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HIPs are scrapped – cheers all round

publication date: May 25, 2010
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Grant Shapps
The Secretary of State for Communities and Local Government, Eric Pickles, has signed an order to suspend the mandatory requirement for Home Information Packs under Section 162 of the existing regulations, with effect from 21st May 2010.

Housing Minister Grant Shapps (pictured) put it more succinctly. "It’s needless red tape. Today the new government is ensuring that home information packs are history."

"By suspending home information packs, it means that home sellers will be able to get on with marketing their home without having to shell out hundreds of pounds upfront. We are committed to greener housing so from now on all that will be required will be a simple energy performance certificate (EPC)," he added.

The duty to provide an EPC falls on either the seller, in the case of a building being sold, or the landlord / letting agent, in the case of a building being rented. In the case of new buildings the duty to provide an EPC falls on the builder.

Estate agents will have to include energy information in written sales particulars, as was the case before the suspension of HIPs. They must do so as soon as the energy information becomes available. Enforcement of these requirements and financial penalties is the responsibility of Trading Standards Officers. However, following the suspension of HIPs, all EPCs will now be valid for 10 years.

Click for more infoHowever, EPCs will not keep the huge HIP industry going. The Association of Home Information Pack Providers (AHIPP) estimates that there are between 3,000 and 10,000 people whose livelihoods are either directly or indirectly dependent on HIPs.

"We want to work with the government and we still want the consultation we have been promised. We are not suggesting that HIPs should be retained. AHIPP has accepted that they will be scrapped," said Mike Ockenden, director general of AHIPP.

Shadow Housing Minister John Healey said, "The Tories have talked of little else but HIPs over the past few years, and this announcement merely highlights the limits of their ambition and concern - pleasing estate agents rather than supporting first-time buyers."

Gillian Charlesworth, of the Royal Institution of Chartered Surveyors (RICS), saw the move as positive. "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."

Fine & Country’s Chief Operating Officer Mike Bidwell said, "This announcement will be a shot in the arm for the property market. It brings to an end months of uncertainty about the future of Home Information Packs – which were not well-received by members of the public, who saw them as yet another unnecessary tax. We believe that good agents will continue to do all they can to help improve the home buying process, which we believe should be consumer-led. The scrapping of HIPs is a welcome move and we applaud the Government’s swift and decisive action."

John Heron, MD, Paragon Mortgages said, "The decision to suspend HIPs is a welcome move and long overdue. The original policy objective to improve the house purchase process was sound, but HIPs were simply the wrong vehicle. They added a new, expensive layer of bureaucracy and did the opposite of what they were intended to do".

Auction House Director Roger Lake said, "The end of Home Information Packs will be a major plus for the auctioneering industry. Auctions are often chosen for speed, with properties offered for sale at short notice. The need for a HIP before marketing can even get underway created a delay which meant some properties missed the date of the next scheduled sale. Homes being sold by private treaty are not up against the same time constraints. But the scrapping of HIPs should streamline the whole auction process and allow entries to be accepted closer to the auction date itself."