Bye Bye HIPs
HIPs – otherwise known as Home Information Packs – are no more. The government has finally scrapped this completely useless piece of legislation, which has cost home sellers a small fortune since it was introduced in 2007.
HIPs were initially promoted as a way of reducing the time it takes to complete a property transaction, but it was proved they utterly failed in this objective and were derided by homeowners, estate agents and surveyors up and down the country. The previous government failed to listen to professionals in the industry, but the new coalition has acted quickly to abolish HIPs once and for all. Sellers can breathe a sigh of relief, knowing that if they put their property on the market today, they will save themselves something up to around £500 upfront on what it would have cost when HIPs were in place a short while ago.
In the short-term, HIPs have been suspended (May 2010). This is until such time as primary legislation can be introduced to abolish them completely.
One of the greatest criticisms of HIPs were they cost the seller from the first day of marketing, even though the property being advertised for sale might never actually succeed in being sold. Even worse, they failed to achieve any significant reduction in the time it takes for a property sale to complete. In confirming the abolition, ministers suggested the change would save consumers £870 million over the next 10 years. Others have said this action could help support a housing market revival, as more sellers are likely to return their properties to the open sales arena without the threat of being financially stung for doing so.
The legislative process that brought HIPs into existence has cost taxpayers an absolute fortune. The consultation period was long and chaotic and the pack itself underwent several transformations before finally being introduced. The ill-fated Home Condition Survey was eventually abolished, but only after government was forced to listen to commonsense by those operating in the property sale and investment markets.
One of the reasons that government wanted to bring HIPs into being in the first place was because they had already agreed, through European legislative commitments, to introduce energy performance certificates into the property sale process. While they may have abolished HIPs, they cannot get rid of the EPC, otherwise they will be contravening European law. Sellers will therefore still require an EPC when they put their home on the open market.
The Cost of Abolishing HIPs
A huge supply industry has developed since the introduction of HIPs in 2007. The Association of Home Pack Providers says more than 3,000 jobs will disappear and another 10,000 will be affected with the loss of this arm of the property selling business. HIP inspectors were hoping government might allow them to continue to supply the EPC in compensation for their immediate loss of earnings – but it seems far more likely the EPC will actually be provided by utility companies.
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