Controversial home information packs in the UK have been suspended while the new government brings in legislation to abolish them.
The packs, which had to be provided by a property seller before they could market their home, were largely hated in the industry and many said they have been hindering the recent real estate recovery.
The Conservative party had promised to remove them and yesterday Communities Secretary Eric Pickles suspended the packs to make it easier and quicker for people to sell. Pickles said it would reduce the cost of selling a home, remove a layer of regulation from the process and provide a welcome help to the property market during the recovery.
Sellers and those renting their property will still have to provide an Energy Performance Certificate (EPC) but it is not a requirement to be able to market the property. The government said the certificate was important as part of its new drive for a low carbon and eco-friendly economy.
‘The expensive and unnecessary Home Information Pack has increased the cost and hassle of selling homes and is stifling a fragile housing market. That’s why I am taking emergency action to suspend the HIP, bringing down the cost of selling a home and removing unnecessary regulation from the home buying process,’ said Pickles.
‘This swift and decisive action will send a strong message to the fragile housing market and prevent uncertainty for both home sellers and buyers. HIPs are history. This action will encourage sellers back into the market, and help the market as a whole and the economy recover,’ he added.
The decision was widely welcomed by the industry. Gillian Charlesworth of the Royal Institution of Chartered Surveyors said that the swift action will minimise the impact on the market and ensured that estate agents who stick to the rules will not lose out.
The National Association of Estate Agents also welcomed the moved. ‘It will be greeted enthusiastically by both the housing market and house buyers, few of whom have paid much attention to these pointless packs. It is also good news for sellers. They no longer need to shell out hundreds of pounds for a piece of pointless regulation that benefits no one. They have failed to benefit home buyers and actively discouraged sellers,’ said its chief executive Peter Bolton King.
Phil Cliff, mortgage director at Santander, said consumer and industry feedback has highlighted that HIPs were a headache for many people trying to buy and sell their homes over the last two years and the move may help stimulate the housing market, convincing homeowners who are currently reluctant to put their homes on the market because of the required paperwork and associated costs to start the process.
John Heron, Paragon Mortgages’ managing director, said that the original policy objective to improve the house purchase process was sound, but HIPs were simply the wrong vehicle as they added a new, expensive layer of bureaucracy and did the opposite of what they were intended to do. ‘Just one of the problems with HIPs was that it discouraged those that didn’t have to sell from testing the market because of the hassle and upfront cost of the pack. Suspending HIPs could therefore encourage some potential sellers to now put their home on the market,’ he added.
