Thursday, 11 September 2008

HIPS will go - but when...

The Conservatives are in the press again today calling on ministers to suspend Home Information Packs to help boost the housing market (see But the DCLG publicly states that "We have absolutely no plans to suspend HIPs". What is the real position?

Well my mole tells me that HIPS will go, the only question is when. They are likely to be replaced by just the energy efficiency element, and hopefully before the end of this Parliament. The demise of HIPS had been predicted as being announced with the recent announcement on the reduction in Stamp Duty, but it would appear that the government bottled out of this.

Based on the information I've heard I am currently predicting an announcement by the end of this financial year - as house sale volumes continue to drop through the winter, and house price falls increase to over 15%, I expect the Government to use such an announcement, in part, as a second (third?) step to help the housing market.

Will it make any difference to the housing market? - of course not (and many house sellers are already ignoring the requirement for a HIP any rate).
Will it increase the financial pressure on Personal Search Companies? - (if many remain by next year) absolutely - so it may bring a smile to the faces of those in Local Government who have seen severe drops in their revenue from Official Searches (even though they will see a drop in their own revenue as a result).
Is it right to get rid of HIPS? - my view is absolutely yes - if they had included a full survey that purchasers and their lenders had accepted, they might have worked - as they are now without full surveys and (in many cases) a non-official search they are almost worthless, and just an indirect tax on house sellers.

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