After a year of anticipation over one of the most controversial parts of the Labour government’s plans for the housing market, Home Information Packs (HIPs) were eventually launched in their full capacity in 2007.
Although initial setbacks caused HIPs to be introduced for properties with four bedrooms or more only from 1 August, and for three-bedroom properties from 10 September, the final roll-out of the packs to all properties was confirmed on 14 December.
A long story
However, the story of HIPs is a long and winding one. It was introduced in Labour’s 1997 manifesto as a proposal to avoid gazumping in the purchase market, with an eye on similar practices in Australia and Denmark. When they were further announced in the Queen’s Speech at the State opening of Parliament in November 2003, it seemed that a fresh burst of life was being breathed back into the concept, but it took a further three years before draft regulations were completed.
The initial date for roll-out – June 1 2007 – was postponed at the last minute by Communities Secretary, Ruth Kelly, who pushed the date back to 1 August, and only for the larger properties. Despite all of these setbacks, HIPs finally made their long-awaited but much maligned appearance in 2007 and in 2008 they will be an integral part of almost all house sales.
No sitting on the fence
So what has been the industry reaction to the news that 2008 will be ‘the year of the HIP’? As expected, there is very little in terms of fence-sitting on how to welcome the new addition, with most either choosing to welcome them with open arms or shun them completely.
The comments heard around the launch varied from the positive to the negative. Gerard Buckley, chief executive of OpenBook, said that the introduction would see improvements to the homebuying process. He said: “We are now looking forward to a point in the near future at which all consumers will ask to see the HIP before making an offer on a property.”
On a more negative note however, Warren Bright, chief executive of propertyfinder.com, commented: “HIPs have put the wind up sellers of smaller homes. A HIP is a big extra cost on a lower value home and it’s no surprise that sellers are rushing to beat the deadline.
"Unfortunately, a glut of supply at a traditionally slow time of year could force them to accept lower offers than they would otherwise have done, so they may still lose out.”
Looking forward
Looking forward to 2008, opinions are varied on what sort of an impact HIPs will have on the market. Stephen Hayter, sales and marketing director at My Home Move, comments: “As with all the HIPs transitions so far, this final roll-out is likely to have a slow start.
This is exaggerated by the fact that it has come at a traditionally quiet time of year – although the usual balance was slightly tipped by the rush of people putting their property on the market before the 14 December launch date.
“Realistically it will be February or March before we see a return to a normal market. HIPs will be well and truly established by then and ultimately everyone in the housing industry will just have to get on with it.”
Meanwhile Peter Bolton King, chief executive at the National Association of Estate Agents, claims that the first few months will be a telling time. He says: “We’ll start to see the impact of the roll-out early in the year when the market traditionally should pick up again after the Christmas break. I am really hoping that we don’t see instructions negatively affected by the final phase launch in the same way that they have been by phases one and two.
“We continue to maintain that the government should have waited before implementing the roll-out. There was not even enough time to properly analyse the effect of the first two phases before the final phase was launched. How could the government presume to proceed with HIPs in the light of this fact? We have also yet to see the results of the HIPs area trials.”
With the wait over and 2008 seeing a new dawn for buyers and sellers, as well as lenders, brokers and other industry professionals we will be forced to wait several months to assess the impact of the launch of HIPs.
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