19:41Government plans for a shake up of the conveyancing system in England and Wales took a step forward with the announcement on 16th March of the timetable for implementation of the Home Information Pack scheme.
From 1st June 2007, it will be illegal to put a residential property on the market without having a Home Information Pack (HIP) ready to give to prospective buyers. You could be breaking this law just by putting up a home made For sale sign to test the market. Or in the case of an estate agent just by letting someone know that a property might be coming up for sale even if it is not yet being advertised.
The HIP must include up to date search results and a home condition report. At the moment the buyer arranges the searches and chooses whether to have a survey. So this should be good news for buyers who will get all this information free of charge in future but less good news for sellers who will have to pay to provide it. It is estimated that the cost of an HIP will be at least £600 to £1000 and in the case of large or unusual properties a lot more than that.
In most cases sellers will get their HIP done on credit to be repaid from the sale proceeds. The sting in the tail will come for those who, for whatever reason, do not finalise a sale. They will have to pay back the £1,000 or so with interest. If they later put the property back on the market they will probably have to buy a new HIP as the old one is likely to be out of date.
The totally new feature in the HIP system is the Home Condition Report. It is not the same as existing survey reports and it will not include a valuation. Special officials called Home Inspectors are being trained to do them. It is estimated that a small army of 7,500 will be needed, but doubtful whether enough will be trained in time for the June 2007 deadline. Would-be sellers may need to search around for a HIP provider with guaranteed access to elusive inspectors.
The report will cover a range of aspects and give a numerical score for the condition of each. This is likely to be a scale of 1 to 3. Sellers of category 1 homes will be delighted, category 2 a little less so. Those with category 3 reports may have limited options: cut the asking price, do some repairs and pay for another report or sue the Home Inspector.
If they do the property up and get a new report they will still have to show the duff report to prospective buyers as well. Just to make sure there is no cheating about that, the Government will be keeping a database of all the Home Condition Reports ever done. Our ever inquisitive government has always known where you live. Soon it will know the colour and condition of your wallpaper too.