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HIPs suspended with immediate effect

Communities Secretary Eric Pickles and Housing Minister Grant Shapps today announced that with immediate effect, they are suspending the requirement for homeowners to provide a Home Information Pack when selling their homes.

Pickles today laid an Order suspending HIPs in England and Wales with immediate effect, pending primary legislation for a permanent abolition.

The Secretary of State says he has taken this swift action in order to avoid uncertainty and prevent a slump in an already fragile housing market.

He believes HIPs are currently holding back the housing market because sellers are having to fork-out extra cash, sometimes hundreds of pounds, just to be able to put their home up for sale.

The government believes suspending HIPs will reduce the cost of selling a home, remove a layer of regulation from the process and provide a welcome help to the housing market during the recovery.

Sellers will still be required to commission, but won’t need to have received, an EPC before marketing their property, and the government will consider how the EPC can play its part in the new drive for a low carbon and eco-friendly economy.

Pickles says: “The expensive and unnecessary Home Information Pack has increased the cost and hassle of selling homes and is stifling a fragile housing market.

“That’s why I am taking emergency action to suspend the HIP, bringing down the cost of selling a home and removing unnecessary regulation from the home buying process.

“This swift and decisive action will send a strong message to the fragile housing market and prevent uncertainty for both home sellers and buyers.

“HIPs are history. This action will encourage sellers back into the market, and help the market as a whole and the economy recover.”

Housing minister, Shapps, says: “This is a great example of how this new government is getting straight down to work by cutting away pointless red-tape that is strangling the market. Rather than shelling out hundreds of pounds for nothing in return we’re stripping away bureaucracy and letting home owners sell their properties.

“But we’re also showing our commitment to a greener housing market by keeping Energy Performance Certificates and making them more relevant in helping buyers make informed decisions on the energy costs of their new home.”

David Smith, senior partner at Carter Jonas, says: “In 1997, Tony Blair announced that he was going to remove the uncertainty in the house buying process and introduced the Home Information Pack. It’s now 13 years on and the same level of uncertainty exists so HIPs, very clearly, were not the answer.

“The estate agency process still needs to be radically overhauled and bringing it in line with Scotland and Northern Ireland, where an offer is more binding, would be no bad thing.

“We need to remove the extreme uncertainty and emotional drain that surrounds house buying and selling. It needs to be simpler, more transparent and considerably less stressful.”

Mike Ockenden, director general of AHIPP, says: “We are hugely disappointed to hear that Grant Shapps has reneged on his promise to review the packs before any other action was taken. Over 3,000 jobs will go and 10,000 will be affected as a result of the suspension of HIPs and £100m revenue will be lost to the Treasury in VAT receipts.

“However, 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.

“We have been proposing for months that a legal or exchange ready pack be instructed at the start of the sales process. We think it would be crazy to throw the baby out with the bathwater and remove at a stroke all the good things that have come about with HIPs, and the lessons we have learnt.

“If we do this, then the opportunity for reform will have been lost for a generation.”

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DEAN JONES, HEAD, PAALEADS.COM

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  • j SAMAS 15th June 2010 at 8:35 am

    Sarah Smith | 20 May 2010 11:16 am
    how wrong can you be! Of course HIPS exist in Scotland ! it just hasn’t been suspended in Scotland – so we’re still having to pay hundreds for this ridiculous pack

  • REBEKAH WELCH 7th June 2010 at 10:28 pm

    please can you tell me if there is any way of claiming back the money for a hip pack that we purchased 6months ago?

  • J Haynes 24th May 2010 at 11:50 am

    Where do I stand…paid for a HIPS over the phone at 5pm on 20th May, hear about suspension on 21st May, no reply from supplier. Managed to make contact today and is reluctant to make a refund of my £350 !

  • James 21st May 2010 at 9:39 pm

    HIPS in principable were a good idea. They should of had to include the home condition report aswell. Now you will hundreds of people wasting time putting there house on the market just so they can see what they can get for it with out the intent to sale.
    Does anyone know if there is anyway of claiming compensation for qualified or training home inspectors.

  • Nick Dyoss (TM Group) 21st May 2010 at 3:57 pm

    The introduction of HIPs has always been controversial and led to extra complexity in the housing market and ultimately increased costs for the end consumer. The industry has geared up to fulfil the legislative criteria and there will be a period of change. This announcement does mean that solicitors can regain control of the conveyancing process. Home sellers will also benefit from the solicitor’s experience and expertise as well as no upfront costs and sometimes having to duplicate searches when their property remains on the market for a long period.

  • Bobby 20th May 2010 at 3:54 pm

    In answer to the question of what help the hips providers will get from the Government about the loss of their professions. The answer is the same amount of help the estimated 25000, 70% of independant mortgage brokers lost who have lost their jobs in the last 2 years have been given.

    SQUAT.

  • Robin Banks 20th May 2010 at 3:53 pm

    Hips, good riddance…. red tape by a red political party.

    I bought a property in Austria, as the purchaser I had to make a written offer to the vendor, they had seven days to consider the offer and if they accepted it, it was binding on them and binding on me, what’s more simple than that ? and both parties are protected (no Spanish practices there!).

    The process then went along similar legal lines to what we have here, why do we over complicate everything here?

    Lets hope we see a new period of House of Commons Sense!

  • Duncan craig 20th May 2010 at 3:33 pm

    Although it has taken ove 5 weeks to get my HIP done… it still hasn’t full arrived as yet – I can see the advantage of disuading non-serious ‘sellors’ from the market thus making it more likely the house you go to see is actualy really for sale. Seems I have wasted £200 to get a farily flimsy ‘EPC’ report which frankly is just a ststement of how many energy saving bulbs and double glazed windows you have and whether or not your loft is insulated. That’s not beyond most buyers to check out themselves surely?

    As for making the buy/sell process less stressful, why not have something like the Portuguese system – buyer pays sellor a deposit on offer accetpance which he loses if he drops out later. Sellor has to pay buyer twice the deposit if he drops out later. Certainly encourages decisive action – slowed down sadly by beaurocratic red tape in Portugal but that need not be the case here??

  • J Jackson 20th May 2010 at 3:33 pm

    Energy Performance Certificates are a European Directive and not the Tories commitment to being”more green” so therefore have no choice but to keep them!
    What about all those people-at least 3000- who have lost jobs overnight??

  • Mike Fitzgerald 20th May 2010 at 2:50 pm

    The abolitian of HIPs is a good thing,They were brought in to speed up the house buying/selling process.If the previous goverment had only spoken to the broker community.The real problem was slow lenders and slow solicitors.Hopefully now that HIPs have been abandoned we will get back to th ereal problems in the buying process.

  • Michael B Gillis 20th May 2010 at 1:52 pm

    I wish they would do this with th FSA

  • steve1 20th May 2010 at 1:48 pm

    Great News and bang on the button with the timing, yes there will be people out of pocket but we still have EPCs which is another nice little earner, far less work involved and together with other new regs coming in to play the actual removal of HIPs will not cost any loss if the provider diversifies.Now we can just tell purchasers to change the light bulbs & un plug their mobile charger when not being used!!

  • Stuart Dunn 20th May 2010 at 12:07 pm

    I understand several of our contemparies have made a steady sideline from HIP sales and the estate agents often use the cost to effectively loophole the ‘no sale no fee’ agreement. The market could do with an injection of speculative vendors keen to test the market they have avoided due to the initial cost of the HIP. Fantastic to see swift and definate action from Mr Pickles.

  • Lee 20th May 2010 at 11:55 am

    …for goodness sakes Gerry 11.42, how long have you been advising on Mortgages? When HIPs were first muted at being introduced, the thinking then was that a valuation was going to be included, however this was withdrawn on the basis that it was unworkable, as the Lenders would not accept a valuation carried out by someone other than their own panelled Surveyor. Nothing has changed in that regard, so how would it work now…indeed its even worse now because valuations are so unreliable after as little as 3 months let alone the 6 that lenders seem to put as a deadline to their ‘life’

    So good riddence to HIP’s I say and before some other hair brained scheme is thought up by people who have no idea how to improve the house buying process, why not ask us on the frontline..!!

  • john townsend 20th May 2010 at 11:53 am

    At last a desivive judgement on a ridiculous piece of legislation, i feel sorry for those thaat trained to set them up but they were always a dead duck you have to listen to those in the industry we need encouragement not obstacles well done coilition

  • gerry 20th May 2010 at 11:42 am

    Its a shame that the new Govenment did not take the time to think about this before creating this new uncertainty. What about the poor souls on the market who have just paid for their HIP? You could have implemented the Scottish system where a mortgage valuation is included. This has actually helped the market here. The buyer then does not have to rely on a lenders own valuer surveying the property and down valuing at a cost to the buyer. This addition also makes the report worth paying for for the seller. I think there is now a danger of over supply flattening out property prices in the South.

  • Ballbag 20th May 2010 at 11:39 am

    A touch of common sense at last, just the EPC to do away with now. Let’s face it, when you buy a house it’s because you like it, not because it might cost you £50 a year less to run than a house you don’t like.

  • Lee 20th May 2010 at 11:22 am

    I heartily endorse the withdrawal of HIPs as this was an unnecessary cost to the seller and those carrying out the HIPs were never properly regulated to charge a reasonably fair and standard fee, indeed many Estate Agents used HIPs as a way of levering more money out of unsuspecting and vulnerable sellers as well as tieing the seller in to their company.

  • Dan McGeehan 20th May 2010 at 11:22 am

    All for making it easier to sell a property but have the new goverment not just put a good few peoples jobs on the line with this action. What if any help will they give to people employed in the HIPs industry.

  • Richard Wilson 20th May 2010 at 11:22 am

    What an excellent piece of ‘Joined up thinking’.

    Unlike anonymous at 11.01am

  • Steve Rodley 20th May 2010 at 11:21 am

    WHOOPEE…….

    But unfortunately there is no pleasing some people???

    We need a resurgence in the market place and the consequences will have to be dealt with…

  • salil chaudhari 20th May 2010 at 11:20 am

    A great HIP replacement. Now the housing market activity should start moving again with the proviso that the Coalitions’ drive to make Banks release more funds becomes more effective.
    I was never in favour of Hips or the EPC’s for that matter.
    Good riddance.

  • Sarah Smith 20th May 2010 at 11:16 am

    E&W only, HIPs don’t exist in Scotland. There is seperate legislation in Scotland which the Scottish Parliament have responsibility for. It is unlikely any changes will happen in Scotland.

  • John 20th May 2010 at 11:05 am

    Does this apply to Scotland or are we talking about England & Wales Only?

  • Julie Sheppard 20th May 2010 at 11:03 am

    Thank goodness, this was another Knee Jerk reaction from an incompetent govornment, a complete waste of time and money, implemented to raise cash for unscrupulous agents, they did not help with house sales at all and just put another burden on vendors when money was already tight.

  • Paul 20th May 2010 at 11:01 am

    HIPS were in theory a good idea but were never implemented properly. There is now a danger of over supply to the market as we will see people who may not really want to sell ‘testing the water’ so to speak. We need a stable market which is in danger of being undone by the removal of the very thing which held back so many potential sellers. There needs to be some middle ground somewhere in order to protect the purchaser from a vendor changing their minds. Of course this is always a possibility but al least a HIP gave an indication of intention to sell.

  • Lewis Greene 20th May 2010 at 10:55 am

    I think this is excellent. They should of never been put into place.

    Lewis S Greene
    S.G.L Resourcing Limited

  • colin 20th May 2010 at 10:54 am

    about tim too, such a complete waste of time, but its been a profitable source for many agents who have charged £200-£300 on top of the cost to them for unsavvy sellers……….thats a big chunk off the bottom line for some……