The housing market in the UK is already in complete turmoil. Estate agents have recently announced that they are selling an average of less than one property per week, and the downturn in the housing market has been profound over recent months. A number of factors have been blamed for the crisis that has hit the housing market, from the falling house prices, which have made would be buyers fearful about being plunged into negative equity, to lack of mortgages, which has made it difficult for buyers to get a mortgage.

However, HIPs have not managed to get away without some degree of blame, and various officials including estate agents and even Tory Party officials, have said that the necessity to have Home Information Packs for residential properties being marketed for sale in England and Wales has had a dampening effect on the housing market. In fact, the Tory Party has gone as far as to say that there is a clause in the current legislation that would allow the government to suspend HIPs if necessary, and that this is something that the government needs to do as quickly as possible.

The Tory Party has already made it clear that if it gets into power HIPs will become a thing of the past. However, in the meantime one official from the party has stated: “If Gordon Brown genuinely wanted to help the beleaguered housing market, he would use his powers to suspend this harmful regulation and save homebuyers’ money. These little-known provisions to suspend Hips were introduced for a reason – to undo the regulations quickly if it all went wrong. The next Conservative government will scrap this unnecessary red tape completely, but a suspension now would deliver those benefits sooner rather than later.”

An official from the Department for Communities and Local Government, however, has responded: “We have absolutely no plans to suspend HIPs. First-time buyers are also receiving the information in the HIP for free, helping to reduce costs for households looking to get on to the property ladder.”

He continued: “It is widely acknowledged by experts that the current challenges are a result of global economic pressures also being experienced in the USA and other parts of Europe.”

At present it seems that the Labour Party is sticking to its guns and is determined to make HIPs work, but with all the speculation over whether Labour will get into power when elections come around again these packs could become a think of the past.

Is it time to scrap HIPs? is a post from: Glitec Loans

One estate agent recently said that HIPs were at least partly responsible for a downturn in the number of properties being put up for sale, stating that there had been a marked reduction following the widespread implementation of the packs on all residential properties in England and Wales late last year.

He said: “Clearly everyone accepts that there are a number of financial and economic factors that have caused the market to take a breather after seven hectic years. However, these figures show that there is an anomaly between instructions on properties where a Hip is required and where one is not.”

He added: “With sales slowing and normally a traditional autumn bulge in instructions, it would be normal to expect stock levels to be significantly higher. This once again appears to show the adverse effect Hips are having on the market, the lives of consumers and indeed the overall economy.”

A recent trial also seemed to indicate that the packs were not as effective has many had hoped they would be, with figures indicating that only one in six potential property purchasers was actually getting to see the pack before putting in an offer on the property.

The shadow housing minister was not impressed with this, stating: ‘These results reveal what we and the industry have known all along, Hips are a complete waste of time. It is proving to be a very costly and bureaucratic joke. The Hip hasn’t made the process quicker or more certain, it has simply made it more expensive and choked in paperwork. It is the time this Government scrapped Hips once and for all.’

However, there are also supporters of these packs. One government official recently said: “First-time buyers’ upfront costs are falling as a result of the packs, greater competition is driving down the cost of Local Authority searches for all, and EPCs are helping consumers cut fuel bills and carbon emissions.”

Following the recent trial the housing minister, Caroline Flint, said: ‘What is clear from the trials is more buyers wanted to see the Hip but it was not always made available to them. We have taken action to increase awareness of the right to see a Hip and to remind agents of their responsibility to provide one. Consumers are benefiting. Search costs are falling, first time buyers are receiving important information.’

Recent additions:

• Can Long Fixed Rate Mortgages Stabilise Mortgage Market?
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• Trial shows HIPs not as successful as hoped
• Crippling mortgage rates for first time buyers with no deposit
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Are HIPS a waste of time? is a post from: Glitec Loans

However, these HIPs have been at the centre of controversy since their introduction, and it now seems that the packs are not proving as effective as had been hoped. In fact, recent figures show that only one in every six buyers actually sees the Home Information Pack before making an offer on the property. The survey shows that the majority of buyers do not get to see the HIP for the property in which they are interested.

With regards to the survey results the shadow housing minister stated: ‘These results reveal what we and the industry have known all along, Hips are a complete waste of time. It is proving to be a very costly and bureaucratic joke. The Hip hasn’t made the process quicker or more certain, it has simply made it more expensive and choked in paperwork. It is the time this Government scrapped Hips once and for all.’

The housing minister, Caroline Flint, said: ‘What is clear from the trials is more buyers wanted to see the Hip but it was not always made available to them. We have taken action to increase awareness of the right to see a Hip and to remind agents of their responsibility to provide one. Consumers are benefiting. Search costs are falling, first time buyers are receiving important information.’

Recent additions:

• Advice given to potential home purchasers
• Many first time buyers facing soaring mortgage rates
• Darling addresses long term fixed rate mortgages in budget
• No change in interest rates for March

Trial shows HIPs not as successful as hoped is a post from: Glitec Loans