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Published by the Office of the Deputy
Prime Minister
Why haven't you announced a Drop Dead Date (DDD)?
Properties put on the market before the commencement dates will
not need to produce a HIP. A date may be set when all properties
that remain on the market will be required to have a HIP.
What has been announced?
The final phase of the roll-out to properties with two bedrooms
or fewer from 14 December 2007
Publication in December of guidance on access to search data and
a consultation paper on local authority charging aiming to speed
up searches and deliver a fairer deal for consumers.
An extension of the temporary First Day Marketing provisions for
an additional 5 months to allow for full flexibility (from 1 January
to 1 June 2008).
The laying of an order to temporarily amend the HIP Regulations
until 1 June 2008. During this time the required leasehold information
will only be a copy of the Lease. The other leasehold documents
that are currently required will become authorised during this period.
We have commissioned Ted Beardsall, Deputy Chief Executive of the
Land Registry - and member of our Home Buying and Selling Stakeholder
Panel - to advise on what else can be done to improve the search
process and the provision of leasehold information.
Why did you extend the exemption on first day marketing?
We have extended to ensure smooth implementation as well as because
of a later than expected commencement of Home Information Packs
and in response to delays in the production of guidance to local
authorities dealing with access to and charging for search information.
Will the leasehold changes be retrospective?
Yes. The current rules will continue to apply until 14 December
but from this date existing packs and packs in preparation will
only be required to include a copy of the lease. The Home Information
Pack Index on the CLG website will be amended to reflect the change.
What will happen to packs already completed?
If existing packs contain leasehold information which is not mandatory
under the updated regulations, those sellers will benefit from having
more information about the property available for potential buyers
thus making their homes easier to sell.
Why have you decided to roll out now?
As we made clear, we planned to roll out to other sized properties
having taken into account the number of assessors and how HIPs are
operating in the market ensuring a smooth implementation in the
housing market. However we also had a duty to consumers to ensure
the carefully managed, smooth implementation of the packs, which
is why we looked carefully at how they are operating in the housing
market.
The government also commissioned and considered extensive analysis
by Europe Economics on the impact of HIPs on the market. It finds
no evidence of any impact on transactions or prices, although there
is a predicted short term impact on new listings as sellers change
the timings of their listings. It concludes that the impact on listings
is short lived, and the impact on the market is marginal compared
to the wider factors.
The final stage of the roll out follows careful consideration of
how HIPs and EPCs have been working in order to maintain their smooth
introduction into the housing market. Now, as from 14 December DEAs
will be able to carry out EPCs for all properties.
What about sales of new homes?
Sales of new homes built to the most recent Building Regulations
(Regulation 17C, Part L, 2006) are currently exempt from the need
to have a HIP. The current intention is to bring these properties
within the scope of the HIP scheme on 6 April 2008 - the date on
which EPCs will be required on construction for all dwellings.
What documents are actually required to be included in the HIP?
HIPs will include the Index, EPC, sale statement, evidence of title,
searches and, where appropriate, a copy of the lease or commonhold
information.
These documents bring information up front in the home buying and
selling process reducing the risk of problems emerging later on
that cause wasted money, time and energy This will allow less time
for additional problems to emerge and will reduce the number of
sales which fall through and in turn reduce the number of chains
which collapse.
What's happening with authorised leasehold documents?
It is standard conveyancing practice for the seller to provide leasehold
information once a sale has been agreed but before completion.
The temporary provision described above will allow this practice
to continue and is intended to protect owners of leasehold properties
from facing additional and unreasonable costs at the beginning of
the sale process, while additional evidence is collected into the
extent of this problem.
Transactions involving leasehold properties are often held up by
delays in obtaining leasehold information. Providing this information
upfront in a HIP is intended to eliminate these delays and also
help reduce the number of transactions that fall through because
of problems associated with leasehold information coming to light
at a late stage.
We are not removing the leasehold documents from the pack; instead,
the government has decided to allow the provision of leasehold documents
to be determined by the market. This provides consumers with choice,
encourages competition and helps to drive down prices. The government
is also engaging with stakeholders in an ongoing process, and taking
account of the views of these stakeholders in making its decisions.
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