Home Information Packs (Hips) condemned by Cameron

The Conservative Party leader, David Cameron, has condemned Home Information Packs (hips) as a "roadblock to ownership",  especially for first-time buyers.

And the heads of more than 500 companies of estate agents, chartered surveyors and solicitors have written to Housing Minister Yvette Cooper calling on her to cancel plans to introduce the home information packs (HIPS).

The O P D M is introducing Home Information Packs (hips) as a way of speeding up the process of buying a house and cut down on gazumping. From June 2007 vendors will have to produce Home Information Pack (hip) containing information about the property including a Home Condition Report and details of local authority searches and any guarantees that relate to the property.

But critics have pointed out that many delays are caused by solicitors, which the introduction of HIPS will do nothing to solve. And far from preventing gazumping, a determined buyer prepared to accept the Home Condition Report in a HIP, rather than commissioning his own survey, could jump in ahead of someone still checking out the property.

Others, including the Council of Mortgage Lenders, have warned that Home Information Packs (Hips) could dislocate the property market precipitating a flood of properties on the market prior to the introduction of HIPS, followed by a famine when sellers have to find the cost of Home Information Packs (Hips) before putting their property on the market. The government's own figures show that Home Information Packs (Hips) will cost an estimated £700 to £1,000 to produce.

The group of 500 estate agents, chartered surveyors and others have warned Yvette Cooper that the introduction of HIPS could lead to a 30 percent reduction in the number of properties put up for sale each year and could cause massive house price inflation.

A survey by National Association of Estate Agents of 1,295 adults, both homeowners and those looking to buy, reveals that only 4.5 percent of respondents felt paying more than 500 pounds to compile a HIP was reasonable. And 39 percent of all homeowners surveyed believed the HIP should cost nothing at all. "The government claims the Home Information Pack (Hip) will be cost neutral," said Peter Bolton King of the NAEA. "However this cannot be the case when only 20 percent of buyers currently bother with any form of survey. With over one-third of respondents stating that they should not have to pay a penny to put a HIP together, it is clear that many people are concerned about this additional cost." The survey also showed that consumers are anxious about the delay between putting their property on the market and the production of the Home Information Pack (Hip). A majority believe that this will affect the marketing of the property.

Some 73 percent of homeowners said they would think twice about selling as a result of the cost and delay caused by Home Information Pack. There is big concern too amongst sellers that they will have to pay for the Home Information Pack whether or not the property sells.
"One of the biggest concerns the NAEA has about the introduction of Hips is that it will have a negative impact on the supply of property coming on to the market. A very real consequence of this could be an increase in property values, which would further stunt the growth of the housing market," said Bolton King.

The Conservatives' call for a rethink on Home Information Packs is backed by Philip Davies, chief executive of Linden Homes. "The Tories recognise that we are heading towards disaster with the introduction of HIPS, possibly one of the government's worst ever ideas concerning property.

"They will result in nothing more than a completely unnecessary new expense for people selling their homes, who already face a barrage of costs. The information they will provide is already available to most purchasers, but now the process of compiling a Home Information Pack will simply serve to delay the process by a further two weeks at least, strangling the property market even further in red tape. First time buyers in particular will suffer when the vendor attempts to recoup the cost of his Home Information Packs through the sale price," Davies says.