The Government has recently highlighted the significance of Energy Performance Certificates (EPCs), by insisting that the certificate must be the first document in a HIP and must be attached to the estate agents’ property particulars. We are all aware that global warming is becoming a very important factor in our lives and we are also very aware of the huge increase in energy prices recently. Domestic property accounts for nearly one third of all the UK's carbon dioxide (CO2) emissions, and therefore acts as a major contributor to global warming in the UK.

The EPC will provide you with an energy efficiency rating and an environmental impact rating for the property as it stands on the day of the inspection and will make recommendations as to what can be done to improve them both. At first glance it looks very similar to the stickers that you find on many “white goods” like fridges and freezers. It uses a simple A–G scale where ‘A’ rated property will be very energy efficient and properties rated ‘F’ or ‘G’ will be much less efficient. In addition there will be a number of recommended improvements which are split in to categories of cost and it is your choice which ones are cost effective for you to undertake. The average householder will decrease their heating and lighting bills by nearly £300 every year by taking notice of these improvements. They will also help reduce CO2 emissions and help decrease the effects of global warming.

From 1st October 2008 all rental properties will require an EPC. Once issued the EPC will not legally need to be renewed for 10 years but must be shown to each new tenant over the lifetime of the certificate.

EPC’s £60.00 plus VAT

The Home Condition Report (HCR) contains information about the physical condition of the property. Sellers, buyers and lending institutions will be able to rely on the report. It will provide a simple method of condition ratings. Each element of the property, for example the roof, walls, ceilings etc. will be thoroughly examined and given a rating. This will be on a three point scale:

‘1’ rating indicates either no defect present or if the works are very minimal and could be classed as normal maintenance;  

‘2’ rating indicates that repairs are required but the home inspector does not consider these to be serious or urgent  

‘3’ rating is applied if urgent works are required or maybe further investigation should be carried out.

The report will also contain other essential information including highlighting any health and safety risks and providing a reinstatement cost figure which can be used for insuring your property in the event of maximum loss.The government believes that sellers will want to provide this anyway within a sale. But why should you? Here are a few reasons:The Home Condition Report (HCR) will:

1. Allow you to accurately market your property:
If you are aware of the condition of the property, the asking price and method of marketing can be decided on with your estate agent. Is it really worth marketing way above its value?

2. Allow for further investigations of problems, during marketing, to avoid delays after offer acceptance:
Defects identified in the HCR can be addressed through some or all of the following:

- Undertaking further investigations by specialist contractors.

- Obtaining quotations for specified works.

- Undertaking works and providing invoices to include in the HIP.

3. Allow evidence of repairs done to be directly linked to the report findings:
If repairs are undertaken following their need being identified in a HCR, a contractor can be requested to set out in their invoice the specific work carried out, which can be related directly to the relevant item in the HCR and can be included in the HIP as an authorised document.

4. Show you and potential buyers that your sellers are serious, not just kite flyers:
If you are really serious about selling, the prospect of committing to pay for the HCR should not be a significant factor in your decision as to whether to market the property and agree to a sale. Is a small additional fee now worth paying to ensure a sale?

5. Eliminate suspicion by potential buyers that you are trying to hide something:
The production of a HCR will show that you are willing to subject to transparency about the property and that, if there are problems with the property; they have been recognised as legitimate and addressed. 

6. Impress buyers who are saved having to get a survey and who will be more inclined towards your properties:
Buyers will be more receptive to properties with a HCR as they will be able to eliminate the concern about costs, hassle of commissioning their own survey and the potential for further delays and costs if the survey discovers problems. First time buyers will be particularly pleased to have the benefit of a HCR; they are usually buying cheaper less well-maintained homes and are often inclined to minimise costs by neglecting to have a survey – the HCR gives them confidence that they know what they are buying, without the costs.

7. Ease and speed up mortgage applications:
Lenders are legally entitled to use and rely upon the HCR. They are increasingly wanting to use automated valuation models (AVMs) for assessing properties and linking these with the HCR is one of the biggest steps forward in speeding up the mortgage application process. As lenders increasingly use AVMs the costs of the mortgage application should reduce in line with the efficiency and speeding up of the process.

8. Reduce the potential for sales falling through or difficult renegotiations:
If the condition of the property is known before an offer is made, there is far less opportunity or justification for a buyer to attempt to reduce the price or withdraw from the purchase. This will drastically reduce the hassle, delays and suspicions which are so often brought about by last minute discovery of condition-related problems.

9. Speed up the process between offer acceptance & exchange of contracts:
If there are few, if any, reasons for delays in the process after offer acceptance (also brought about by the legal information being substantially available in the HIP) the period between offer acceptance and exchange of contracts can drastically reduce, perhaps to no more than around two weeks. This reduces the window of opportunity for extraneous factors to disrupt a sale and for the opportunity for gazumping to take place.

10. Impress potential clients
You will confirm to potential purchasers, that you are forward thinking and not afraid to confront the realities of the market-place, which is anecdotally recognised as a minefield. What if you are the only property for sale WITHOUT an HCR included in the HIP?

Remember: As an inspection is required by law for the Energy Performance Certificate (EPC), it is extremely cost effective to commission the HCR at the same time. The Government has confirmed that the HCR will be a discretionary element of the HIP. Although, if the HCR is not taken up by the public that it will look towards making the HCR a mandatory document.

A Home Information Pack (HIP) is compulsory for all sellers of residential property in England and Wales. It is an offence to market a property unless a HIP has been commissioned for inspection by a prospective buyer.

The purpose of the Home Information Pack is to ensure that all relevant documents and searches are available when the property is marketed. Previously this was left until after a buyer had been found, often resulting in delays of weeks or even months. Many transactions fell through after the buyer had seen a condition survey which was often not available for some weeks, during which time the buyer may had paid for searches, other fees and expenses.

The Home Information Pack must contain copies of the following compulsory documents:  

- An index of documents in the pack 

- A sale statement 

- Evidence of title

- Replies to searches made with the local authority 

- Replies to searches made with the local water authority

- An Energy Performance Certificate (EPC)

Optional documents may be included:

- The Home Condition Report (HCR)

- Other searches such as mining searches

- Copies of any current planning applications

- Copies of any warranties and guarantees

- A property information form

- A fixtures and fittings list

If you live in a Leasehold Flat you will also need to provide: 

- A copy of the lease 

- Regulations made by the landlord or management company 

- The most recent service charge accounts and receipts 

- Memorandum and articles of the landlord or management company 

- Building insurance policy details and payment receipts 

HIP Exemptions 

It is not necessary to produce a Home information Pack for the sale of the following: 

- Properties in Scotland and Northern Ireland 

- Private arrangements where the property is not offered on the open market (e.g. sold to a family member, neighbour, or friend) 

- Properties sold with sitting tenants and not available for owner occupation 

- Portfolios of residential property 

- 'Right to Buy' sales by Local Authorities or other social landlords 

- Mixed commercial and residential properties 

- Non-residential properties 

- Properties with leases of 21 years or less left to run 

- Properties for seasonal and holiday accommodation 

- Properties for demolition or redevelopment

Freehold HIP's £249.00 plus VAT (PDF Format)   Leasehold HIP's £264.00  plus VAT (PDF Format)