HIPs extended to three-bed homes

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By Jennifer Hill

LONDON (Reuters) - The government’s controversial home information pack (HIP) scheme applies to properties with three bedrooms from this week.

The extension affects the greatest tranche of housing stock in England and Wales, with three-bedroomed properties accounting for around 43 percent of the market, according to HIP provider LMS.

People selling properties with four bedrooms or more have had to provide the packs since the start of August and the scheme will now affect a total 60 percent of properties.

HIPs -- which contain key information about a property, including title deeds, local searches and an energy performance certificate (EPC), and are provided by property sellers -- were due to come into force for all properties south of the Border on June 1.

But the government was forced to postpone their launch and introduce them on a phased basis, because not enough energy assessors had been trained.

It said the packs are currently taking an average of five days to produce and costing sellers around 350-400 pounds.

Many estate agents are offering HIPs as part of their usual fees, it added.

HIPs shift most of the burden of gathering information about a property prior to sale from the buyer to the seller.

They have been met with fierce opposition, with critics saying they bring little benefit to .....continued below

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The opposition led to the government scrapping the need for packs to contain a full survey of the property, which would have been the most expensive part.

But Dominic Toller, director of marketing and new business at LMS, one of the largest HIP providers, said: "Much to the despair of the anti-HIP lobby, here we are welcoming HIPs for over 60 percent of housing stock.

"A much needed reform is under way and it hasn’t brought the housing market to its knees as some had predicted."

He added: "Although the full benefit of HIPs will only be felt when every part of the property chain has a pack ... it’s hoped that we will now start to see transaction times and cancellations dropping considerably."

Miles Shipside, commercial director of property portal Rightmove -- which advertises around 90 percent of properties for sale in England and Wales -- said the move would be a "tough test" for HIP providers and estate agents.

"It will expose any shortage of energy assessors too, especially if there are geographic holes in coverage compared to where properties are being marketed," he said.

The Royal Institute of Chartered Surveyors (RICS) said the introduction of HIPs had led to sellers deserting the market and urged the government to reconsider its reform.

The number of homes with four or more bedrooms coming onto the market in August more than halved compared to the same month last year, a survey of its members found.

Some 53 percent of respondents said they had seen a decline in the number of homes requiring a HIP coming onto the market, with an average drop in new instructions of 51 percent.

The most affected areas were the West Midlands and East Midlands, where surveyors reported drops of 83 percent and 75 percent respectively.

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