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The Government’s flagship housing policy of Home Information Packs (HIPs) suffered a new blow to their credibility today following the news that a major HIP provider is closing down.
The HIP Facilities Group and its subsidiary HIP Payment Services have announced that they are closing down due to uncertain outlook and the housing market slump. The group will not be accepting any new business from 31 August and are withdrawing from the market.
The company was a leading provider of ‘deferred payment’ HIPs to estate agents; home sellers pay for their HIP when the property is sold, taken off the market, the estate agent is changed or if 10 months elapse. However, such ‘free’ or ‘no sale, no fee’ Packs have attracted controversy, since they are more expensive to the customer, and can also lead to customers being unexpectedly hit with extra costs if they want to change estate agent (and end up paying for two Packs).
Conservatives responded today by warning investors of the risks of holding shares in Home Information Pack providers and recommending that any such companies diversity their business. Shadow Ministers have pledged that an incoming Conservative Government will pass legislation to scrap the requirement for a home owner to purchase a Pack.
Shadow Minister for Housing, Grant Shapps, said: “The closure of this company is another blow to the credibility of Home Information Packs and a new warning of the dire state of the housing market.
"Sadly, Labour’s red tape of Home Information Packs has served to undermine the market, by increasing the cost of buying and selling a home and by discouraging speculative sellers.
“Labour Ministers have led business up the garden path, promising a golden future for Pack providers that was only ever going to end in tears. Given a Conservative Government will scrap this red tape, investing in Home Information Pack companies should now carry a health warning.
"Sensible investors should consider the high risk involved in this business, and companies would do well to diversify. The days of Home Information Packs are numbered, and the housing market will
be better when they go.”
richard321
Commented 105 weeks ago
So regarding "scrapping" HIPs, would the Tories return to the days of waiting until an offer is received to get the legal enquiries & documents together? How can anyone consider that the old methods are better than getting appropriate information available up-front? Yes, implementation has been disastrous; yes, it is obvious that the lack of a survey in a HIP makes it less relevant to consumers. But under the old system consumers never used to look at legal documents anyway. It's not about consumers looking at those documents, it's about their availability, in order to get the transaction under way & maybe a lawyer looking at them early on to identify any issues. A condition survey would be of interest to sellers & buyers alike if it were available in a HIP. Nevertheless lawyers recognise that getting appropriate information to the proper people early in the process really benefits the transaction process. Oh, & how about first time buyers - if a survey were to be included they would really benefit. Always remember a mortgage valuation is NOT a survey & these days there is no certainty that even a mortgage valuation inspection will be carried out. All the (largely justifiable) criticism of the rubbish implementation of HIPs has obscured their real, common-sense, benefits.