Partner Article

Government boost to home buyers and sellers

With Watson Burton LLP Law FirmOne of the most significant and most talked about changes to the home buying process that the Labour government has made some coming to power in 1997 is the introduction of the Home Information Pack (HIP). In its unveiling of the HIP regulations 14 June 2006, the government outlined its intention to transform the way in which homes are bought and sold in England and Wales by boosting consumer rights and benefits. The basic concept is that no seller of a residential property will be able to market the property for sale, or use an estate agent to do so, unless a set of documents and information is produced and made available to a prospective buyer. This will mean a complete overhaul of the existing system by forcing the seller to carry out searches and enquiries etc. which would have traditionally been carried out by the buyer. The Department for Communities and Local Government (DCLG) on 14 June announced its three-way strategy to transform existing conveyancing procedures. This strategy included measures intended to:1. give reliable information on the condition and energy efficiency of homes to prospective buyers;2. speed up sales by making conveyancing and local searches cheaper and faster; and3. provide redress for consumer complaints against estate agents and other market providers and a single point of access for all complaints about the process of buying and selling homes.The HIP regulations make it clear that the packs will include:1. information on searches and surveys so that information will only need to be obtained once rather than by several buyers as is often the case now;2. a Home Condition Report (HCR) outlining the condition of the property and which will be produced by Home Inspectors who must be qualified under an approved certification scheme. The scheme will monitor the inspectors and provide a means of redress when things go wrong; and3. an Energy Performance Certificate (EPC) which will form part of the HCR. This will show how energy efficient the property is and will provide information about the property’s carbon emissions. The EPC will also indicate how much it is likely to cost to run the property.The DCLG predict that it will cost on average £600-£700 plus VAT to produce the HIP. Much of the information contained in the pack is already provided and paid for under the current system, however, the HIP shifts the cost of providing this information from the buyer to the seller. The HIP ensures that information is available at the very outset of the home buying process enabling buyers to make a more informed decision as to whether to proceed with the transaction before significant costs are incurred. The DCLG hope that this will in turn save the estimated £1m that are wasted every day when transactions fall through. HIPs will be compulsory from 1 June 2007.If you have any questions on this issue or any other property related issue, please contact Kelly Jordan at Watson Burton LLP.

This was posted in Bdaily's Members' News section by Ruth Mitchell .