Plans by the government to roll out the final phase of home information packs (HIPs) in three weeks time has been met with dismay by sections of the property industry. Some claim it will force first-time-buyers to remain in the lettings market.

Housing Minister Yvette Cooper announced that the phased implementation of Home Information Packs (HIPs) will be extended to one and two bedroom properties. From the 14th December 2007 all residential properties being put up for sale will require a HIP. This latest announcement has come despite huge opposition from the industry and warnings that HIPs are seriously damaging the market.

Stewart Lilly, President at the National Association of Estate Agents (NAEA) said|: “We are extremely disappointed with the government’s latest news. It seems hell-bent on pressing ahead with these ludicrous plans, which it has been warned time and time again are not the answer.

“In the announcement today, the CLG made reference to an ‘independent report’ on HIPs which found ‘no evidence of impact on transactions or prices’. I would be very interested to see this report, as it directly contradicts our own findings and those by others in the industry. If the report is as positive as the government suggests, then why has a bigger deal not been made of these findings?

“The incompetence and irresponsibility of the government over HIPs seems to know no limits. Why can’t they admit they got it wrong and let us work with them to get things right?”

Christopher Lacy, the director of Savills responsible for HIPs, said: It is fortunate that a flicker of sanity has prevailed with the extension to 1st June 2008 of the ‘First Day’ marketing provisions and also the withdrawal of the need to include all the leasehold management information - apart from the actual lease - within a HIP.
“Without these provisions, HIPs from 1st January 2008 would have been hugely problematic for all parties.

The Royal Institution of Chartered Surveyors (RICS believes the full introduction of HIPs will wipe 300,000 properties of estate agents books as home owners balk at the idea of paying £300-£500 just to get an idea of what price their property could fetch in the current market. This will increased demand, causing house prices to inflate well beyond affordability, pushing first time buyers further out of the market.

RICS spokesperson, Jeremy Leaf, said: “With prospective buyers and sellers currently taking a ‘wait and see’ approach to moving, activity in the housing market is grinding to a halt. The Housing Minister needs to understand that rolling HIPs out to one and two bed properties could find first-time-buyers caught between a rock and a hard place.

“Lack of smaller properties for purchase will force first-time-buyers to remain in the lettings market where rents are already climbing at the fastest pace in over eight years.”

The announcement has been strongly welcomed by the Association of Home Information Pack Providers (AHIPP), which has been calling on Government to extend the rollout of packs across the market, since the required number of energy assessors was achieved back in September.

Paul Broadhead, Deputy Director General, AHIPP said: “The final phase of the rollout will be gratefully received by our members who were beginning to feel the pressure following the Government’s recent delay.

“The independent research by Europe Economics dispels suggestions by RICS and NAEA that HIPs are having a detrimental impact on the market place. Continued mis-information has contributed to the delay and has resulted in fewer energy efficiency measures being introduced by homeowners.

“HIPs are here to stay. By working together with the wider industry we can now build upon this foundation and really revolutionise the market for the benefit of the consumer and the industry. In addition, we can also start to significantly improve the energy efficiency of our homes.”

Tim Barton, a partner at property specialists Dreweatt Neate, said: “Two things were predictable about the announcement introducing HIPs for all residential property transactions. The first was that the announcement would come and the second was lots of people in the industry would complain instead of deal with it.

“One of the arguments against HIPs has been that they will slow the supply of property to the market. That’s not the case at all. If people are serious about selling, they will do it whether or not they need a HIP.

“So far, very few prospective buyers have asked to see a HIP, which is more a result of ignorance than HIPs being a waste of time. As time passes and awareness grows, so will the requests to see the HIP for a property. It doesn’t help that at present maybe half the properties for sale don’t need a HIP because they were being actively marketed before the legislation was introduced. But again that will change.

“I would also like to see lawyers and other professionals making more use of the information contained in HIPs. Very few, whether acting for vendor or purchaser, ask to see a copy so searches are still being wastefully duplicated.

“The principle of having more information up front has to be a good one and a move to the eventual reinstatement of the Home Condition Report must be the right course once the HIP system is running smoothly.
“Reform of the system is long overdue, and as we have started we should make sure we finish the job.”