We are pleased to learn of a new urban myth that is challenging this rather tired classic. Although trade magazines continue to print articles on the market-killing properties of HIPs, the "Exchange-Ready HIP" now seems flavour of the month. Some observers are suggesting that by including the Home Condition Report and the Home Use and Contents forms, this will make them "Exchange Ready". While we welcome their optimism, we are concerned that expectations are being unfairly raised by such promises. Until HIPs include a contract which is agreeable to any purchaser's conveyancer and has all the answers to all the questions about the property that the aforementioned conveyancer could ever ask, the concept of the "Exchange-Ready HIP" remains in the twilight world of urban mythology.
All properties need HIPs
From the beginning of April, all qualifying properties that are brought to market now need a HIP, including newbuilds. This is because Energy Performance Certificates (EPCs) can now be produced for all types of properties, and hence the exceptions that used to exist for properties built to the latest building regulations have been eliminated.
The "Drop-Dead Date" that required properties already on the market before HIPs were introduced, to have a HIP, has still not been announced. With the first year of HIPs nearly upon us, there is still no confirmation whether such a measure will ever be introduced.
June 1st Position
To clarify the position from June 1st 2008 , this merely marks the end of the temporary measures that were introduced last year. From that date, it will be necessary to have the following documents available for prospective buyers before a property can be marketed;
- Index
- Sale statement
- Evidence of title (or a copy of the SIM search showing registration status)
- Energy Performance Certificate
As before, the seller still has 28 days to deliver the searches and the leasehold documentation, but the property may be marketed without these, although the HIP provider must demonstrate continuing efforts to obtain such documents.
EPCs for rental properties
Although not due until later this year, discussions are starting about the requirement for EPCs for rental properties. It appears that the impact of the introduction of EPCs on the rental market will be nowhere near as onerous as many had feared, with a single EPC required only at the first change of tenancy after the start date of October 1st 2008. As EPCs last for ten years, and are NOT required at future changes of tenant, their introduction will be less costly than some had thought.
