his week saw Home Information Packs (HIPs) debated in Parliament once again, although this time it wasn’t their creation and launch that created the controversy, but their existence.
Grant Shapps, Conservative MP for Welwyn and Hatfield, described HIPS as: “A half-baked law that is clumsy, ineffective and damaging to the housing market” and claimed that if “the country looking for a single policy that best encapsulates the government’s failure to listen, I suspect that home information packs would be in the running.”
An initial report came from the Royal Institution of Chartered Surveyors (RICS) which claimed that the introduction of HIPs had already led to a downturn in the market for both four and three bedroom homes.
Although with the initial introduction of HIPs there was a reported drop in the amount of four bedroom houses but a surge in three bedroom properties, there is some proof that HIPs affected the market initially, but had not seen a continued drop in sales.
With this criticism taken on board, it is another punch in the chest for the housing industry, particularly with Shapps referring to HIPs as one of the prime reasons for causing a downturn in the housing market for three and four bedroom homes.
Counter criticism
However, there was counter-criticism from the industry, with Dominic Toller, director of marketing and new business at LMS, saying that despite the lack of support from the Conservative Party, HIPs remain the largest positive change to the house buying process in a very long time.
He said: “Although we haven’t seen the full benefit of HIPs yet, once every property in a chain needs a HIP, we will see a substantial reduction in the number of days a transaction takes and a reduction in the number of aborted sales.
“It’s about time that HIPs stopped being blamed for the reduction in the number of properties on the market. These reductions were already happening throughout June and July, before the first phase of HIPs on 1 August which itself only affected 17 per cent of properties. The Tories and RICS need to start getting their facts right.”
There is plenty of defence for HIPs while politicians are critical, particularly with Shapps calling for HIPs to be scrapped and Energy Performance Certificates to be implemented separately; and asserts that ending Stamp Duty for first-time buyers up to £250,000 would do far more to help home buyers and sellers.
Contributing factors
Jeff Smith, chief executive of HIP Payment Services, claimed that there are many factors contributing to a possible downturn in the market, including the Northern Rock turmoil and the first run on a mortgage bank in living memory, and a perceived bubble in house prices has led to the majority of commentators pointing to an impending fall.
Smith said: “With the average house value at around £235,000, it is absurd to suggest that a cost of about £350 will have any great impact on the house selling process. RICS has consistently opposed the introduction of HIPs, and one can only question their motivation behind moves for any further opposition in the current climate.
“The HIPs motion has been debated at great length and been subject to judicial review over several months. Surely anything that needs to be said on the subject has already been said. With HIPs now required for three and four bedroom homes, any continued opposition at this stage would only serve to harm the one group that would most benefit from a roll out to one and two bedroom homes – first-time buyers. “Irrespective of today’s debate, I have every confidence that the Housing Minister will continue to hold firm and resist these latest, ludicrous claims.”
Provide opposition?
So with the Tories refusing to back HIPs and being outwardly critical of the concept, does this mean that the government will back HIPs to provide opposition? Considering that on the eve of their launch, Labour teamed up with a law firm to offer discounted packs for all its members, as part of its Labour Legal Services, and that HIPs were in the initial Labour Manifesto in 1997, it is likely to stick by the introduction through thick and thin.
Though Mike Ockenden, director general of the Association of Home Information Pack Providers claimed that the intention of HIPs was to ensure the home buying and selling process was more transparent which is likely to help first-time buyers in particular.
He said: “Currently, one in four transactions fail when purchasing a house, costing consumers £1 million per day and it seems strange that the Conservatives wish to continue this sorry state of affairs for buyers and sellers.”
Despite the constant knocks that HIPs receive, they seem to be standing up to demand and with an entry into a political battle; this criticism from the Conservatives may be enough to get the government to throw their weight behind them completely.
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