The government has U-turned yet again by delaying the introduction of home information packs. Oops!
After months of lobbying from firms involved in the housing market, the government has backed down once more by deciding to delay the introduction of Home Information Packs, alias HIPs.
In theory, by including essential details about a property for sale, HIPs are supposed to make the home-buying process easier, faster and more transparent for both buyer and seller. One obvious benefit of having a HIP is that potential buyers all have access to the same information without charge, which cuts down on unnecessary and wasteful spending.
Originally, the government also wanted a Home Condition Report (a property survey), but this requirement was scrapped last June following protests by mortgage lenders. Nevertheless, a typical HIP is expected to cost the seller roughly £500, although wily estate agents could charge as much as £1,000+ a pop.
As things stand at the moment, a home information pack should contain evidence of ownership ('title'); local authority searches; planning, listed building and building regulations and consents; guarantees for any work done; plus an energy-efficiency assessment known as an energy performance certificate.
The government first started kicking around the idea of a "seller's pack" for domestic properties a decade ago, but this idea really started to take shape following the Housing Act of 2004. However, there has been a major backlash against HIPs from a wide variety of critics, with the fiercest opposition coming from the property industry itself.
Indeed, the Royal Institution of Chartered Surveyors (RICS) last week asked for a judicial review into the government's handling of the introduction of HIPs. Furthermore, a House of Lords report at the beginning of this month questioned whether HIPs were 'either sensible or worthwhile'.
Despite this opposition, HIPs were all set to be introduced in nine days' time on 1 June. However, Communities Secretary Ruth Kelly this afternoon announced that the launch date will be delayed until 1 August. After this date, HIPs will be phased in over a period of time, beginning with four-bedroom and larger homes.
Given the successful legal challenge from RICS, and the fact that members of the House of Lords were set to vote later today on a Conservative-sponsored motion to halt Hips, Ms Kelly was caught between a rock and a hard place. Alas, with only 520 fully trained energy assessors out of a total requirement of over three thousand, the headlong rush to introduce HIPs was a disaster waiting to happen.
As for the the impact on the housing market, it's unclear what effect the delayed launch of HIPs will have. I've read arguments that the introduction of HIPs will cause house prices to rise still further, because the number of sellers who are simply 'trying their luck' will fall, reducing supply.
On the other hand, some commentators believe that HIPs will be the straw that breaks the camel's back, coming on top of four rises in the Bank of England's base rate since last August. Who knows? We'll just have to wait and see.
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