I’m selling, do I really need a HIP?

As of the 6th April 2009 your property cannot be marketed until a Home Information Pack (HIP) is in place. The aim is to make the home buying and selling process easier and more transparent for consumers offering more information that should incur less wasted costs and delays.

For consumers, selling and buying property is a difficult process and one which is felt is made more so by the government’s introduction of Home Information Packs (HIPs) which puts more regulations – and penalties – on sellers than ever before. HIPs are an extension of the legal process of selling your home and it is important that you are looked after by professionals who understand all the requirements.

If, as a private seller, you market your home without a HIP, there is a £200 penalty.

Ask yourself these simple questions to find out if you need one before marketing your property:

• Is the property used or intended to be used as a residence?
• Is the property in England and Wales?
• Is the property to be sold without any tenant of the whole property?

If you answered NO to any of these questions, you do not need a HIP

If you answered YES to all of these questions answer the following:

Was your property put on the market before the relevant commencement date;actively marketed in the run up to the relevant commencement date and intended to be sold before the relevant commencement date? (See underneath for dates)

The relevant commencement dates are:

• 1 August 2007 for four or more bedrooms;
• 10 September 2007 for three or more bedrooms; and
• 14 December 2007 fro all other residential properties.

If you answered YES to ALL of these questions you do not need a HIP

If you answered NO to any of these questions answer the following:

Are you selling:

• non-residential property that is, and will continue after sale to be, used for non-residential purposes?
• Land ancillary to a dwelling house?
• A holiday home that you are not allowed to live in all year round?
• A property that has a mixture of business and residential use that you are selling as one unit such as a shop with a flat over it?
• A property that has can be used for business and residential such as a live/work unit?
• A number of properties that you are selling as one lot?
• A property that is unoccupied and unsafe for occupation?
• A property that is for demolition and redevelopment of the resulting site and has the appropriate planning consent for such demolition and redevelopment

If you answered YES to ANY of these questions you might not need a HIP but conditions are attached to these exceptions so you need to take advice before committing yourself.

If you answered NO to ALL of these questions you will need a HIP to market your home but the need for a HIP should not delay the start of marketing provided that you request the preparation of the HIP before your agent starts the marketing.

The required contents of the HIP are:

• Evidence of the Legal Title.
• Local Authority and Drainage Searches.
• An Index and a Sale Statement.
• If the property is Leasehold, a copy of the lease.
• An Energy Performance Certificate (EPC) which will guide buyers as to the home’s energy efficiency rating.
• Property Information Questionnaire (as from 6th April 2009)
• It should be noted that not all Home Information Packs are the same.

Our advice is to choose a solicitor that considers delivery of the HIP as part of the conveyancing process so that you ensure you have a fully compliant HIP that is valued by your estate agent and the buyer’s attorney.

Question:

Online Enquiry
An enquiry has been made on the Property Price Advice website with the following details.

Full Name:
Alex Sadler

Enquiry:
Don’t know if you can help / advise me. Have plans to turn my 3 bed link detached house into a 4 bed semi. Is this wise? How will it affect house value? Will it make it more or less sellable?

The Team’s Answer

You’re definitely right to add value to your home at the moment as house prices are still pretty static so riding out the downturn is sensible.  There is always the question about detached vs linked and semi but going from a linked to a semi isn’t going to affect your current market value in this climate.  If anything, it will add value ultimately as you are gaining interior space which is pre-requisite for buyers in this climate.  If you are not in the market to sell take advantage of the slump in the building market to get your work done for less than usual.  You would be well within your rights to commission a good, reputable builder at around 65 – 75% less than 2007 building prices.  Make the most of the recession in that way and you will definitely benefit in the long run.  We won’t see prices rise again until around the 3rd quarter of 2010 and that is prime rate dependant!  Go ahead is our advice.