History of HIPS
The introduction of the Home Information Packs (HIPs) are part of the government's commitment to making it easier for people buying and selling homes in England and Wales.
The need for change has long been apparent: according to figures released by the Department for Communities and Local Government (CLG), 9 out of 10 consumers are dissatisfied with the current system of buying and selling. The government estimates that around 30% of property sales fall through each year at a cost of £350 million to consumers.
The governments plans have not been welcomed by all in the industry and they have been faced with opposition from major influences such as The Law Society and The Royal Institution of Chartered Surveyors (RICS). We have summarised the key dates in the history of the HIP to illustrate just how much the governments plans have changed.
December 1999 - Bristol pilot scheme launched
December 2000 - Legislation introduced into Homes Bill
March 2003 - CLG consultation paper launched
September 2006 - £4m funding for area trials
January 2007 - CLG consultation
December 1999
A pilot scheme to test the practical operation of the information
packs was launched in Bristol in December 1999 and ran until the
end of July 2000. Sellers were not charged for the production of
the HIPs, in a move to encourage the take-up.
The CLG said that “…the evidence from the Bristol pilot scheme shows that a sellers information pack can go a long way to helping deliver a more efficient and effective system of better information at a much earlier stage….There is clear evidence that by and large the pilot scheme in Bristol has generated clear and tangible benefits to the consumer. These include even greater certainty, fewer transaction threatening problems, and less likelihood of failure.”
December 2000
Legislation to introduce the pack was introduced in the Homes Bill
on 12 December 2000. That Bill was unable to complete its passage
before Parliament was dissolved for the 2001 General Election. Legislation
was reintroduced as part of the Housing Bill, which became an Act
in November 2004.
March 2003
In 2003 the CLG published a consultation paper setting out detailed
proposals for the contents of HIPs. Following enactment of the Housing
Bill, the HIP Component Project Board was set up to assist the Government
to review its proposals in the light of responses to the consultation
and to make recommendations on which documents and information should
be 'required' to be included in HIPs (that is, required to be included
in all cases) and which documents and information should be 'authorised'
for inclusion (this could be documents or information which will
not be available in all cases or is only important to home buyers'
and sellers' decisions in some cases - such as properties in particular
localities).
July 2006
In July 2006, the CLG announced that on the basis of consultations
and testing, the Energy Performance Certificates (EPCs) would be
prioritised and the HCR would be introduced on a market led basis
in the first instance to ensure smooth implementation.
Yvette Cooper said:
“HIPs can deliver great benefits for consumers and the
environment. But it is important that they are implemented in a
sensible way, based on proper testing.” Ministers wanted to
avoid a “big bang” introduction in June 2007 and they
wanted to ensure that further testing, including costs and the impact
of HCRs could take place without jeopardising the EPCs.
September 2006
In September 2006 the CLG pledged £4 million of funding to
support six area trials in Bath, Newcastle, Southampton, Northampton,
Huddersfield and Cambridge, the trials were launched in November
2006. In February 2007 Southwark, Gwynedd and Conwy & Anglesey
also joined the trials.
Sellers in these areas can use a Home Information pack, including
EPCs and on a voluntary basis.
The trials aim to help test both the packs and full HCRs. Independent
monitoring has been implemented to ensure lessons are learnt from
consumers’ experiences.
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January 2007
The CLG published a consultation on the 25 January 2007; please
see below a summary of the key revisions outlined in the document
(these have changed further to the announcement on 22 May 2007):
- Estate agents must include EPCs with their property particulars for the first time.
- To increase awareness of the benefits of undertaking environmental improvements, the EPC will be the first document in the pack.
- New guidance will be issued to local authorities on providing prompt access to all search information, speeding up the process and setting fair charges.
- For an initial period sellers will be able to market their home as soon as an EPC and key legal documents are provided as long as searches and leasehold documents (where relevant) have been commissioned and there is evidence that they will be available within 28 days.
- For those properties on the market before 1st June, the deadline for when they will need a HIP has been extended until 31st March 2008.
- Before the consultation, if a property was taken off the market for 28 days, a new HIP would have been required. Now a new HIP will only be required if the property is taken off the market for over a year after the original marketing date.
March 2007
On 2 March 2007 the CLG published a newsletter with the latest
information. The following key areas were addressed:
- The Ombudsman for Estate Agents announced that they will run a HIPs redress scheme; all estate agents selling homes will have to belong to an approved scheme, providing consumers access to free and independent redress.
- The “HIPs consultation: towards 1 June” closed at the beginning of March. They are considering all responses received and will be issuing their response later in March. (The final HIP regulations have now been published, please see below for further details).
- HIP adverts appeared in general national press towards the end of March, the campaign will run up to and beyond the 1 June.
- More than 18,000 HIPs have been reported in the national dry run, 60% of these HIPs have included a HCR.
May 2007
On 22 May 2007 the industry were left stunned once again after Ruth Kelly announced that the HIP regulations 2007 would be revised and the following changes would be implemented:
- HIPs and EPCs to start on August 1, implemented on a phased basis. From August 1 packs – including energy performance certificates – will be required for the sale of four bedroom properties and larger. We will phase in packs for smaller properties as sufficient energy assessors become ready to start work.
- Until the end of the year, we will allow people to market their properties as soon as they have commissioned a pack – rather than making them wait until they have received them.
- As a temporary measure, we will allow EPCs to be up to twelve months old when the property is put up for sale and will consult further on the long-term arrangements for the age of EPCs
- We will also be inviting councils and registered social landlords to work with us to introduce EPCs on a voluntary basis in social housing, for example at the time of stock transfers. Jordans will keep you informed of any further developments as they happen.
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