The house-buying process will get easier and faster next year with the introduction of Home Information Packs - known as Hips. At least, that is what the Government hopes.

The packs become compulsory in England and Wales from June 2007 and require sellers to gather information about their homes before showing them to potential buyers. The Scottish Parliament is considering bringing in similar packs.

The English and Welsh packs will contain land registry and legal search information, plus a home condition report and an energy efficiency survey.

The aim is to speed transactions. But the National Association of Estate Agents is concerned that waiting for the pack to be produced, which could take from five to 14 days, could slow the sales process.

There is also a dilemma for anyone thinking of moving over the next 12 or so months. Will it pay to try to sell your home before June 2007? Or will buyers demand the information ahead of the deadline? At the moment, buyers pay for legal searches, property valuations and sometimes surveys. In future, sellers will foot more of these bills.

David Livesey, chief executive of national estate agency chain Sequence, says: 'Our best guess is that it will cost about £1,000, including VAT, for the full pack on an average home.'

Estate agents may charge for packs separately, or build the costs into their fees. Sellers will also be able to buy the packs from independent providers.

What you need to know about home information packs

Home information packs will not replace all valuations by lenders or structural surveys commissioned by buyers. Sue Anderson of the Council of Mortgage Lenders says: 'The packs will not contain any estimate of a home's value. Lenders are still legally required to show they are lending prudently, so they will still need valuations.' In time, the CML hopes that some of these can be done without a separate visit to the property, using the condition report and data on recent sales.

But Karen Babington, a director of conveyancing firm Easier2move, says: 'For bigger properties, I suspect many buyers will still want the comfort of a survey. The fees are modest beside the cost of a £500,000 home and the Stamp Duty on it.'

Will the switch to Hips distort the housing market? Livesey says: 'You could see a rush of property on to the market in early 2007, and that has the potential to distort. But you should see an end to speculative marketing, where sellers are really just testing the water.'

 

Copyright © 2005 First Mortgage Trust