In case anyone has been sleeping under the stars, home information packs (HIPs) are a set of compulsory documents that sellers must provide when they put their home on sale.
When the government first announced the introduction of HIPs as a measure to reduce sale completion times, the amount of detail to go into the pack was enormous. Since then, however, the legislation has significantly changed. For starters, HIPs are only required for homes with four bedrooms or more and, although the government has declared that smaller properties will be phased in, no specific date has been announced at the time of going to press.
Whats more, even a four-bedroom home may not require a HIP if the land it occupies amounts to more than five hectares and is used for cultivation, breeding or keeping of animals, or grazing and woodland, says Zoe Napier of estate agent Fenn Wright.
This means a good number of equestrian homes will be HIPs-free, either because they have fewer than four bedrooms or they come with more than five hectares and are used for grazing.
However, estate agent Sam Butler of Butler Sherborne warns: If you were to break a property up into house and gardens as lot one, and five hectares plus stables as lot two, the house and gardens would require a HIP.
Even better, the home condition report, which was perhaps the most complex and expensive element of the old HIPs, has been downgraded from compulsory to optional. The mandatory documents are now restricted to a sale statement detailing some basic information about the property, standard searches, evidence of title to sell the property, an energy performance certificate (EPC) and the leasehold documents where appropriate.
Of these requirements, only the EPC is less than straightforward, and may cause a headache for equestrian sellers: much like the energy rating for home appliances, it shows how energy efficient a property is, and what impact it has on the environment, on a scale from A to G. This could affect the market if buyers were to discriminate in favour of more energy efficient homes. However, the vast majority of UK properties fall into categories D and E for energy efficiency and environmental impact so, EPCs are unlikely to have a substantial effect on demand.
The ECP is a worthless document for an older country house, which will not be good on heat or light loss. The paper wont encourage or discourage any buyer, says Diana Andrews of estate agents Churchill.
But where HIPs are likely to affect the market is through the vendors pockets. Each pack, which can be produced by estate agents, solicitors or dedicated pack providers, will cost in the region of £300-£400. For this reason a number of properties were put on sale early to beat HIPs, says Toni Thorpe of Walkers Estates.
Some chose to wait until after 1 August so that the HIPs would be produced and their properties would not look like they had been on the market for a long time, reports James Baker of Strutt & Parker.
Having to pay for the packs may also deter people from putting their home on the market speculatively thus reducing the hitherto sizeable band of vendors who do not need to sell their home but may be tempted to at a specific price, creating a property shortage, with the knock-on effect of higher demand for property and price increases, says Zoe Napier.
This property feature was first published in Horse & Hound (6 September, ’07)