The government has announced the timetable for the implementation of Home Information Packs (Hip) in order to ensure they are successfully launched on 1 June 2007.
Hips are viewed as a key part of the government’s programme of reforms in the housing market which also include plans for electronic conveyancing, improved search processes and an estate agents complaints body.
The Office of the Deputy Prime Minister (ODPM) says Hips will deliver transaction Improvements by reducing the abortive costs to consumers and the industry alike, as well as reducing the number of failed transactions caused by survey or valuation inspection findings.
It also argues Hips will lead to housing stock condition improvements by bringing about a reduction in the incidence of unexpected repair bills and encouraging better maintenance of homes in general. It argues they will create greater consumer choice by reducing the entry costs to first time buyers and creating a market of serious sellers.
According to government figures only between 20% and 30% of buyers carry out a survey at all and only 2% of buyers have a full structural survey carried out when buying a home. Nearly 30% of all transactions collapse after terms have been agreed and, says the government, 40% of these failed transactions collapse because of an unfavourable survey or valuation inspection, so property condition is a major reason for failure.
But critics say Hips will stifle the market, lead to much greater costs and mean it takes longer to sell a property. And the Conservative Party last week announced it would oppose the secondary legislation that has yet to go through Parliament to regulate Hips because, it says, they lead to greater costs to first-time buyers, not less.
The ODPM has countered saying first-time buyers will receive pack information free. It adds £140m is wasted each year in fees paid by first-time buyers on searches and surveys on properties where the sale then falls through. It says Hips will provide this information upfront.
Housing minister, Yvette Cooper says £1m a day is wasted on buying and selling homes in the UK with buyers often spending hundreds of pounds on valuations, legal advice and searches on sales that ultimately break down.
Cooper adds. "By providing key information at the beginning of the process, Home Information Packs will prevent waste and significantly cut the number of sales that fall through. That is why consumers groups have been calling for them for years."
A dedicated government Hip website is being launched in April 2006 at www.homeinformationpacks.gov.uk while stakeholders can register for free copies of the Hip Industry e-Newsletter at www.odpm.info/subscribe.cfm.
Meanwhile further information, including detailed questions and answers can be found at www.odpm.gov.uk/homeinformationpacks.
Key dates in the timetable to implementation include:
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].
What made financial headlines over the weekend?
Developed by industry-wide group
Joined in 2002
'Educate clients' children'
Raised £15m earlier this week