About Home Information Packs
As from 1 June 2007, homeowners will be required to provide a Home Information Pack when marketing their homes for sale throughout England and Wales. This will help reduce the estimated £1 million which is wasted each day because of failed transactions. The Pack will include a Home Condition Report, terms of sale and any search details. An energy effiency rating will be included in the report, giving consumers the choice to assess the likely running costs of a property before they buy.
1. Consumer Benefits:
- Provide transaction improvements by reducing the abortive costs to consumers and the industry attributable to failures caused by survey or valuation inspection findings.
- Improve the condition of the housing stock by reducting the incidence of unexpected repair bills and encouraging better maintenance of homes.
- Provide greater consumer choice by reducing the entry costs to first time buyers and creating a market of serious sellers.
2. Cost of Home Information Packs:
- The Packs will cost around £600 plus VAT. Most of this cost is not new being met at present by sellers and buyers. The Home Condition Report is the new item and is expected to cost around £300, for an average home, plus VAT. It is similar to the homebuyer survey that some purchasers already commission.
- The proposed content of the pack includes searches and other information which is currently paid for by the buyer. Where several buyers pursue the same property, then these costs are repeated by each buyer. Under the new arrangements all prospective buyers will be able to access this information up front as supplied by the seller.
3. Market Impact:
Home Information Packs will make the market more efficient and certain. They will make home buying more affordable and sustainable for first time buyers, who will receive full details abiout the property at no cost to them.
Major players are now investing heavily in Home Information Pack systems and intend to market these well in advance of packs becoming mandatory. This means sellers and buyers will not have to wait until June 2007 before they can benefit from packs immediately before implementation of the mandatory scheme in June.
Industry accepts that sellers will generally not pay up front for Home Information Packs. Thus there is no impediment to sellers marketing their homes with the Packs both before and after implementation.
4. Home Inspectors/Certification Scheme:
Only inspectors qualifying under certification schemes approved by the Secretary of State will be able to prepare Home Condition Reports. The scheme will be responsible for monitoring and auditing inspectors’ work. This will be robust to ensure that standards are maintained and the reports can be trusted.
If inspectors fail to maintain the correct standard or act in a way that is partial to one party contrary to the rules of the scheme, their certification will be removed, along with that their ability to produce Home Condition Reports.
5. Home Condition Report:
The Home Condition Report will be an objective report on the condition of the property that buyers, sellers and lenders will have a legal right to rely on. Home Inspectors will have to have suitable insurance that will be backed up by insurance of last resort provided by the certification scheme.
6. Integrated Government Policy Benefits:
Home Information Packs support the Government’s wider reform agenda, including raising the energy efficiency of the housing stock, and improving its state of repair. as well as contributing to sustainable home ownership and communities.
7.Timeline
A timeline for the introduction was published on 16th March 2006 - for full details please visit www.homeinformationpacks.gov.uk
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