The market price for a Home Information Pack (HIP) will vary depending on a number of factors including the size, value and type of the property. The only new element in the HIP is the energy performance certificate which is likely to cost around £100. All other elements are currently paid for in the home buying and selling process. For the purposes of the revised RIA which will be published alongside revised regulations, we have estimated the cost of a HIP for be £370 plus VAT. However, we do expect competition in the market to drive down prices. Some providers have said they will offer HIPs on a no sale-no fee basis, and others have said they will offer HIPs for free.
We will be publishing findings from the independent research into the area trials as the trials progress. The research will show how many sellers chose to include the home condition report in the home information pack. The decision whether or not to include a home condition report rests with the seller and is not a matter for conveyancers. We will not know the value of transactions involving HIPs until the transactions complete, which in many cases will not be until much later in the year. This information will be provided in the final report expected at the end of this year.
Those responsible for marketing will be under a duty to make sure that home information packs comply with the Home Information Pack Regulations 2007. Local authority trading standards officers, who have considerable expertise at their command, will be responsible for enforcing the duties including the investigation of complaints that packs do not comply with the regulations. Enforcement authorities will have a range of enforcement options, including the service of a fixed penalty charge of £200.
The insurance standards, set out in the Standards for Certification Schemes, were drawn up after extensive research and consultation with stakeholders, including the surveying and insurance industries. The standards specify minimum terms for acceptable indemnity insurance which will ensure that consumers are protected while being commercially viable for insurers and home inspectors.
[holding answer 16 May 2007]: VAT is already payable on most elements of the Home Information Pack (HIP) in the current buying and selling process. The only new element of the pack is the Energy Performance Certificate which is required as a consequence of European legislation. The Energy Savings Trust has established that Energy Performance Certificates could save homeowners around £300 a year on their fuel bills.
Any additional costs imposed are expected to be broadly offset by savings, including savings made as a result of reductions both in the number of failed transactions and the amount wasted each time a transaction fails. As we expect that, overall, any additional costs will be broadly offset by cost savings we expect that the VAT impact of HIPs will be broadly neutral.
The concession agreement was awarded to Landmark Solutions, part of Landmark Information Group Ltd to operate the register of Home Condition Reports and Energy Performance Certificates for dwellings. Landmark operate this facility of behalf of Communities and Local Government by the way of a concession contract.
The value of the concession agreement is entirely dependant on the volume of home condition reports and energy performance certificates lodged in the register. A lodgement fee of £1.15 is paid by a certification scheme or accreditation scheme each time a home condition report or energy performance certificate is lodged in the register.
We intend to place a copy of the concession agreement in the Library once we have obtained agreement from Landmark and removed any commercially sensitive information.
Given that a number of estate agents are running promotional campaigns to get sellers to list properties early, it would be no surprise if the number of properties marketed for sale in advance of home information packs were affected. However, short term fluctuations in the volume of new listings are already a common feature of the housing market. Factors such as interest rates are likely to be a far more important determinant of the number of house sales.
The Home Information Pack regulations provide that the pack must include a copy of the lease where a leasehold property is marketed for sale. The lease will usually include a description of the property and a plan of its layout. The regulations provide that the lease can be an official copy of the lease obtained from the Land Registry, the original lease or an edited version of the lease if it is only available in that form. Where a potential buyer asks for a copy of the lease, this can be provided without breaching copyright law. As would be the case currently, sellers who wish to provide copies of other information that is subject to copyright restrictions should seek permission to reproduce the material.
An announced in the House on 22 May, Home Information Packs will be introduced from 1 August 2007 on a phased basis. The draft good practice guidance for local authorities and personal searchers ‘Delivering Property Searches’ was issued for consultation by the Department on 1 May 2007. The period to receive responses ends on 26 June 2007 and we intend to issue the final guidance shortly afterwards.