Housing minister, Yvette Cooper, has revealed that Home Information Packs (Hips) will applied to one and two bedroom properties in England and Wales from December 14. This has sparked fears that fewer people will be prepared to sell smaller properties, adding to the plight of first-time buyers struggling to find the bottom rung of the property ladder.
The controversial Hips were put in place on August 1 for four bedroom properties and September 10 for three bedroom properties, costing between £300 and £400 on average. Ms Cooper suggested that the move would be particularly good news for first-time buyers; however, some are concerned it will be the exact opposite. "If the housing minister genuinely wants to improve the plight of first-time buyers, she should not continue with this flawed policy," said Rics spokesperson Jeremy Leaf.
By introducing Hips, the Government hopes to speed up the house-buying process by giving potential buyers more information upfront. But many are concerned that the number of properties put up for sale will fall, ultimately leading to higher prices. "Rolling Hips out to one and two-bed properties could find first-time buyers caught between a rock and a hard place as accessibility to the market would go off the scale," said Mr Leaf.
Shadow housing minister, Grant Shapps, also criticised the decision, believing it will make buying houses "more costly and bureaucratic". "Rather than burdening people with yet more red tape, Gordon Brown should have the courage to abolish what is widely regarded as a flawed and ineffective law," he said.
President at the National Association of Estate Agents (NAEA), Stewart Lilly, added to the debate. "What about first time sellers?" he asked, "They are already faced with huge expenses as they trade up, most notably surrounding stamp duty. The cost of a HIP on top of this is an unfair and unnecessary extra. The other point to consider is that if first time sellers stay out of the market reducing the supply of more affordable properties available, then the situation will be even worse for first-time buyers than it is at the moment."
The Association of Hip Providers (AHIPP) defended the extension of Hips to smaller properties. "The independent research by Europe Economics dispels suggestions by RICS and NAEA that Hips are having a detrimental impact on the market place," said deputy director general, Paul Broadhead. "Hips are here to stay. We can now build upon this foundation and really revolutionise the market for the benefit of the consumer and the industry," he added.
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