Mortgages |
|
Your Money > Mortgages Articles > Don t let...
|
|
By Richard Evans The process of buying and selling a home has changed. From the 1st of August, sellers in England and Wales will be required by law to have a home information pack or Hip before they can put their property on the market. Initially it will only be for Hips bring together a number of documents needed when a property is sold. Most are familiar - evidence of title, searches and leases, for example, along with a "sale statement" detailing basic information about the property (click here to see an example) and a Hip index listing its contents. There is also one new document - the energy performance certificate (EPC - click here for an example). Hips aim to make the process of buying and selling a home easier by lessening the chances of nasty surprises coming to light at a later stage. The Government also hopes that energy performance certificates will highlight the amount of energy wasted in domestic use and encourage homeowners to take steps to reduce emissions of carbon dioxide.
"We expect most people to order from their estate agent," says Alex Barnett of the Halifax. "Our estate agents will also accept a Hip that you have previously obtained from a reputable provider. If you wanted us to use a Hip that you had put together yourself, we would check it - there could be a charge for this. But the mortgage lending side of Halifax would not want to see the Hip - we will continue to use our own mortgage survey to assess applications for homeloans." Estate agents should not attempt to force you to use their own Hips. "Agents mustn't use Hips to tie you into other services," says Peter Bolton King, the chief executive of the National Association of Estate Agents. "We would take a dim view of any unfair pressure on the public. Our members should have no problem with Hips compiled by solicitors or the vendors themselves, as long as the packs are genuine and accurate." As a temporary concession until the end of the year, the Government is allowing sellers to market their properties as soon as the Hip has been ordered. This is partly because demand for EPCs could cause delay. "We think it could typically take about seven days to get the energy certificate," says Mark Desvaux, the managing director of HouseWeb.co.uk, the online property exchange. "But there are lots of variables - variations in demand, delays in popular locations and the need to arrange home visits for the energy inspection." Jeremy Leaf, the estate agent and housing spokesperson for the Royal Institution of Chartered Surveyors, adds: "Sellers face more preparation before putting their property on the market, so there will be less speculative marketing. We expect this, together with the cost of Hips, to reduce supply and put up prices." If you are buying a home and the Hip has been compiled, it must be made available to you when you express an interest in the property, although you are under no obligation to take it. If you do, the provider can make a reasonable charge for copying. If the pack is in paper form the cost could be about £20, although Hips may also be available in electronic formats. "I don't think many buyers will demand to see Hips before viewing properties, although the energy efficiency graph will be on the sale particulars," says Mr Bolton King. "Once buyers have narrowed their search down to two or three properties, I think they may ask for the Hips. But as the packs do not have to include legal summaries, they may not mean much. You will probably need to take the Hip to a solicitor to explain it to you - especially any lease terms." But in today's overheated property market, buyers often feel they must take an instant decision about whether to make an offer on a property they like or risk losing it to a nimbler rival. "Buyers will probably end up looking at the Hip after they have made an offer," he says. "Technically, there's even nothing to stop contracts being exchanged before the Hip is complete, although solicitors would want to see information such as leases and the results of searches before doing so." While Mr Bolton King thinks the leasehold information in Hips will be useful, he points out that it can take a long time to obtain. "It's a real problem getting hold of. Managing agents, who supply information about leases and management charges, could charge what they like - especially if the information is wanted quickly. If so, the Government has totally underestimated the cost of Hips to the seller." Another potential source of delay to completing a Hip is pressure on the local authorities that carry out the searches. "The Government has admitted that some local authorities are not up to speed - this is why sellers are allowed to start marketing without a complete Hip," says Mr Bolton King. "We've heard that some local authorities have started rationing the number of searches that they will undertake each day. "Under the present system, these searches are carried out on properties that actually change hands, of which there are about 1.5 million a year. But under the Hip regime, these searches are needed for every property put on the market, which means maybe 1.8 million to 2 million searches a year. This puts more pressure on councils and makes delays more likely." Once the Hip is complete, it is valid until the property is sold. There are a few circumstances in which Hips are not needed. These include sales that involve no marketing, such as those to a member of the family - although even putting up your own "for sale" sign counts as marketing, as does selling at auction or via websites. Also excluded are non-residential properties, seasonal accommodation and that used exclusively for holidays, mixed properties (such as a shop with a flat), right to buy homes, properties not being sold with completely vacant possession and unsafe properties or properties to be demolished. More information: www.homeinformationpacks.gov.uk Useful links |
| ||||||||||||||||
|
Copyright © 2007 |