If you have begun researching the purchase or sale of a home, you have likely come across two acronyms – HIP and EPC. What do these letters stand for, and what do they mean for people entering the housing market?

HIP (Home Information Pack)

A Home Information Pack (HIP) is a package of documents that provide information to prospective buyers who are interested in purchasing a property. These documents include:

• Energy Performance Certificate
• Building Insurance Policy
• Local Authority Searches
• Guarantees
• Title Documents
• Sale Statement

As of 2007, HIP packages became mandatory for the sale of homes with three bedrooms or more. This rule was mandated under the provisions of the Housing Act 2004, and although the public rarely likes having things enforced upon them, HIP is receiving positive reviews since a high level of information disclosure can help avoid abortive sales.

Obtaining a HIP for your home is a cost burden, which is placed on the seller; however, it is minimal when compared to the overall fees involved when selling a home. Trying to avoid this cost by not providing a HIP, or by providing an incomplete one, may result not only in having to pay the full package fee, but also a hefty fine.

EPC (Energy Performance Certificate)

An Energy Performance Certificate (EPC) is created to give the homebuyer an idea of the home’s overall energy efficiency.

The information provided by this certificate will allow the buyer to asses the costs associated with the home’s energy consumption and the home’s overall environmental impact. These certificates are an excellent resource for buyers who are often concerned with not only the home’s purchase price, but also the cost of its maintenance.

Now, with an EPC buyers can compare the long-term costs of the homes they are considering. As an added feature, EPC’s also provide information on how to improve the home’s energy efficiency based on its current rating.

The Energy Saving Trust estimates that by following these proposals, new homebuyers can save significant amounts of money each year and reduce the overall quantity of CO2 emitted in the UK. In addition, environmentalists hope that good EPCs will become a selling feature, thereby encouraging sellers to improve their home’s energy efficiency in order to be more competitive in the market.