Coalition Government Suspends Home Information Packs (HIPs)

May 20, 2010
Carol Finch

Government Suspends HIP Packs - Photo by mancity

The UK's coalition government has made the first move to scrap Home Information Packs. Those selling a home from 21st May 2010 may no longer need a HIP.

Under the previous UK government most people selling a home had to put together/buy a Home Information Pack (HIP) when they put their property on the market. On the 20th May 2010 the new coalition government announced that HIPs would be suspended and, pending legislation to formalise this move, would ultimately be scrapped. What does this mean for home sellers and house buyers?

What is Happening to Home Information Packs?

Those marketing a property from the 21st May 2010 will no longer have to put a Home Information Pack in place. The legal requirement to have a HIP has been been suspended and they are likely to be formally scrapped at some point in the future.

Do Home Sellers Need a HIP Alternative?

Most of the core components of HIPs are no longer the responsibility of the person selling a property. They will, however, still have to provide an Energy Performance Certificate. This must be made available within 28 days of putting a property on the market.

Some of the other elements of a Home Information Pack (i.e. searches) may still need to be done as part of the property selling/buying process. The responsibility for this, however, may pass on to the buyer rather than the seller of the home.

Is Scrapping HIPs a Good Idea?

Many consumers looking to sell a property may be pleased with the suspension of HIPs. Estate Agents are also keen to see them go. According to the National Association of Estate Agents, HIPs are "pointless" and sellers will "no longer need to shell out hundreds of pounds for a piece of pointless regulation that benefits no one." This may also benefit the property sector as a whole as more people may be willing to test out the market and see if they can sell a home.

There are areas of the property sector which will see this as a negative, however. According to the Association of Home Information Pack Providers (AHIPP) 3,000-10,000 people working in this field could suffer from scrapping HIPs. Home Inspectors, for example, may no longer have a role to play and companies specialising in providing HIPs will suffer.

HIPs and First Time Buyers

Although scrapping Home Information Packs may save money for those selling a property, they may increase the costs for buyers. This may not be so much of an issue for those already on the property ladder; it could have a negative effect on first time buyers.

The recent recession has made it a lot harder for many to buy their first home. Lenders have been rationing mortgage approvals and the costs of buying generally may have increased for many first timers. Although stamp duty exemptions may help, many will need to find higher deposits and this additional cost may not go down well.

First time buyers looking to get on to the mortgage ladder may find the following articles useful:

Sources: BBC Online ("Hips scrapped by coalition government"); Times Online ("Government gets rid of unpopular Home Information Packs"). Accessed online 20th May 2010.