The Government has decided to kill off the most controversial part of its planned home seller's packs by withdrawing the home condition report (HCR) element from the proposed Home Information Packs (HIPs).

But what will it mean for buyers and sellers - assuming the Government sticks to its plan to introduce compulsory home information packs in England and Wales next June

An HIP will still have to be provided by the seller (or the estate agent, for a number plan to provide the packs on a "no sale no fee" basis) within 14 days of a property going on the market. It must contain ownership, planning and environmental searches, a list of fixtures and fittings included in the price, and the terms of sale.

Everything, in fact, that the buyer currently sets about getting after an offer is accepted. The pack must also include the property's Energy Performance Certificate (EPC). What has been dropped, at least for now, is a compulsory Home Condition Report, although this can be added voluntarily. Buyers will still need a mortgage valuation.

HIPs were intended to speed up the buying and selling process in England and Wales, cut down gazumping, reduce the number of sales falling through after an offer is accepted, and better protect the buyer - rather like the American model where home condition reports (known there as "material disclosure") have been law since the 1990s.

Because the seller pays for the pack, it is good news for first-time buyers. It was also a way to meet the EU's energy directive. To many, getting the legal work done in advance will speed up the time between offer and exchange of contracts, which should lessen the chance of someone coming along and offering more after you have forked out on searches and surveys. Searches will only be done once per property rather than several times, as when a number of buyers are "racing" to exchange on the same property.

Trading standards officers who would be responsible for policing the packs said that the £200 fines for sellers who failed to provide an HIP could prove too expensive to pursue. There are also fears that there will not be enough inspectors trained by next June.

The Energy Performance Certificate will tell you your property's "energy efficiency rating" (A-G, just like the stickers on a new fridge) and its "environmental impact (CO2) rating", plus guidance on improvements. In these eco-conscious times, it is hoped that having a good energy performance rating will be something for sellers to boast about.

Exactly how much an HIP will now cost home sellers is a matter of dispute. Even before HCRs were dropped, there were widely differing views.

HIPs at a glance

What's in the pack?
Searches, terms of sale, replies to preliminary inquiries made on behalf of buyers, copies of warranties and guarantees, evidence of title, list of fixtures and fittings, and an Energy Performance Certificate.
The Home Condition Report was to have been compulsory but is now optional. It contains information on the condition of the property and highlights any defects requiring action, similar to the current homebuyers' survey, but excluding valuation.

What's the position now?
Sellers are encouraged to provide the details set out in a Home Condition Report, but this will be voluntary. Sellers will still need to provide information on energy efficiency, searches and evidence of title. Housing Minister Yvette Cooper says mandatory reports are still a possibility. Take-up could be market-led if buyers prefer sellers who supply HCPs.

What is the point of the Energy Performance Certificate?
It will give a guide to the likely energy costs of the building and recommend improvements. The Energy Savings Trust has estimated that the average home owner could save around £300 a year on fuel bills if they follow the guidance.

When will it be introduced?
June 1 2007.

What does it cost?
Before HCRs were dropped, estimates ranged from £600 to £1,200. Without the HCR, that could fall to £500 - or even, some claim, to £150.

Where do I get the pack?
HIPs will be available from estate agents, conveyancers and solicitors. You can also put your own together by employing a home inspector and a conveyancer or solicitor.

Are there any exclusions from HIPs?
Private sales (e.g. to a family member or friend); non-residential property or where homes are in mixed use with commercial property; properties sold with sitting tenants and not available for owner occupation; portfolios of residential property.

Your home may be repossessed if you do not keep up repayments on your mortgage.
Article date: 10.06