As the United Kingdom is still struggling to get back on its feet after one of the worst recessions in living memory, will the Government’s recent decision to put an end to Home Information Packs (HIPs) provide a much needed boost to the housing market? This is indeed the $64,000 question, and people appear to be in one of two camps over the issue.
One section of the housing industry firmly believes that the abolition of HIPs is now going to provide a massive boost to the still ailing market. They claim that people were put off from selling their property as a consequence of the additional expense that was involved in having to commission such a report and they generally saw the introduction of HIPs as the final nail in the coffin of the housing market at the time.
However, there is definitely another side to this coin. People even within the industry do not feel that HIPs spelt disaster when they were introduced. Indeed, a lot of people fervently believe that HIPs have been used as something of a scapegoat at a time when the market was inevitably going to decline anyway. Even when HIPs were in place, the housing market was still showing positive signs of having come through the worst.
One essential element that was included under the Home Information Packs was the EPC (Energy Performance Certificate). Despite the fact that HIPs have now been abolished, these certificates remain in place; vendors of property will need to ensure that they have the certificates drawn up within twenty-eight days of having placed their properties on the market. This was probably the most important piece of information that was to be made available to purchasers through the HIP and it is a good thing that this element remains in place.
So, what about all those unfortunate vendors who have already had to fork out for a costly Home Information Pack? Especially those who have only just placed an order? This is something that I decided to investigate further. I found that there appears to be a very strict deadline in place: business closure on 19 May 2010. The HIPs were officially cancelled on 20 May 2010, and if any packs were ordered on this date, refunds seem to be available for this day only. This effectively means that there will be a large number of vendors who will still be required to pay out for a report that is no longer a legal requirement.
Another very important casualty of the abolition of HIPs will be the entire business industry that has established itself as a provider of this service to clients. One quick and massive decision has meant that their complete way of life has just been stripped away from these clients. Yes, EPCs are to remain in place, but it is very doubtful that the industry will be able to exist through offering this simple service alone. The average cost of an EPC is around £80 and I have made note of some providers offering the certificate for less than £50. This is not going to be sufficient to keep this service sector going and it will be interesting to see if the Government will be compensating any people for their loss of earnings. It does look very unlikely at present, especially when the Government are looking to save money wherever they can.
As HIPs received so much bad press when they were introduced, the majority of the population are obviously going to be glad to see the back of them. Many people held the opinion that they were nothing more than bureaucratic red tape and just another spoke in the cogs of the house-selling procedure. Whatever your view, HIPs are no more, so let’s wait to see whether or not this abolition is about to make a considerable difference to house sales across the country. Does anyone else feel that there may be a small and noticeable rise to start and then the market will settle back to its original trend shortly after?