Home Information Packs will have a negative impact on the housing market and should be voluntary, says the Building Societies Association.
The BSA says 84 per cent of building society chief executives expect the mandatory introduction of Hips will be bad for the market.
From June 2007, sellers will have to produce a Hip, providing the prospective buyer with information about the property. They are expected to cost up to £1,000 and a failure to produce could result in a fine.
Society chief executives are warning that implications could include additional costs without tangible benefits, that they will fail to reassure buyers, housing transactions will not speed up as lenders will still require valuations and the number of properties for sale will reduce dramatically, creating supply and demand shortfalls.
They say making Hips voluntary would allow market forces to determine the demand for Hips and how they will operate. It would also allow buyers and sellers to fully acquaint themselves with Hips and the implications for the property sale. It would also minimise the impact of any unforeseen consequences that the introduction of HIPs may have.
Speaking at the BSA’s Annual Conference in Manchester, BSA director general Adrian Coles said: “People’s homes represent their most important asset. As such, it is imperative that they can have confidence that there will not be any unexpected fluctuations in the market over 2007. And with so much uncertainty amongst 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. Making them voluntary will lessen any negative impact on the market and minimise the effect of any problems that may occur.
“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.”