pack Regulations 2006 and welcome proactive moves by the government to improve the clarity of the property market and shall always endeavor to instruct the most professional individuals to deliver Home Information Packs for our new-build property developments.
If you have any queries or concerns about this topic in relation to the acquisition of one of our Surrey properties, please do not hesitate to contact us.
