Introduction to Home Information Packs
The provision of Home Information Packs (HIPs) became a mandatory requirement for anyone putting a home up for sale from 1st August 2007.
Home information packs were incorporated into the new Housing Act 2004, whereby homeowners or their appointed selling agents now have a statutory duty to have Home Information Packs available for potential buyers at the time of putting their property up for sale.
What is the Purpose of Home Information Packs (HIPs)
The Government introduced home information packs in order to reduce the increasing number of failed home sales. Under previous legislation, much of the information required by the buyer was only available after the offer to purchase had been completed. This meant that any problems regarding the condition of the property or legitimacy of any documents provided, was not revealed until actual costs had already been incurred. Often this led to the need to completely renegotiate the terms of the sale, lengthy delays in the contract exchange process and the eventual failure of many transactions.
It was estimated that previously around £1000,000 a day was being lost on these types of transactions, which subsequently failed.
It was therefore deemed necessary to reduce the enormous amount of money and resources wasted on the failure of so many potential home purchases, including expenses predominantly incurred by the intended buyer on excessive legal fees, searches and disruptions to mortgages, which subsequently led to eventual withdrawal from the transaction when unsatisfactory factors were revealed. In providing this essential information at the outset of the selling process, the Government’s intention was to accelerate the whole procedure of house purchase by reducing waste in time and financial resources and to thereby drastically cut the number of failed home sales.
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