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Building society chiefs want voluntary Hips

More than three-quarters of building society chief executives believe home information packs will have a negative impact and should be made voluntary, according to the Building Societies Association.

The cost of producing a Hip is estimated to be as high as 1,000 and failure to produce a Hip will result in a fine.

The BSA says that building society bosses believe Hips will add costs without any benefits and the number of properties for sale will reduce dramatically, creating a supply and demand imbalance which could have a knock-on effect on house prices which will make it even more difficult for first-time buyers to get on to the property ladder.

It says making Hips voluntary would allow market forces to determine the demand for Hips and how they will operate.

BSA director general Adrian Coles says: “With so much uncertainty among consumers and the industry over how Hips will work, it seems wrong that it will be an offence to seek to sell a house without a Hip. It is ridiculous that someone selling their home without a Hip will be punished by a fine. If people feel that Hips will be of benefit they will opt to have one without the need for compulsion.”

Charcol senior technical manager Ray Boulger says: “If the scheme is made voluntary, I think it will flounder as I would have thought no more than 5 per cent of customers will want to buy Hips and most vendors will not think them value for money for their customers. The June 2007 deadline is looking increasingly unrealistic and making the scheme voluntary will allow the Government to save some face on an initiative which will add hundreds of millions of pounds to consumer costs.”

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