Friday, April 07, 2006

Goverment announces dry run for Home Inspection Packs.

Government has set out today next steps to help homebuyers with the announcement by Housing Minister, Yvette Cooper, of details of a dry-run prior to introducing Home Information Packs (HIPs) on 1 June 2007.

The Government is introducing HIPs, which have long been called for by consumer groups, to address the serious problems and delays homebuyers and sellers face when they can't get early reliable information about homes.

HIPs will provide reliable information at the beginning of the homebuying process to help prevent buyers and sellers being misled by incomplete or inaccurate information when they put in or accept an offer. Currently £1million is wasted every day when sales fall through. The Government has said that all aspects of the Packs need to be tried and tested through a dry run before becoming mandatory on 1 June next year.

The dry run has already begun with 45 organisations in England and Wales already providing more than 2500 packs on a voluntary basis. The Association of Home Information Pack Providers will be rolling out voluntary HIPs in the regions during 2006 and 2007.

From August, the first certification schemes, which will ensure the work of Home Inspectors meets tough Government standards, will be approved. Currently seven organisations have applied to run the certification schemes.

The approved schemes should begin to operate from October 2006, with qualified, certificated Home Inspectors able to register the Home Condition Report and deliver authorised reports to consumers. At the same time a rigorous testing process will be put in place for example, Home Inspectors' work will be assessed through the Certification Schemes and consumers will be surveyed to ensure they can understand the contents of the Pack and the Home Condition Report to use them effectively.

Between 5000 and 7400 full time Home Inspectors will be required to complete an estimated 1.44 million Home Condition Reports each year. Over 4000 people have begun training to gain the Home Inspector qualification.

Yvette Cooper said:

“The current system isn't fair on buyers or sellers. £1million is wasted every day when sales fall through and too many buyers and sellers face real headaches when it turns out they were misled or that problems emerge when it's too late. Home Information Packs have been long called for by consumer groups to give people reliable information at the beginning of the process. Now the dry run will make sure that all aspects of the Packs are properly tested before being fully introduced next year."

From January 2007, lenders will be able to acquire Home Condition Reports electronically from a register and use them for valuation assessments as part of their lending decisions.

This month will also see the Home Information Pack advertising campaign kick off with advertisements placed in trade and online media designed to raise awareness of the new arrangements amongst to estate agents, solicitors, mortgage lenders, surveyors and Pack providers. The campaign will be extended later in 2006 to inform and educate homeowners and first time buyers as to what they will need to do as implementation date draws nearer.

As momentum gathers in the run up to 1 June 2007, the ODPM has created a dedicated website at http://www.homeinformationpacks.gov.uk/index.aspx - for industry and consumers. The site will provide detailed, up-to-date information, including case studies, FAQs, leaflets, regular e-newsletters, event details and other useful links.

Notes to editors:

About Home Information Packs
As from 1 June 2007, homeowners will be required to provide a Home Information Pack when marketing their homes for sale throughout England and Wales. This will help reduce the estimated £1 million which is wasted each day because of failed transactions. The Pack will include a Home Condition Report, terms of sale and any search details. An energy effiency rating will be included in the report, giving consumers the choice to assess the likely running costs of a property before they buy.

1. Consumer Benefits:

  • Provide transaction improvements by reducing the abortive costs to consumers and the industry attributable to failures caused by survey or valuation inspection findings.
  • Improve the condition of the housing stock by reducting the incidence of unexpected repair bills and encouraging better maintenance of homes.
  • Provide greater consumer choice by reducing the entry costs to first time buyers and creating a market of serious sellers.

2. Cost of Home Information Packs:

  • The Packs will cost around £600 plus VAT. Most of this cost is not new being met at present by sellers and buyers. The Home Condition Report is the new item and is expected to cost around £300, for an average home, plus VAT. It is similar to the homebuyer survey that some purchasers already commission.
  • The proposed content of the pack includes searches and other information which is currently paid for by the buyer. Where several buyers pursue the same property, then these costs are repeated by each buyer. Under the new arrangements all prospective buyers will be able to access this information up front as supplied by the seller.

3. 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 details abiout the property at no cost to them.

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 immediately before implementation of the mandatory scheme in June.

Industry accepts that sellers will generally not pay up front for Home Information Packs. Thus there is no impediment to sellers marketing their homes with the Packs both before and after implementation.

4. Home Inspectors/Certification Scheme:


Only inspectors qualifying under certification schemes 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 and the reports can be trusted.

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 Home Condition Reports.

5. 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.

6. Integrated Government Policy Benefits
Home Information Packs support the Government’s wider reform agenda, including raising the energy efficiency of the housing stock, and improving its state of repair. as well as contributing to sustainable home ownership and communities.

7. A timeline was published on 16th March 2006 -

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