HIPS, one of the Government's great and considered inititives to help us all. Perhaps not, but who do they apply to, how much do they cost, what do they compose? Our guide aims to answer your questions.

The term ‘HIP’ has been banded around enough to become very familiar, however it is very apparent that very few homeowners are equally familiar with the content of a HIP, never mind the cost.

This uncertainty was little helped by the Government’s almost farcical introduction. The goal posts were moved again and again, both in terms of when the initiative became obligatory, for which type property and what the HIP included. One of the most significant turnarounds was the withdrawal of a survey, or Home Condition Report, as a required part of the HIP.

However it is now a requirement that all properties marketed since 14 December 2007 require a HIP (Home Information Pack). At the time of writing, the Government has not indicated whether it will extend this requirement to those properties already on the market prior to this date that did not already qualify for a HIP.

What does a HIP comprise?
There are several elements to a HIP, which can be divided into four main categories:

Sale Statement
This being a summary of the terms of the sale, including the address of the property for sale, the tenure and what’s included.

Searches
Obtained from the Local Authority, water board and drainage board.

Evidence of Title
Obtained from the Land Registry.

Energy Performance Certificate (EPC)
An assessment of the property’s energy efficiency and carbon consumption. This is undertaken by an assessor that will require a visit to the property.

If the property is leasehold, then a full copy of the lease is also required.

Who produces the HIP?

It is your estate agent’s responsibility to ensure that your property has a compliant HIP which is available for buyers to view. Different estate agents operate in different ways, some may produce the HIP in house, some use a HIP supplier and others use local assessors and solicitors. All of these methods should produce a HIP that meets the minimum requirements. However, it is worth considering both the cost and benefits of each method.

Coutts Byers has explored each of these options and found that, on a like-for-like basis, the costs for a fully compliant HIP vary little. However, there appears to be significant benefit in using a local solicitor that will continue to manage the conveyancing once a sale is agreed. Having produced the HIP, that solicitor will already hold the correct documentation relating to the sale thereby maintaining consistency and saving time.

Perhaps the overriding benefit is that, unlike large HIP suppliers that obtain cheap ‘personal searches’ from the Local Authority that are often NOT accepted by mortgage lenders, our solicitor acquires ‘full searches’ that are accepted by all lenders and recommended by the Law Society. Our view being that if we are expected to put together such a host of paperwork relevant to the sale, we should at least ensure that it is useful and sufficient for a buyer’s needs.

Does it delay marketing and how long does it take to produce?

Currently we are able to market a property immediately upon instruction, however we are required to have instructed the production of a HIP and have this available by exchange of contracts.

This period of grace lasts until 1 June 2008, at which point all properties will be required to have a fully compliant HIP available to buyers prior to marketing.

Producing a HIP is a relatively simple procedure, but one which requires application for, and receipt of documents from various authorities. Delays are common at times of demand, however, once a HIP supplier or solicitor is instructed, one should not expect the procedure to take more than a week. An EPC assessor will require access to the property in order to carry out an inspection. Coutts Byers retains several qualified assessors and can normally arrange an inspection between one to three days.

What is the cost?

The media originally speculated that HIPs were likely to cost between £600 and £1,000. Thankfully, and in no small part due to the withdrawal of the survey element, Coutts Byers is pleased to report that the actual cost is half of these early predictions.

The costs for providing the necessary searches and Land Registry information is published by the various authorities, and whilst small variations between authorities is not uncommon, it is not unreasonable to expect these to fall between £200 and £250.

The cost of the EPC is dependent upon the assessor and size of property, however the market rate is between £100 and £150.

Finally, one needs to consider the cost of compiling and producing the HIP. Again, this is dependent upon the supplier, however our solicitor will not charge for his time, providing you use him for the conveyancing.

If you would like more information regarding HIPs or require some advice, please contact Coutts Byers by telephoning 01227 456645 and one of our sales team will be pleased to help.