The coalition Government’s housing policy includes several initiatives designed to ease demand on the UK housing market, including reforming planning law, introducing measures to allow the use of empty property and to encourage the building of more shared-ownership schemes and community housing projects.
But it is the decision to scrap the deeply unpopular home information packs that has so far attracted the most interest from the mortgage industry.
Communities Secretary Eric Pickles says the decision to scrap Hips would save an estimated £870m over the next 10 years and the removal of ’expensive and unnecessary’ regulation should help support a fragile recovery in the property market.
Pickles said: “Hips are history. This action will encourage sellers back into the market and help the market as a whole and the economy recover.”
The Hip was designed to make the house purchase process run more smoothly by providing information to a prospective purchaser in advance. But the execution of the policy has been criticised since their introduction.
Paragon Mortgages managing director John Heron says: “The original policy objective to improve the house purchase process was sound, but Hips were simply the wrong vehicle. They added a new, expensive layer of bureaucracy and did the opposite of what they were intended to do. Just one of the problems with Hips was they discouraged those that did not have to sell from testing the market because of the hassle and upfront cost of the pack.”
’An end to electoral uncertainty and the abolition of Hips will provide a substantial boost to the housing market’
The removal of this barrier to casual sellers who want to test the water has prompted many in the industry to predict a boost to the property market.
Santander mortgage director Phil Cliff says: “It is great news for house sellers and buyers alike. Consumer and industry feedback has highlighted that Hips were a headache for many people trying to buy and sell their homes over the last two years. Indeed, suspending Hips may help stimulate the housing market by convincing the homeowners who are currently reluctant to put their homes on the market because of the required paperwork and associated costs to start the process.”
National Association of Estate Agents chief executive Peter Bolton King is also optimistic about the scrapping of Hips. King says: “The suspension of Hips is very welcome news. It will be greeted enthusiastically by both the housing market and house buyers, few of whom have paid much attention to these pointless packs. It is also good news for sellers. They no longer need to shell out hundreds of pounds for a piece of pointless regulation that benefits no one. We can confidently predict that an end to electoral uncertainty and the abolition of Hips will provide a substan-tial boost to housing.”
However, some commentators have suggested that the scrapping of Hips should not be the end of the matter and believe that a few of the features should be retained in the house buying process.
Gillian Charlesworth, Rics director of communications says: “Rather than seeing the announcement as the death of Hips, it should become the start of a new process that brings real change to people’s experience of buying a home.”