Tories attack 'dodgy' home information packs

Wednesday, 12 July 2006 12:00 AM

The Conservative party has launched a poster campaign against home information packs (HIPs).

The campaign, supported by Location, Location, Location's Kirstie Allsopp, criticises 'Labour's dodgy HIPs' and calls for them to be scrapped.

From June 2007 every property that is put up for sale will require a home information pack.

Costing the home owner between £600 and £700 for an average home, they will contain information on the condition of the property, and legal documents required for its sale.

Home information pack providers warn that scrapping the packs will cost consumer £300 million and delay the introduction of energy efficiency performance ratings.

But the Conservatives have put forward a number of reasons as to why the packs should be scrapped, including that buyers will still need to pay for valuations and surveys in addition to the sellers paying for the pack.

The home condition report, contained in the pack, will not tell buyers about flood risk, natural subsidence, electrical safety, radon gas or contaminated land, making it hard for buyers to trust them.

For homeowners, the packs will make the process of selling their home more complicated because it needs to be compiled - taking up to 14 days in some cases - before the house can be put on the market.

If they then decide to take their home off the market for 28 days or more, the homeowner must pay out again for a new pack if the existing one is more than three months old.

Kirstie Allsopp said: "Moving home is one of the most stressful things anyone can do; I fear this new system will make it worse, not better. Rather than protecting consumers, these sellers' packs threaten the stability and health of the housing market."

Michael Gove, shadow minister for housing and planning, said: "If people trust these dodgy HIPs, I fear they will be lulled into a false sense of security. If they don't and commission their own survey, costs will be duplicated. Either way, home buyers and sellers will pay the price for this new government red tape on the housing market.

"The government would be better to scrap this scheme than peddle expensive, deficient and unreliable information to young couples and families."

The Tories also point out that mortgage lenders will not trust information in a home information pack that is more than six months old, even if the home remains on the market.

A recent survey by the Council of Mortgage Lenders showed that while its members ultimately planned to use the packs to carry out automated valuations, they only expected to be doing so in 40 per cent of cases, even five years after their introduction.

There are also concerns that the packs will discourage people from putting their house up for sale, along with reducing labour mobility and depressing consumer spending.

Research by the National Association of Estate Agents reveals that home information packs would deter 60 per cent of homeowners from putting their property on the market.

Another survey by Oxford Economic Forecasting shows that a 25 per cent reduction in the number of homes put on the market would cut consumer spending by one per cent by 2008 and increased unemployment by 90,000 in 2009.

However, the Association of Home Information Pack Providers (AHIPP) argues that the recent decision to include energy performance certificates in the packs will potentially save every homeowner £200.

An EU directive means that by 2009 each house that goes on the market must have a certificate, which will cost £250 to produce as a stand alone report, but only £50 when compiled as part of a home information pack.

"By including the energy performance certificate in the pack consumers will save in the region of £200 for every certificate produced," said Mike Ockenden, director general of AHIPP.

"Even in a slow year for home sales that equates to over £200 million per annum."

He added: "What puzzles me is that despite the continuous claims from David Cameron that his party has a strong environmental focus he is refusing to support the introduction of HIPs which serve the green agenda so well."

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