Abolishing Home Information Packs (HIPs) – Facts & Fiction

Despite recent rumours and ill informed articles to the contrary, it is still ‘business as usual’ in the HIP industry – for now at least. Since the new Government confirmed that they planned to scrap HIPs whilst retaining the Energy Performance Certificate (they have no choice in this – it’s required by European Directive), there has been constant talk about if and when the requirement for a Home Information Pack will be abolished.

Elements of the press have been particularly irresponsible, claiming, in The Independent, that ‘HIPs have been scrapped’ whilst ‘Voice of the Industry’ Estate Agent Today have prematurely claimed that an order to suspend HIPs has already been signed.

Whatever the reason for publishing these erroneous articles, the result has been to cause confusion amongst both the property industry and the consumer. The Department for Communities and Local Government (CLG) have confirmed yesterday that a HIP suspension order has NOT been signed, yet the rumours have encouraged some home owners to put off selling their properties and, in some cases, ask their estate agents to break the law by marketing their homes without ordering a HIP.

What is clear, once fact has been separated from fiction, is that until CLG say otherwise, a HIP is still required before the marketing of a property can begin. The Housing Minister, Grant Shapps, has previously explained that the new Government will scrap HIPs after a consultation period, which he expected to take around 100 days. Whether it’s possible to suspend the requirement during this consultation period is not completely clear. The Housing Act 2004 does seem to allow the option, but it is accepted that the clause was included in order to provide an ‘emergency escape’ if HIPs proved to dramatically stall the housing market in the early days after their introduction.

As a recent Office of Fair Trading (OFT) report, (OFT report Home buying and selling – A market study) published in February this year, concludes,

it could be argued that HIPs in their current form have a positive impact’ and ‘We do not, therefore, recommend any intervention on this issue at the present time.’

So the OFT, no less, would seem to prevent the use of the suspension clause in the Act, or at least provide the basis for a legal challenge were it used at this late stage.

The HIP industry must accept that the new Government has been consistent, whilst in opposition, in its intention to abolish our livelihoods, and that they will now take steps to carry out their plans. Some of us have planned for this eventuality and started to develop alternative solutions to the current HIP, that offer the real improvements to home buying & selling process that the previous Government failed to realise were achievable. Given the opportunity, we will provide the market driven solutions that the Conservatives claim to support, but any move by the Con/Lib coalition to invoke an immediate suspension will not only stall these entrepreneurially driven improvements, but also cause massive and very real problems for HIP providers and well beyond.

A planned removal of the requirement for a HIP, as reasonably expected given the 100 day consultation we’ve been promised, will allow businesses to wind down or shift the focus of their operations in a structured manner. An immediate suspension, on the other hand, will lead almost instantly to mass redundancy (with its inevitable financial effect on both individuals and the State) and an inability to meet creditor’s payments. Energy Assessors, Search Providers and software firms will be amongst those to find themselves deeply out of pocket, frustratingly at no fault of themselves or even their clients.

It is, of course, just a rumour that an immediate suspension is imminent, and it is surely inconceivable that a new Government would create this type of widespread catastrophe as one of its first acts. Grant Shapps and his colleagues now have an easy decision to make – they can either ruin the lives of thousands of members of our industry, or provide the time and support that will allow us to deliver the market led solutions they accept are required.

Written by Simon Thomas, Managing Director of HIP Matters Ltd and Vice Chairman of the Independent Pack Providers Association.

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