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Mooted return of HIPs under fire from industry

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Property experts have warned that a return of home information packs would be ill advised, amid renewed political interest in the topic.

HIPs were brought in by the Labour government in August 2007 to add transparency to the house-selling process but were scrapped by the Conservative government in 2010.

The packs came under fire for adding both cost and time to the transaction.

It is uncertain whether the current government would bring back HIPs if re-elected, although interest has been shown by the party’s top brass.

HIPs have been backed by housing minister Gavin Barwell, former minister Michael Gove and former chancellor George Osborne.

Last November, Barwell amended the housing and planning bill, now the Housing and Planning Act, to reintroduce the packs, but the amendment was later scrapped.

Osborne was rumoured to favour bringing back HIPs because they could be taxed.

Then last month during a BBC interview Gove said the Con­servatives would look at reintroducing HIPs.

However, contradicting Gove a Conservative Party spokesman has told Mortgage Strategy the party is not planning to bring back the packs.

Re-introducing HIPs in their old form in 2017 would be problematic, according to John Charcol senior technical manager Ray Boulger.

He says: “The biggest problem with them was the idea that you could expect buyers to rely on a valuation commissioned by the seller.”

Boulger explains that there is a conflict of interest in the HIPs and that untrustworthy surveyors could rig them to favour sellers.

He says: “While the majority of sellers will have no adverse intent, there will be some who will be familiar with the system, know a surveyor who may be a bit more malleable, and it’s the properties that are dodgy and have things covered up where that will happen.”

Any plan to bring back the HIP is also criticised by the Royal Institution of Chartered Surveyors.

Rics parliamentary affairs manager Lewis Johnston says: “We think what they set out to achieve was an entirely laudable aim, to create more transparency and visibility in the homebuying process.

“But in practice it was felt the HIP sometimes created an extra burden. It was divisive in terms of the ben­efit and value it added to the process.

“So resurrecting those in the form that they were is something we would be very cautious on. It would be a blunt way to achieve the things they were trying to achieve in the first place.”

Capital Economics also says bringing back the old style of HIP would be pointless.

The company’s chief property economist, Ed Stansfield, says: “Supposing they go ahead, I think there’s a strong onus on the Government to demonstrate why, considering the previous attempt to do this kind of thing didn’t seem to be a success.

“Nobody seemed to value them, so what’s going to be in these packs that will make them any better than previously?”

Stansfield adds that the Gov­ernment would also need to reassure property professionals that HIPs would not be cancelled once more. He says: “How are they going to persuade anybody who previously trained up to provide these reports that, actually, they are not going to pull the plug on them like they did last time, and leave people high and dry?”

However, the National Asso­ciation of Estate Agents is open to the idea of HIPs being brought back.

NAEA Propertymark chief executive Mark Hayward says: “We definitely need something to radically reform the housebuying process and improve it for buyers and sellers alike. [We are] consulting with members on this at the moment.

“It’s not just about home information packs, though; there are other options as big as these that should all be considered.”

But a reformed HIP system could benefit the mortgage market, Boulger adds.

He says: “Some of the other bits made a lot of sense.

“Getting information in advance on details of the lease, for example, and any other certificates that were required, that’s got to be done anyway so there’s no reason that can’t be done in advance.

“But I would stop short of requiring the property to be valued.”

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