House packs extended to one and two bed homes

The controversial home information packs will apply to every property on sale by Christmas, the housing minister, Yvette Cooper, announced yesterday. The packs, which are intended to speed up the buying process and prevent sales from falling through, will be extended to one and two bedroom properties from December 14.

But the Conservatives and the Royal Institution of Chartered Surveyors urged the government to ditch the scheme, warning that the expansion could damage a fragile housing market and reduce the supply of homes.

Independent research commissioned by the government acknowledged that while Hips might have had a "modest but material" effect on the number of properties on the market, they had shown "no discernible impact" on transactions, mortgages or prices.

The report, from Europe Economics, suggested pressures on the market - such as the credit crunch, unwinding of fixed rate mortgages and a slowing economy - meant it might make sense to extend the scheme sooner rather than later.

"The effects of Hips (if any) on prices, mortgages and transactions ... will just be too small to notice," it argued. "With 60% of the market already covered by Hips and with a degree of uncertainty regarding house price trends there are strong arguments for putting the whole market under the same regime."

Cooper argued that extending the scheme, first introduced for four-bed homes this summer, would help rather than hinder first-time buyers. In.....continued below

Advertisement starts

Advertisement ends

a written statement to MPs, she added: "Information such as searches for which they would previously have had to pay will now be included in the Hip paid for by the seller, reducing the costs of the first step on to the property ladder."

The packs had previously been delayed because of fears that there were too few assessors for the energy performance certificate element, which rates homes for efficiency and carbon emissions, but almost 5,800 are now accredited.

Hips were initially going to cost up to £1,000, but their cost was cut to about £300-400 after the government scrapped the requirement for packs to include a "home condition report", or survey, because of political opposition.

The surveyors' institution claimed expansion would wipe 300,000 properties off the market. It added that 67% of chartered surveyors had seen a fall in the number of new properties with three or more bedrooms put up for sale in October compared with the same month in 2006.

Guardian Unlimited © Guardian Newspapers Limited 2007