Mortgage News HIPS Reform Could Help Boost The Housing Market 2124

HIPS reform could help boost the housing market

26 August 2008 / by Daniela Gieseler
Home Information Packs (HIPS) are slowing down property sales and impairing the house price slump, and should therefore be reformed or completely scrapped, the National Association of Estate Agents (NAEA) demands.

HIPS were introduced just over a year ago in order to simplify and speed up the home-buying process by gathering more of the information potential buyers would need before a potential sale.

However, they are unpopular with both the public and estate agents, and are heavily criticised for adding expenses and bureaucracy to property sales. The situation is now aggravated by the slump in mortgage approvals and buyer interest, and by the time the transaction finally takes place, the information provided is often out of date.

Reforming or suspending HIPS could therefore ease some of the pressure on sellers and contribute to bringing the housing market up to speed again, Peter Bolton King, chief executive of the NAEA says, urging the Government to take action:

“We have long seen HIPS as not fit for purpose and as the wrong answer to simplifying the house buying process. Quite simply, the government tried to force ‘square pegs into round holes’ and the slower property market is making this situation worse.”

He explained: “For instance, the current call for local searches to be conducted as part of a HIP is madness. Due to the length of time properties are on the market in the current climate, a majority of searches are now out of date by the time the property is sold, which means they have to be repeated at extra cost to the consumer.”

If the Government wanted to continue with HIPS, at least they should be reformed and only include useful information, Mr Bolton King postulated: “A simplified pack could include a sellers’ questionnaire, an Energy Performance Certificate (EPC), also reviewed to be fit for purpose, and the Land Registry title and plan.

“In times of economic hardship, let’s stop this ridiculous repeating of information and shameful waste of consumers’ money!”

The Royal Institution of Chartered Surveyors (RICS) also urged the Government to reform the packs: “One of the many things the Government needs to do to aid the failing housing market is to fundamentally reform HIPS to ensure that they are fit for purpose for all properties, in all market conditions.”

Referring to the legal searches, Gillian Charlesworth, director of external affairs, said: “These legal documents must be taken out of the packs and left to buyers and their advisers to obtain at the appropriate time during the transaction.”

© Fair Investment Company Ltd

Written by Editorial Team