The Government has set the date for the compulsory implementation of Home Information Packs for June 1 2007.
The Council of Mortgage Lenders though says it is disappointed with this timing, as it risks creating disproportionate disruption during the housing market busy period of spring and summer.
The CML has been working extensively with the Government towards an orderly implementation of the new HIP regime, and wants to continue to do so, but is concerned that the Government has rejected industry advice that the period between October 2007 and January 2008 would be the best time to make the new system go live.
The CML recognises that the Government has a long-standing commitment to the introduction of HIPs, and that it had previously announced an early-2007 implementation date.
The Government has now rightly recognised that the large amount of work that remains to be done before HIPs can be implemented cannot be achieved in this timescale – although it says even June 2007 is a tight timetable to achieve the technological and systems changes that will be needed.
However, the CML says in moving the date to June the Government may be creating a different problem, as this will coincide with the housing market busy period, and could result in some unwelcome effects during the transition to the new regime.
The cost of the packs is widely estimated to be up to 1,000. On the basis of previous market interventions, it seems likely that a number of people will bring forward their attempts to sell their homes to before the compulsory deadline to try to save money, creating a “spike” in properties
put up for sale immediately before the implementation date.
To minimise the effect of this, the CML believes that it would have been better to choose an implementation date when the market is quieter and more able to cope.
However, the CML will now seek to work with Government and the industry to identify ways in which this problem can be managed.
The CML now asks the Government to:
* Publish a detailed timetable on the planned stages for implementation, so that the entire market has transparency and can work to achieve clearly understood deadlines.
* Work with the industry to examine the potential transitional market impacts of the planned date and agree a plan to mitigate these.
Peter Williams, deputy director general at the CML, says: “Despite being disappointed with a summer implementation date, the CML will now be looking to work closely with the Government and industry to mitigate any negative effects and make the transition to HIPs as smooth as possible.
“It is now essential that a detailed timetable is published and met at every stage, so that Government, industry and consumers can be certain about when the changes will affect them.”