Cicero Policy Briefer

Issue 1, June 2006

Getting hip to HIPs

By Roger Harding

Increasingly there’s less and less excuse for not knowing what a HIP is. The volume on the subject has picked up considerably over the last two months and this certainly looks set to continue. The Government, along with Which?, continues to promote and defend a policy they see as the key to reducing the time and costs involved in the home buying process, which in turn they hope will reduce the likelihood of gazumping.

The Conservatives have gone on the parliamentary and media offensive, concerned about the market impact, increased costs and the chance of sufficient home inspectors being trained in time – to such a degree that they have pledged to abolish the scheme when next in power. Andrew Stunell MP, the Liberal Democrats’ new chief housing spokesperson, has remained reasonably quiet on this issue, perhaps highlighting a more maligned view on the subject than was the case for his two predecessors.

As the DCLG (the post-Prescott ODPM) website recognises, the main concern of industry is that the procedures being used to test the impact of HIPs are not sufficient.

For those not yet introduced, Home Information Packs are a long standing Labour policy commitment, set for introduction in June 2007. From that date it will be compulsory for each homeowner marketing their property for sale to produce a pack containing local searches, an energy efficiency report (akin to the A/B/C/D/E ratings you currently see on new white goods) and a home condition report (a kind of basic survey).

The DCLG is about to launch its dry run this summer, allowing HIPs to be voluntarily available to those willing to pay for them. The DCLG argues that this is sufficient, as the dry run is aimed at ensuring that the procedures and systems set up for their delivery are fully functioning and checking whether any changes are therefore needed to the Government regulations.

Many within the housing and mortgage industry would rather they made the dry run compulsory in one area of the country, to allow themselves and the Government to further assess the impact on the market and therefore the wider economy. The Government has not ruled out such a pilot, but as we reach the 12-month mark before implementation, time is running short.

However, we wouldn’t expect the volume to lessen as we approach the summer recess. The DCLG is due to publish its Draft Regulations and commence the dry run this month and to complement this, the public awareness campaign will have to begin soon. The Conservatives are sure to use each opportunity to restate their case, and we have already seen media interest in the topic rise. The question is whether the Conservatives will wish they had left this issue well alone, or whether the DCLG will wish Prescott had taken more than just the Departmental name with him when he left.

Roger Harding can be contacted on +44 (0)20 7665 9536 or click here to email.