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HIPs countdown gets mixed reception
By Richard Green
The news that the Government has published a timeline for going live with its Home Information Packs (HIPs) has received a mixed press from mortgage brokers and other professionals involved in the housing market.
It's "essential", according to the Council of Mortgage Lenders, in order to monitor whether progress is on track. But the Royal Institution of Chartered Surveyors – perhaps smarting from not being consulted about the countdown – warned that "having a timeline will not guarantee programme success".
HIPs have been mired in controversy ever since the Office of the Deputy Prime Minister announced they'd be compulsory for anyone selling a property from June 2007. It's a simple premise: an estimated £1 million pounds a day is wasted on legal advice, valuations and searches on property transactions that fall through. So, put the onus on the seller to provide that information at the start of the process – at a cost of around £600 plus VAT – and you get rid of the waste and delays that are endemic in the UK housing market.
But from the outset, people involved in the housing market, from mortgage brokers to estate agents to TV gurus have warned that, far from simplifying the process of buying property, HIPs could serve to make it worse.
Last month, the London-based firm of mortgage brokers, MIAS mortgage brokers expressed concern that HIPs would initially slow down the housing market. The firm's director, Roger Milbourn, said, "HIPs could have serious repercussions on the buying and selling process – and, consequently, on house prices." He also warned that finding enough people to carry out the 1.5 million surveys currently carried out each year could prove extremely difficult. As of November 2005, 1700 people were undergoing training for the Home Inspector qualification, but the ODPM estimates that between 5000 and 7400 will be required for June 2007.
This mortgage broker's concerns were echoed by the TV presenter, Sarah Beeny, of Channel 4's Property Ladder. She's expressed the opinion that HIPs merely represent another layer of red tape in an already complex market, plus more money for the Treasury's coffers. Another property industry player, the National Association of Estate Agents, is sceptical. The NAEA has said that it's critical for HIPs to be tested in a conclusive and robust dry run, before the June 2007 launch date. With this in mind, the NAEA believes that the ODPM's timeline is "extremely challenging and probably optimistic".
The Government's timeline sets out the dates for key milestones, including the HIPs dry run, publicity campaign and approval of the first certification schemes to oversee the work of home inspectors. That critical dry run gets under way in April; home buyers and sellers can track its progress through the mortgage news section of the MIAS website.
Not all players in the housing market are downbeat about HIPs. Although all agree that there's a considerable task ahead, the Council of Mortgage Lenders is convinced that, once the market has gained experience and confidence in the new environment, its full benefits to consumers will be realised.
About the Author
Richard lives in Edinburgh, occasionally writing for the personal finance blog - Cashzilla, and listens to music no one else likes.
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