Printer Friendly

SOLD SHORT; Is the Government right to water down its plans for HIPs?


THE government's bid to take the hell out of homebuying has ended in disarray. In a remarkable U-turn ministers announced a key element of their controversial Home Information Packs (Hips) would not be compulsory.

Housing minister Yvette Cooper said Hips, which come into effect next June, would not have to contain Home Condition Reports (HCR).

These were designed to provide an independent survey for prospective home buyers which, it was hoped, would speed up house sales and mean fewer deals collapsed.

But ministers caved in to pressure from campaigners - led by Kirstie Allsopp, presenter of the Channel 4 home show, Location Location, Location - who argued that Hips costing pounds 1,000 a time would prove an expensive burden.

Kirstie said: "Almost a third of all offers made by homebuyers don't result in a completed sale. The government thinks this is the result of surveys. But research shows that only four per cent fall through as the result of a failed survey.

"Hips would have cost the industry - and that ultimately means homebuyers and sellers - pounds 600million a year to solve an pounds 18m problem."

Her campaign was backed by the Tories, many estate agents and mortgage lenders and some Labour MPs including Frank Field and Kate Hoey.

They believed the scheme would seriously destabilise an already unpredictable housing market by causing a stampede of sellers eager to beat a Hips deadline followed by months of stagnation.

Another problem was training enough people to carry out the HCRs. Some experts eckon around 7,000 qualified inspectors were needed as about 1.5 million homes change ands each year.

But the recent U-turn has left hundreds of disappointed trainee inspectors, who ad already paid for expensive courses.

The government says that Hips will still go ahead and although it won't include the CR it will still have energy performance certificates for homes, similar to the fficiency ratings seen on new refrigerators.

So, with pounds 200m already spent on preparing for Hips, is this climbdown by the overnment a sensible compromise or an embarrassing cop-out?


says PETER BOLTON KING, Chief Executive at the National Association of Estate Agents

WHEN the government first started talking about Home Information Packs (Hips), they sounded like a great idea. Who wouldn't want to prevent property sales from falling through? But as the details emerged it was obvious they would not solve the problems associated with the housing market.

These problems included the cost - estimated at up to pounds 1,000 - fines of up to pounds 200 for breaching the legislation and a potential two-week delay before a property could go to market.

Our research also revealed a fundamental flaw in the government's plans for Hips - they wouldn't actually prevent property sales from falling through.

More than 60 per cent of those who reported problems with a property transaction said it was due to a chain breaking or a higher offer coming in from another buyer - nothing that Hips would solve. Plus, even more worryingly, another report last month found that even a reduction in housing supply as slight as 10 per cent could lead to a significant reduction in government revenues and even result in increased unemployment.

This echoed our concerns. Now the government has finally listened to our industry and performed something of a U-turn on HIPs by removing mandatory inclusion of the Home Condition Report the most controversial aspect of the whole scheme.

But without the HCR, the Hips are virtually useless, offering buyers only local search information and facts on the energy efficiency of the property.

This does nothing to solve existing problems with the property buying and selling process, and is likely to be considered a nuisance by the home owners who will be forced by law to pay for it.

NO says

NICK STACE, Which? director of campaigns and communications

THE government's decision to bow to pressure from mortgage lenders, estate agents and other self-interest groups is deeply disappointing.

By swallowing their Hips hype and excluding the need for a Home Condition Report they have effectively rendered the new scheme redundant.

The scare mongers warned that the packs were going to cause chaos.

However, Which? and the very industry that slated the pack have worked closely with government to ensure the implementation of Hips would have been a success. Pilot schemes were planned across the country that would have ironed out any problems.

It is a real shame that an initiative to make the home buying process easier and more transparent, especially for first-time buyers, has been derailed by misinformed headlines and industry lobbying.

If the home home-buying process was perfect then Which? would be the first to sout out against upsetting the system.

But, while industries may have pocketed millions out of the current process, it is safe to say that many of us who have moved home have found the process far from perfect.

The Home Information Pack would have been the ideal solution to this problem.

The "half- Hip" that will now come into force next June will be of little value but out of real expense to consumers. as such, Which? has withdrawn its support for the scheme.

Our research showed that estate agents are the second-least trusted profession after politicians and following this U-turn, perhaps it is not surprising.

YOUR money


HOME Information Packs could never stop every sale from falling through.

So many things can go wrong, not least when sellers accept a higher price from a rival buyer - the dreaded gazumping - or buyers try to beat down the price at the last minute.

But the cost of Home Condition Reports may have been enough to stop vendors who never really intend to move from putting their home up for sale in the first place. They could also have made the whole homebuying process simpler and less painful.

Now HIPs will be worthless without a Home Condition Report which is acceptable to everyone - buyer, seller and mortgage lender - and has legal clout.

All sides of the industry should sit down with the government and design a scheme which is workable and then set an achieveable timetable for its introduction.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2006 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Business
Publication:The Mirror (London, England)
Date:Jul 26, 2006
Previous Article:COVER YOUR TRIP WISELY; pounds NOTES.
Next Article:THE PRICE STILL ISN'T RIGHT TO ROAM; Don't let massive mobile tariffs ruin your holiday..

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters