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SELL YOUR HOME QUICKLYHome Information Pack – How to sell your property without HIPs
The newly implemented Home Information Pack, covering only three- and four-bedroom houses since August, has moved into its next phase. This means that HIPs now cover both one- and two-bedroom houses.
Despite government’s defence that the Home Information Pack benefits first-time home buyers by supplying them with vital information about their new homes for free, it is a process that is cumbersome and costly.
At MPG Investments, we know that it is the seller who is pulling the shortest straw. That is why, when you sell your property to MPG, you’re not obliged to compile a Home Information Pack. Read on to find out more about the effect of HIPs on the property industry, and how you can steer clear of the unnecessary effort and expense when you sell your house.
How do you compile a Home Information Pack?
Sellers can hire estate agents, solicitors, separate pack providers, or take the time and do it themselves. The pack includes an Energy Performance Certificate (EPC) from an accredited Domestic Energy Assessor to be included, containing advice on how to cut carbon emissions and fuel bills.
The mandatory HIPs documents are:
- An index (ie a list of the contents of the HIP)
- A sale statement (summarising the terms of sale)
- Evidence of title
- Standard searches (ie local authority enquiries and a drainage and water search)
- An Energy Performance Certificate (EPC)
- Commonhold information (where appropriate)
- A copy of the lease (where appropriate)
If you are marketing your property, even if it's just by putting a 'for sale' sign in the window, you need a pack. Sales where no marketing takes place (e.g. to a member of the family) won't need one.
Home Information Packs ignored by buyers
When HIPs were first introduced, property experts warned that home owners looking for a quick house sale will be negatively affected. Now, to add insult to injury, it has come to light that the Home Information Packs are not even being used.
Estate agents across the UK have reported that the majority of buyers are not even looking at the packs, and that the HIPs are simply gathering dust. This is maddening for sellers who spend between £300 and £400 having the pack completed before their sale can go through.
The effect of HIPs on the seller’s market
According to The Royal Institution of Chartered Surveyors (RICS), a survey showed that there has been a 67 percent drop reported in the number of three-bedroom homes becoming available after HIPs were applied in September.
The National Association of Estate Agents verifies this, saying that while there is always a seasonal holiday slowdown in the market, there has been a marked reluctance from owners of four-bedroom properties to put their houses on the market. This is due to a concern that they will have to pay for a HIP if the property is withdrawn.
Another critic, the Royal Institution of Chartered Surveyors (RICS), agrees. “The RICS is compiling figures but anecdotally I’d say that there’s quite a dramatic decrease in the number of four-bedroom houses on the market compared to this time last year,” says spokesperson Jeremy Leaf. “Some of this is attributable to higher interest rates, but HIPs have had an effect.”