Home Information Packs

Category: Mortgages
Date: 8/13/2007

What are home information packs?

Every home put on the market with four or more bedrooms will need a Home Information Pack, which includes an Energy Performance Certificate.

What does a home information pack contain?

The home information pack contains the following compulsory documents:

• Home information pack index
• Energy performance certificate - details about the energy efficiency of the building and likely energy costs
• Sale statement - basic information about the property
• Evidence of title – up to date, official record of who owns the property
• Local authority searches
• Drainage and water searches
• Leasehold properties must contain documents relating to the lease

The home information pack can contain the following optional documents:

• Home condition report that contains information about the physical condition of a property
• Legal summary – useful, but doesn't remove the necessity of the buyers to seek their own legal advice
• Home use/contents forms – basic information on a range of matters relating to the property
• Other documents like non-standard searches and guarantees or warranties for work already carried out

What do you need to do?

The person responsible for marketing a property must have commissioned a Home Information Pack by the time that the property is on the market.

If you sell the property before you receive the Home Information Pack, you no longer have to provide a Pack. However, you still have a legal duty to provide the Energy Performance Certificate at exchange of contracts.

To commission a home information pack there are a number of options:

• Estate Agent
• Solicitor
• Specialist pack providers
• Compile it yourself

The home information pack will last for as long as the property is on the market. If the sale stops and then starts again you don't need to update the pack provided that the property is remarketed within one year of the date when you first put the property on the market; or within 28 days of the sale falling through.

How much do home information packs cost?

Estimates range from £300 to £500 for a typical family home.

Estate agents are likely to offer a home information pack service on the basis that the seller pays the fees when the sale completes. This might sound attractive, but you may end up paying more than you need to, so the message is to shop around and compare the quote from your estate agent.

The fine for not producing a pack is £200, but it remains to be seen how strictly Trading Standards enforce the fines.

What's all the fuss been about?

The Government has been accused of arrogantly ignoring the advice of property professionals. In May the Government announced that the launch of home information packs would be delayed until August and would only involve properties with four or more bedrooms initially.

This was following a legal challenge by the Royal Institution of Chartered Surveyors and criticism from the Council of Mortgage Lenders and other housing industry groups. They argued that there were not enough energy assessors in place to ensure a successful start to the new system.

The Government believes that the introduction of home information packs will reduce the number of property sales falling through. Critics of home information packs however, argue that they will introduce additional red tape and cost and slow the process down.

Green groups welcome the introduction of energy performance certificates as a means to reduce CO2 emissions from homes.

What are the problems with home information packs?

There are three major problems with home information packs:

• Home information packs don't have to include a structural survey, so buyers and lenders will still need to undertake this, and this is typically where most problems arise that cause sales to fall through.
• Lenders and solicitors may want to get their own local authority searches and valuations done, thus disregarding home information packs.
• There is no legal definition of what constitutes a four-bedroom property, meaning that properties could be marketed as a 3-bedroom house plus study/playroom etc, thus avoiding the requirement for a home information pack. Estate agents are unlikely to encourage this given that they will profit from selling the home information pack service.