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Home Information Packs draw one step closer

July 2005

News Release 2005/0151: 25 July 2005

HOME INFORMATION PACKS DRAW ONE STEP CLOSER

The introduction of Home Information Packs - aimed at transforming home-buying and selling - has received a boost with plans announced today, showing there has been real progress following discussions between Government and the industry about how the scheme could operate, including the architecture and ownership of the programme, the structure of a certification scheme, and the shape of a ‘dry run’ planned for 2006. Home Information Packs, which will be introduced early in 2007, will inject much needed transparency into the home-buying and selling process by bringing together key information about a property's condition, energy efficiency and ownership before homes are marketed. The 'dry run' will enable all elements of the pack to be tested. Housing Minister, Yvette Cooper, said Home Information Packs would bring real benefits to those buying and selling homes in England and Wales and would help re-shape the housing market.

The programme’s development, including proposals for the Home Condition Report Registers and the ‘dry run’ in 2006 is in good shape and industry involvement with Government should ensure that public confidence continues to grow in the build up to the packs’ introduction early in 2007.

The partnership is looking at a number of options as to how the Certification Scheme might operate, including as a Not for Profit company predominantly owned by industry and approved by Government. Once the operating criteria are agreed with the industry later this year, the company is expected to be established in shadow form. The scheme is likely to develop and oversee the standards operating within the market for Home Condition Reports and the accreditation of Home Inspectors who will prepare them. This should help consumers and lenders alike, and secure widespread support for the new scheme. It will also provide a means for sellers wishing to select their own inspector. Draft Regulations covering the legal content of the packs will be published shortly, followed by drafts later in the year covering search information, the Home Condition Report and Certification Scheme and the way in which Home Condition Report Registers are to be held and accessed. These Regulations will have been the subject of close working with key stakeholders, and it is unlikely that there will be any surprises for them when the Regulations are finally laid later this year. The Housing Minister announced today that the Awarding Body for the Built Environment's (ABBE) Diploma in Home Inspection, which has been approved by the Qualifications and Curriculum Authority, is also now endorsed by the Office of the Deputy Prime Minister. Government and industry will continue to work together to ensure that those wishing to come forward as home inspectors, particularly experienced surveyors, are able to demonstrate the required standard quickly and at an acceptable cost. This will enable sufficient home inspectors to be available in time for HIP introduction, which will include an assessment of energy efficiency as required by the European Directive. Mary Martin, Pro Vice Chancellor of UCE Birmingham, and Director of ABBE, a 'spin out' from the university, said:

"We are delighted that ABBE's Diploma in Home Inspection has been endorsed by the Office of the Deputy Prime Minister. We look forward to continuing our partnership with the ODPM, our assessment centres and the property industry to ensure that Home Inspectors are adequately trained and ready when Home Information Packs are implemented."

Agreement has also been reached on the need for a 'dry run' to be undertaken in 2006. This is expected to track a representative sample of transactions, by buyers, sellers and others involved in the process, from the point of enquiry through to completion. Estate agents and others will be invited to participate fully in the exercise. Other work will be commissioned to ensure that as many projected benefits as possible are realised for the consumer, but also including improvements to the condition and performance of the housing stock. The costs of a pack will normally be met by the seller and could be deferred until a sale is completed. Such costs will be offset by savings on the cost of buying a new home and by faster transactions. Competition between pack providers is likely to keep costs down for both buyers and sellers. ODPM will work with pack providers, local authorities and others to ensure that the packs can be put together quickly when people decide to move home. In strictly limited circumstances, where there are problems in obtaining one or more elements of the pack quickly, sellers will nevertheless be able to market their homes with an incomplete pack. Work will continue on the programme, in partnership with key players, during the summer months and further update will be given in the autumn.

From early August 2005, those involved in the implementation of the packs and those from the wider housing industry will be able to register for their personal copy of ODPM's HIP electronic newsletter, which will provide updates from Government, details of training events and more.

Notes to Editors

• Stakeholders Comments (203 K)

About Home Information Pack

• The Government is committed to making it easier for people buying and selling homes in England and Wales through the introduction of the home information pack. Legislation to introduce home information packs was introduced in the Housing Act 2004 which became law on 18 November 2004.
• The home information pack proposals are the outcome of extensive research into the home buying and selling process, and a major consultation about options for improvements. Research across a range of housing markets confirms the present home buying and selling process in England and Wales is among the slowest in Europe, is fraught with delays and failed transactions, encourages problems and does not look after the interests of home buyers and sellers. The problem is that under the present system key information required to inform buyers’ and seller’s decisions only becomes available after terms have been negotiated and agreed. As a result of this, research showed that 28 per cent of transactions failed after terms had been agreed. Home information packs will address this by ensuring key information is available up front.
• Compulsory home information packs will be introduced throughout England and Wales in early 2007.
• Scotland – The Housing Bill, which is currently before the Scottish Parliament includes a power to introduce measures similar to Home Information Packs in Scotland.

The Benefits of Home Information Packs are:

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.
Integrated Government Policy Benefits by linking into the governments 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.

More information about Home Information Packs, including proposed contents of the packs can be found at: http://www.odpm.gov.uk/homeinformationpacks