Home information packs to be axed

Communities Secretary Eric Pickles and Housing Minister Grant Shapps today announced that with immediate effect, they are suspending the requirement for homeowners to provide a Hom

Related topics:  Mortgages
Millie Dyson
20th May 2010
Mortgages
Mr Pickles today laid an Order suspending HIPs with immediate effect, pending primary legislation for a permanent abolition. The Secretary of State has taken this swift action in order to avoid uncertainty and prevent a slump in an already fragile housing market.

Today's announcement sends a clear message of encouragement to people thinking of selling their home that they can put it on the market with less cost and hassle. HIPs are currently holding back the housing market because sellers are having to fork-out extra cash, sometimes hundreds of pounds, just to be able to put their home up for sale.

Suspending HIPs will reduce the cost of selling a home, remove a layer of regulation from the process and provide a welcome help to the housing market during the recovery. It will also mean a saving for consumers to the tune of £870m over ten years, giving sellers more money in their pocket to spend in the wider economy.

Mr Pickles and Mr Shapps also said that the Government is determined to help people reduce their energy bills, improve our energy security and tackle climate change by increasing the energy efficiency of their homes.

Sellers will therefore still be required to commission, but won't need to have received, an EPC before marketing their property, and the Government will consider how the EPC can play its part in the new drive for a low carbon and eco-friendly economy.

Eric Pickles said:

"The expensive and unnecessary Home Information Pack has increased the cost and hassle of selling homes and is stifling a fragile housing market. That's why I am taking emergency action to suspend the HIP, bringing down the cost of selling a home and removing unnecessary regulation from the home buying process.

"This swift and decisive action will send a strong message to the fragile housing market and prevent uncertainty for both home sellers and buyers. HIPs are history. This action will encourage sellers back into the market, and help the market as a whole and the economy recover."

Today's move is part of delivering a key manifesto comment made by both parties in the new coalition Government. It will mean that sellers will no longer be told they have to buy a HIP before putting their home on the market, but they will now have the choice to provide one if they want to.

Housing Minister Grant Shapps said:

"This is a great example of how this new Government is getting straight down to work by cutting away pointless red-tape that is strangling the market. Rather than shelling out hundreds of pounds for nothing in return we're stripping away bureaucracy and letting home owners sell their properties.

"But we're also showing our commitment to a greener housing market by keeping Energy Performance Certificates and making them more relevant in helping buyers make informed decisions on the energy costs of their new home."

NAEA Chief Executive, Peter Bolton-King, comments:

"For those of us who have weathered the turbulent market conditions of the past year, the suspension of HIPs is very welcome news.

"It will be greeted enthusiastically by both the housing market and house buyers, few of whom have paid much attention to these pointless packs. It is also good news for sellers. They no longer need to shell out hundreds of pounds for a piece of pointless regulation that benefits no one.

"The NAEA has long campaigned for HIPs to be scrapped.  They have failed to benefit home buyers and actively discouraged sellers. The most recent market report from the NAEA shows that buyers and sellers have returned to the market in 2010 but this decisive policy change will offer further incentive to move.

"We can confidently predict that an end to electoral uncertainty and the abolition of HIPs will provide a substantial boost to the housing market."

Gillian Charlesworth, RICS Director of Communications said:

"HIPs have failed to address the significant problems in the home buying process they were originally supposed to tackle and RICS is pleased that one of the first acts of the new Government has been to clearly show their intention to abolish them.

"Taking a swift decision will have minimised the impact on the market and ensured that estate agents who stick to the rules will not lose out.

"The Government must now use this opportunity to move on positive discussions about improving the home buying process working closely with the industry and professional bodies that have already done a lot of work on this issue.

"There is now the opportunity to start again with a clean slate and come up with innovative proposals to reform the system.

"Rather than seeing the announcement as the death of HIPs it should become the start of a new process that brings real change to people's experience of buying a home."

Andrew Hagger of Moneynet.co.uk comments:

"This is good news for the housing market, and particularly for sellers who have been forced to spend hundreds of pounds for a document that nobody really wanted and that few people will have bothered to read.

"The HIP was introduced three years ago with the idea that it would speed up the house buying process, but the reality is that it will have discouraged many potential sellers from putting their home on the market.

"With the housing and mortgage market in the doldrums, this move can only be viewed as positive.

"Grant Shapps said last November when he was shadow housing minister, that his party would abolish the controversial packs “in a matter of weeks” after coming to power and he's certainly been true to his word."

Mike Ocke
More like this
Subscribe
to our newsletter

Join a community of over 30,000 intermediaries and keep up-to-date with industry news and upcoming events via our newsletter.