Mortgages HIP, HIP, Hooray – or is it?
Author: Dot Piper
From June 2007, homeowners wishing to put their house on the market will be obliged to provide a “sellers’ pack”. In theory this pack will give full information on every aspect of the house and the reasoning behind this new requirement was that it was intended to speed and improve the selling process.
Things may not be so simple, however, and now that more comprehensive details of the scheme have been released, they seem to indicate that there are some points which are not covered.
The packs must contain:
A description of the property being sold, in the form of a Sale Statement.
Copies of the property deeds, or evidence of title from the Land Registry.
Standard searches regarding planning permissions and services such as water and drainage and any road schemes.
Guarantees and warranties for any building work carried out on the property.
Energy efficiency ratings.
In order to give more information on fixtures and fittings included in the sale, forms will be provided which the seller has to complete.
All the above seem to be fair and reasonable. The new energy efficient ratings don’t create any problems. They are simply an explanation of what standard the current insulation values etc., are and they give a buyer the chance to evaluate what can be done to improve the situation, if necessary.
It’s what the packs don’t contain which may create problems
There’s no requirement for reports on ground stability, natural subsidence or effects of mining in the area. They don’t take account of the possibility of contamination from any substances, including radon gas, or the risk of flooding. There’s no information on rights of access or details of telecommunications links.
The cost of the sellers’ pack is claimed by the government to be around £776 for the average semi-detached house, but it is thought by the experts that £1000 is the more likely figure. There is talk of a fine of £200 per day if an owner offers a property for sale without a HIP. This applies even if you market the property on a private web site.
There’s a sell-by date too. It is believed that mortgage lenders will not advance buyers the money to complete the purchase if the report is more than three months old. The up-dated regulations suggest that if you remove your house from the market for over 28 days and then decide to put it on sale again, you will need to pay for a whole new pack.
A spokesman for the Communities and Local Government Department made the statement that the 28 day rules would not affect people taking their homes off the market whilst a sale was being negotiated. If this sale subsequently fell through and the pack was more than three months old then the whole thing would have to start again with a fresh HIP and another £1000 or so.
This, then, is the up to date position on HIP’s. The question seems to be -Is it the answer to all the property markets’ problems or just another stealth tax?
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