NEWS RELEASE
Home Information Packs 'go-live' date announced ODPM News Release 2005/0233
17 November 2005Home Information Packs, which are being introduced by Government to reform the home buying and selling process, will become mandatory from
1 June 2007.Currently, one million pounds a day is wasted on failed transactions as buyers often spend hundreds of pounds on valuations, legal advice and searches on transactions that ultimately break down. By providing key information at the beginning of the process, Home Information Packs will prevent waste and significantly cut the number of sales that fall through. The Packs are expected to cost around £600 +VAT for the average home. Most of those costs are currently paid by the buyer.
Housing Minister, Yvette Cooper said,
?Too many sales fall through because of delays and late information, wasting money and causing great stress for buyers and sellers, that?s why we are introducing the Packs. We have been working with all parts of industry on the detail and this timetable will give them time to fully prepare?.
The Government expects that confirmation of an implementation date will act as a trigger to others who are waiting to begin their training as Home Inspectors as well as provide certainty to organisations who are already preparing to offer Home Information Packs to consumers on a voluntary basis.
To date, seven assessment centres have been established and 1700 people from the surveying and property industry and from other professions are undergoing training for the Home Inspector qualification, with hundreds in the pipeline, waiting for the implementation date to be announced. Research shortly to be published by ODPM will confirm the number of home inspectors expected to be required for June 2007 is between 5000 and 7400. The next steps for the programme is to establish a certification scheme which is required to provide quality assurance and manage the Home Condition Report and Home Inspector registers. It is expected this scheme will be operating by the summer of 2006. A ?dry run? will follow later in the year designed to provide assurance to the industry and the public in advance of mandatory introduction on 1June 2007.
Notes to Editors:
- Consumer Benefits:
Provide Transaction Improvements by reducing the abortive costs to consumers and the industry as well as reducing the number of failed transactions caused by survey or valuation inspection finding. Housing Stock Condition Improvements by a reduction in the incidence of unexpected repair bills and encouraging better maintenance of homes. Greater Consumer Choice by reducing the entry costs to first time buyers and creating a market of serious sellers.
- Cost of Home Information Packs:
The Packs will cost around £600 plus VAT, and most of this is not new cost. Included in this is the Home Condition Report, which is expected to be cost around £300, for an average home, plus VAT. The content of the pack includes searches and other information which is currently paid for by the buyer, If several buyers pursue the same home, then currently these costs are paid for several times rather than just once with the Home Information Pack.
- Market Impact:
Home Information Packs will make the market more efficient and certain. They will make home buying more affordable and sustainable for first time buyers, who will receive full information in packs without having to pay for it. Major players are now investing heavily in Home Information Pack systems and intend to market these well in advance of packs becoming mandatory. This means sellers and buyers will not have to wait until June 2007 before they can benefit from packs, and there is less likelihood of a ?spike? of properties coming to the market immediately before implementation of the mandatory scheme. Industry accepts that sellers will not pay up front for HIPs. Thus there is no impediment to sellers marketing their homes with HIPs both before and after implementation.
- Home Inspectors/Certification Scheme:
Only inspectors qualifying under a certification scheme 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. 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 HCRs. Research on the number of Home Inspectors required provides a range of estimates of between 5000 and 7,400 based upon assumptions around numbers of HCRs required and Home Inspector productivity levels in liaison with the industry. Details of the assumptions are described in the full report, which will be published shortly. The report also highlights the need to continuously monitor and revisit the range estimates as more evidence on the assumptions and Home Inspectors working patterns becomes available.
- Home Condition Report:
The Home Condition Report will be an objective report on the condition of the property that buyers, sellers and lenders will have a legal right to rely on. Home Inspectors will have to have suitable insurance that will be backed up by insurance of last resort provided by the certification scheme.
- Integrated Government Policy Benefits
Home Information Packs link into the Government?s wider agenda including compliance with the EU directive for energy reports, contributing to energy efficiency education among consumers as well as contributing to more sustainable home ownership and communities.
- For background information please visit formatting link