I See No HIPs!

Landowners sidestepped the Window Tax of 1696 by bricking up windows. Could HIPs face the same fate given that water-down packs are about as effective as windows without glass?

It is often said that a man's home is his castle. So it comes as little surprise that drawbridges are raised and moats are filled when people believe their homes are under threat.

At the moment, many homeowners feel intimidated by the looming introduction of Home Information Packs (HIPs), and rightly so. It is natural to be mistrustful of change, but consumer concerns have not been allayed by the erratic behaviour of ministers put in charge of the rollout of HIPs.

Without question, the introduction of HIPs has been a fiasco. It has also been deeply embarrassing for the Government, which has spent ten year hatching the scheme, yet managed to crack under the weight of protest just two week before launch.

As it stands, HIPs will now be foisted onto home sellers on 1 August instead of 1 June. Bafflingly, though, not everyone will have to comply. From August, only sellers of houses with four or more bedrooms are required to commission HIPs, which has raised interesting questions as to when is a bedroom not a bedroom.

"New and improved HIPs" will also not include the all-important Home Condition Report, which was originally touted as a vital document to expedite the home-buying process. Instead, Energy Performance Certificates, which will do little to aid the process, have now been flagged up as key document in the packs.

We discussed the disastrous roll-out of HIPs with Mike Ockenden, Director General of the Association of Home Information Pack Providers. Speaking frankly on the Motley Fool's Money Talk podcast, he said, "If you put twelve of the best business minds in a room and gave them a week to come up with the most flawed way of implementing a policy, you could not have come up something this good!"

Nevertheless, Mike Ockenden still believes that HIPs can help remove the stumbling blocks that often cause house sales to fall through. But without a Home Condition Report, HIPs are about as effective as windows without glass, which is, perhaps, strikingly relevant given the fate of the ill-consider Window Tax of 1696.

That said, King William III's Window Tax morphed over time into what we know today as the Council Tax. By inference, there is every likelihood that HIPs, if launched, may also evolve from its present anorexic form into a hefty tome packed with various documents.

However, consumers need to be aware, as Mike Ockenden pointed out, of mis-selling. The launch of any new product can be rich pickings for unscrupulous and over-zealous pack providers. Therefore, home seller should stick with companies that display the approved HIP code logo.

After talking to Mike Ockenden, I can appreciate why he is a strong advocate of Home Information Packs. But he and I part company over the need for heavy-handed legislation to impose what are effectively a costly marketing documents onto consumers when it should be up to the free market to decide.

Our lawmakers still have a lot to learn, and they may want to start with the First Law of Holes, namely, when you find yourself in one - STOP DIGGING! And it's thanks to their clumsiness that I fear HIPs, which could have been a useful document, may never see the light of day!

> Listen To Mike Ockenden talking frankly about HIPs on Money Talk.