Will the Criteria for HIPs Change?

Home Information Packs have had a chequered history. Designed to speed up the house buying process and make it more secure, the criteria for HIPs have shifted as the packs have come under fire from a range of critics within the housing industry and the Opposition.

Home Information Packs were announced in the Queen's Speech in November 2003, although the Labour Party manifesto in 1997 discussed how it would formulate legislation to tackle gazumping.

In March 2006 the Government gave the go-ahead for multiple certification schemes. In June 2006 draft regulations set out the detailed contents of HIPs and methods of enforcement.

According to the Government, the packs would bring together valuable information at the start of the house buying process, such as sale statements, local searches and evidence of title, which would save consumers money, time and stress.

Changing Deadlines

Originally HIPs were supposed to become compulsory from June 1 2007 but just 10 days before that date, communities secretary Ruth Kelly announced that they would be phased in from August 2007, initially only applying to properties with four or more bedrooms. This was extended to cover homes with three or more bedrooms from September 10. On November 22 housing minister Yvette Cooper announced that the packs would be rolled out to one and two-bedroom properties from December 14.

In the beginning, the packs were supposed to contain compulsory Home Condition Reports and Energy Performance Certificates. The former would detail the general condition of properties in jargon-free terms and the latter would indicate their energy efficiency.

The intention was that HCRs would make buyers aware of problems with properties from the start, avoiding such details becoming apparent later in the process that could potentially delay sales or cause their abandonment. In turn, EPCs would save consumers money by conserving energy while helping the UK meet European Union sustainability targets.

But although EPCs survived, the mandatory inclusion of HCRs was thanks to determined lobbying as HIPs ran into trouble with the very industry they were supposed to help.

Legal Proceedings

On 15 May 2007 the Royal Institution of Chartered Surveyors started legal proceedings against the Department for Communities and Local Government for failing to carry out a full consultation ahead of the introduction of HIPs.

The mortgage industry feared that the upfront costs of the packs would put consumers off, a charge the Government denied. The National Association of Estate Agents said that HIPs were unnecessary, did not deal with the main reasons why home sales and purchases fell through and were too expensive.

And the industry received support from the Opposition as the Conservative Party, sensing political capital in the HIP debate, launched an attack on the packs, which it branded as expensive and deficient red tape. Tory opposition to HIPs was instrumental in a defeat of the Government in the House of Lords, where peers voted by 186 to 160 in favour of abandoning the packs.

The future of HIPs remains unclear. In a recent Parliamentary debate, housing minister Margaret Beckett damned the packs with faint praise, describing them as failing to fulfill their potential.

With the meltdown in the mortgage market and the wider economy continuing apace, the packs may be abandoned in an effort to kick-start sales. The longer the recession continues, the more likely it is that HIPs will be scrapped.