A farewell to Hips
In keeping with the Conservative manifesto and the deregulating theme of the new coalition Government, they have suspended the controversial Home Information Packs (Hips). The Hips were introduced in 2007 in England and Wales with the aim of speeding up the house selling process by obliging sellers to provide much of the conveyancing information required when properties are first put up for sale.
The controversy came because the packs are paid for by sellers and therefore add several hundred pounds to the act of putting a house on the market.
The requirement for Hips will be suspended for anyone selling their home from 21 May, although the government will need to enact legislation to outlaw them completely.
The announcement was made by the government in its coalition document so represents Conservative policy the Lib Dems have signed up to as part of their role in the new regime.
The new Housing Minister has decided that the overly- bureaucratic and expensive Hips will be done away with, but in keeping with the green ambitions of the coalition parties an energy performance certificate will still be required.
An energy performance certificate ranking the energy efficiency of a home with an A to G rating will have to be produced by the seller within 28 days of putting a home on the market and costs approximately £60.
There are concerns by some analysts that the abolition of the requirement to provide a Hip will put further pressure on first time buyers because the cost of searching for the information previously contained in a Hip will now fall on purchasers.
However, analysts have long maintained that the packs, which cost on average £300 - £350, were stunting the housing market recovery, as they deterred people from putting their home on the market just to test the water.
As such, estate agents and others working in the house sales industry have welcomed the abolition.
The Royal Institution of Chartered Surveyors (Rics) responded to the news by claiming that Hips have failed to solve the problems they were originally designed to address and therefore welcoming their suspension.
The disadvantage of removing Hips, that they put more costs on first time buyers, is very real, but I think that this is outweighed by the benefits to the housing market of making it easier for people to put their homes on the market as a way of ‘testing the water’. In the current state of the UK housing market this boost is much needed.
