The Government’s mission is that HIPs will provide reliable information at the beginning of the homebuying process to help prevent buyers and sellers being misled by incomplete or inaccurate information when they place an offer. Yvette Cooper, Housing Minister, said that the current system isn’t fair on buyers or sellers. “£1 million is wasted each day when sales fall through and too many buyers and sellers face real headaches when it turns out they were misled or that problems emerge when it’s too late,” said Cooper.

In addition to unveiling the detailed contents of Home Information Packs, which will become mandatory from June 2007, measures for consumers to take stronger redress against estate agents and others when things go wrong have also been announced recently by Government.

On the same day, Yvette Cooper and Consumer Affairs Minister, Ian McCartney, set out a three-way strategy to overhaul home buying in England and Wales, involving Home Information Packs, local searches, e-conveyancing and stronger redress against estate agents and others when things go wrong.

> Measures outlined will:

n give reliable information on the condition and energy efficiency of homes up front, to cut waste and duplication.

n speed up sales by making conveyancing and local searches cheaper and faster.

n provide simplified redress for consumer complaints against estate agents and other market providers and a single point of access for all complaints about the buying and selling process.

The aim is to encourage greater competition and transparency in home buying and selling, so that people know exactly what they are paying for. Buying and selling your home can be fraught with costs and delays, with £350m wasted by buyers and sellers each year when sales fall through. Under the current system home sales in England and Wales take longer than in almost every other European country and consumers are often left feeling baffled, misled and even ripped off in the process.

The Pack will include a Home Condition Report, terms of sale and any search details. An energy efficiency rating will be included in the report, giving consumers the choice to assess the likely running costs of a property before they buy.

Keith Gould, Director of Stratify, a supplier of HIPs, believes that the new law can be considered a quantum leap in the house buying process. Their introduction would, he said, speed up the process. For example, conveyancing solicitors will be able to act quicker on sales and purchases due to the majority of pertinent information being to hand on the very the day they receive instructions. Mortgage valuations will also be completed quicker as there will be less need to physically survey each property as most of the relevant information for the lender will be in the HIP.

> Yvette Cooper said:

"For too many people, buying or selling their home is still a real nightmare, with long delays and duplication. People should be entitled to proper information at the beginning of the process. This is about getting a better deal for the consumer."

> Consumer Affairs Minister, Ian McCartney said:

"Estate agents play a key role in the housing market. It is vital that people buying and selling property are adequately protected against rogue agents and unfair practices.

The Government’s newly published Home Information Pack regulations make clear that:

n Information on searches and surveys will be included in the pack so buyers won't end up paying several times for the same information;

n HIPs will include a Home Condition Report which sets out detailed information on the condition of the property. At present, 30 per cent of sales collapse under the current system, often at a late stage when terms have already been agreed;

n An Energy Performance Certificate will be included as part of the Home Condition Report which, just like a fridge rating, will show how energy efficient a property is and indicate its likely running costs as well as offer advice on how further savings can be made; The announcement of the EPC has been welcomed by environmental groups such as Friends of the Earth and the WWF.

n Most of the information contained in Home Information Packs, such as searches and title deeds, is already provided and paid for under the current system, but the HIP transfers costs from buyers to sellers, so first time buyers will be much better off.

Impact on leasehold properties

One of the foreseen difficulties with HIPs is that it will take longer to get a pack together on leasehold properties. To combat this, if obtaining leasehold documents is delayed by managing agents the property can be marketed after 14 days and the remainder of the documentation can be gathered after the property has been placed on the market. The Association of Home Information Pack Providers (AHIPP) has lobbied Government to reduce this to seven days, for leaseholder transactions where the managing agents are slow to provide information.

Despite the Ministers’ reassurances, the industry has aired several concerns regarding the introduction and impact of HIPs: that there will not be enough Home Inspectors; that HIPs will have a negative impact on transactions in the housing market; that there will be problems with valuations and that potential costs will be incurred because the pack won’t have a shelf life.

The spattering of criticisms surrounding HIPs are largely based on misunderstandings and false accusations, said Mike Ockenden, Director General of the Association of Home Information Pack Providers. “HIPs are being provided to consumers now and, when they become mandatory next year, will bring numerous benefits to both the buyer and the seller. As a whole the industry is prepared for HIPs and ready to meet the demands of roll-out this year and next.”

Home Inspectors

Alongside the regulations, the Housing Minister also published the

certification scheme standards establishing the strict requirements to be met by Home Inspectors who will complete the Home Condition Reports. Between 5,000 and 7,000 full time home inspectors will be needed to complete an estimated 1.44 million Home Condition Reports each year. Over 4,000 people have begun training to gain the Home Inspector qualification.

Groups lobbying against HIPs have suggested that Home Inspectors could be potential rogues. Gould believes that if Home Inspectors are carefully regulated and trained they could become a valuable mentor to help educate the vendor through the process and provide useful information, like where to find a Part P registered electrician, or how to gain access to a local authority grant for a new boiler. “It would be ignorant to say that there isn’t an opening for rogue Home Inspectors, but as long as there is a regulatory body ensuring a recognised code of conduct, home owners will hopefully identify the rogues.”

Only inspectors qualifying under certification schemes approved by the Secretary of State will be able to prepare Home Condition Reports. The scheme will be responsible for monitoring and auditing inspectors' work. This will be robust to ensure that standards are maintained and the reports can be trusted.

If inspectors fail to maintain the correct standard or act in a way that is partial to one party contrary to the rules of the scheme, their certification will be removed, along with that their ability to produce Home Condition Reports.

This will require high standards and proper indemnity insurance for Home Inspectors so that buyers, sellers and lenders can all rely on the report.

The certification schemes will also include independent redress against Home Inspectors when things go wrong. Estate agents will also have to join an approved redress scheme for their work on HIPs and the Government intends to go further and legislate in respect of all their work.

Ms Cooper welcomed the news of a proposed new awarding body for the

Home Inspector qualification so that more Home Inspectors can be trained.

 Dry Run

The Government has said that all aspects of the Packs need to be tried and tested through a dry run before becoming mandatory in June next year. The dry run has already begun, with some 40 to 50 organisations in the UK already providing more thtn 2,500 packs on a voluntary basis. AHIPP will be rolling out voluntary HIPs in the regions during 2006 and 2007.

Ms Cooper also announced that the Government will ensure there is full monitoring and assessment of this Autumn's dry run for HIPs in order to ensure lessons are learnt in time for the full implementation next year.

The dry run will look in particular at the speed and costs of producing HIPs, consumer attitudes to HIPs, and the impact on the wider homebuying process.

>Is the property industry ready?

A frequently voiced concern of HIPs is that those involved will not be ready in time for their introduction in one year. According to Ockenden, they will. “There are 4,000 registered future Home Inspectors in training and large surveying firms are also training up their surveyors to become certified Home Inspectors. We have over 40 members committed to providing packs. 70 % of agents have indicated that they will be distributing HIPs before June 1st next year.”

Stephen Nation of Spicerhaart, the largest network of independent agents in the UK, said, “I have no doubt that HIPs will become mandatory next year – those agents who are not ready will suffer.”

How much will it cost?

The cost of a HIP will depend on the size of the property; for example, a HIP for a one-bed apartment will not cost as much as a four bedroom house. It should also be pointed out that the vendors involved in a chain will in fact also be a purchaser and will benefit themselves from HIPs when they purchase their own property. There will be a cost, however, the overall benefit needs to be taken into account. “Maybe we should start thinking of HIPs as MOTs, said Gould. “After all, not many of us would buy a car – or could sell a car – without giving some evidence of its maintenance history.”

Estimates of the cost of the components of HIPs in the current market suggest an average of around £600-700 plus VAT. And competition is already affecting prices, with some providers saying they would offer reduced price HIPs and one provider proposing to offer them for free.

”The HIP should not be seen as another consumer or stealth tax, but as a stepping stone in the reform of the house buying process in England and Wales, which has not changed in the last 30 years,” said Gould.

Further Information

Department for Communities and

Local Government: 020 7944 3042.

AHIPP: 0777 555 0155; www.hipassociation.co.uk