Home Information Packs: Time for change?

Kate O'Raghallaigh takes a look at the latest developments for Home Information Packs

This week, the Department for Communities and Local Government (DCLG) announced a new set of measures designed to ensure that homebuyers and sellers get the most out of Home Information Packs (HIPs), as well as getting a higher standard of service when buying or selling a property.

HIPs were initially introduced for properties with four or more bedrooms back in August 2007, and are now compulsory for all properties. Designed to speed up the buying and selling process, as well as contribute to building awareness of energy efficiency, the packs are legally required to contain official documents providing evidence of title, details of local search results, a sale statement and an index listing the pack’s contents. All packs must also contain an Energy Performance Certificate (EPC), which details the property’s energy efficiency. According to DCLG, 700,000 more homes in the UK now have an energy rating as a result of HIPs, meaning that homeowners are better placed to monitor their carbon output and could potentially save money on their utility bills.

However, Katie Tucker, technical manager at mortgage brokerage John Charcol, believes that, even with an EPC, the packs don’t contain enough information to justify the cost to the consumer. “Even though the EPC is seen as being the most useful or looked-at document, a good energy efficiency rating is not going to be the deal breaker for most people when it comes to making the decision about whether to buy or not,” she explains. “At the moment, people pay hundreds of pounds for a HIP, and they don’t get that much out of it. The information they contain needs to be expanded.”  

Room for improvement

DCLG’s most recent proposals for improvements to the packs include developing a new set of standards with the property industry on what consumers should expect from property professionals in the homebuying and selling process; improving the quality of information currently in the packs and extending the first day marketing provisions until the end of 2008. These provisions allow homeowners to put their home on the market without a completed HIP, as long as a pack has been commissioned.

Housing Minister Caroline Flint maintains that HIPs have had a positive effect on the housing market. She explains: “HIPs are already bringing benefits to consumers. Property search costs are falling and new information on energy efficiency can help cut carbon emissions and enable prospective purchasers to get a better idea of the likely costs of energy bills.”

Not everyone is as positive about HIPs, however. For example, the Home Condition Report (HCR) – a document that details the physical condition of a property – was initially proposed as a compulsory document in the pack, but was later made optional. Many industry figures feel this was a mistake and that buyers would benefit from the document being included.

Paul Broadhead, deputy director general of AHIPP, says: “I am disappointed that yet again there is no mention of HCRs, and I would urge the Government to confirm that mandatory HCRs do indeed remain on the table.” Broadhead continues: “It is clear that Caroline Flint is committed to making the HIP process work to provide a better experience for the consumer. An extension to the transitional arrangements [about first day marketing] until the end of the year makes sense.”

So, although some commentators believe that, in their current form, the packs are of little use, many seem to support a commitment from the Government to make changes to the packs – as long as they are for the better. Peter Bolton-King, chief executive of the National Association of Estate Agents (NAEA), says: “We have always maintained that in their present state, HIPs are of little use to either sellers or buyers. Over the last few months, the NAEA has been in discussion with Caroline Flint about the direction of HIPs, the content and what the next steps taken should be. The announcement clearly shows that there is a move to talk about how to improve HIPs.

“While I’m disappointed that agents have the prolonged pain of having to wait until December to find out the fate of first day marketing, I welcome the move by the Minister to work with property professionals like the NAEA to take another look at the content of HIPs in order to make them much more effective.”

The future

But will any of the proposed improvements actually make a difference? Flint argues that the changes will ensure buyers and sellers get the most out of HIPs. “Developing a new set of standards for industry is an important next step in further ensuring all consumers get the highest quality of service when buying or selling a home. We also want to ensure all consumers are seeing the vital information in a HIP early in the process so they can fully benefit,” she says.

Although the NAEA’s stance is currently somewhat negative, Bolton-King believes that any changes made to the packs in the future must have more of a tangible effect on the buying and selling process. “After all, that was the original intention of this legislation,” he says. “If this cannot be achieved we continue to maintain that HIPs should be scrapped.”

So, the debate carries on. Whether or not the proposed improvements generate a more positive attitude towards HIPs – or have any effect on the buying and selling process – the fact remains that the packs are now a legal requirement. HIPs are here to stay for the time being, so homebuyers should take advantage of receiving all this important information upfront and sellers need to ensure their pack is correctly compiled in order to show the best side of their home.