MPs call for home information packs delay

Friday, 26 May 2006 12:00 AM

Estate agents have welcomed calls by opposition MPs for home information packs (HIPs) to be delayed or cancelled.

Conservative shadow housing minister Michael Gove says the delay is necessary "to protect the stability of the housing market".

In an early day motion signed by 43 other MPs, Mr Gove warns that home information packs will add up to £1,000 to the cost of buying an average home, while duplicating the ongoing need for a valuation or structural survey.

The move has been welcomed by the National Association of Estate Agents (NAEA), which described the motion as a "step in the right direction".

The packs, which will become compulsory for anyone selling a house from June 1st 2007, will also discourage people from putting their homes on the market, Mr Gove argues.

All homeowners wanting to sell their home will have to pay up to £1,000 for a pack, which will contain information on their property including a home condition report, prior to putting it onto the market.

According to the government, the introduction of home information packs will help to reduce the £1 million wasted every day by sales falling through by providing information up front to buyers on the condition of the home they wish to buy.

But MPs, including two respected Labour backbenchers, believe the government will benefit from "a potential £110 million VAT windfall from the packs" and that the home condition register, on which the condition of each home will be recorded, "could be used to conduct a council tax revaluation by stealth".

A dry-run involving 45 organisations to road-test home information packs is currently underway, while more than 4,000 people have begun training to become home inspectors.

However, it is estimated that between 5,000 and 7,500 full time home inspectors will be needed to carry out the estimated volume of home condition reports, and MPs cite this as another reason to delay or cancel home information packs.

Charles Smailes, president of the NAEA, said: "We have always supported any improvement to the home buying and selling process, however, we have major concerns about the home information pack's ability to do this in its current form."

He added: "The effect of removing first day marketing rights and the fact that a valuation or structural survey may still be required in addition to the pack are just some of the issues we would like the government to address. The introduction of HIPs is likely to have a huge effect on the market and we believe there is still a lot of work to be done."

Labour MP Dr Phyllis Starkey has tabled a counter motion welcoming the introduction of the packs, claiming they "will alleviate the high level of transaction failure in the UK property market".

Dr Starkey argues that the packs will ensure that information on the condition of a home is only paid for once - by the seller - rather than by multiple prospective buyers.

Caroline Dyson of law firm Bewins agrees. She said: "Currently, £1 million a day is wasted on failed transactions as buyers often spend hundreds of pounds on valuations, legal advice and searches in transactions that ultimately break down. By providing key information at the beginning of the process, home information packs will prevent waste and significantly cut the number of sales that fall through."

For more information on home information packs, go to: www.homeinformationpacks.gov.uk

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