Evidence gathered by stakeholders, and a careful look at the process of introducing Information Packs (HIPs) has led a Lords Select Committee to state that the Government is unlikely to achieve what it set out to do when the packs are introduced in June.
HIPs were conceived as a means of introducing transparency into buying and selling property, and also to stimulate the market. In June last year detailed requirements for HIPs were published, with Home Condition Reports (HCRs) ? a kind of survey ? as a mandatory element.
The report, written by the House of Lords Select Committee on Merits of Statutory Instruments, points out there were already concerns as far back as then about HIPs. Such quick implementation seemed ambitious, they say, and many people had doubts as to whether there were enough Home Inspectors qualified to carry out the amount of HCRs which would be necessary.
Then in July it was announced that HCRs would in fact not be a mandatory part of HIPs after all. The Committee says this confuses one of the main aims of HIPs, which was to ensure clarity in home surveys. In fact, what many of those who gave evidence to the Select Committee said was that mortgage lenders would then require costly valuation inspections as well as HIPs, should the HCRs be a voluntary part of the scheme.
The Committee took evidence from all the key stakeholders, and most had reservations about the implementation of the scheme: ‘The comments which we have received from interested parties show at best scepticism and at worst hostility,’ says the report. ‘The Government have not been able to convince the principal stakeholders in the housing market that their proposals as they now stand are sensible or worthwhile, or are likely to be effective for their declared purposes; and they need to do more if the market is to respond positively.’
The report concludes that HIPs have not been fully thought through, and says that if the Government wants to achieve what it states it does, it needs to rethink the plans it has for the Packs: ‘We cannot overlook the doubts that have been widely expressed about the benefits identified by the Government. Home Condition Reports will not now be a mandatory element of HIPs, and yet HCRs were conceived as a means of tackling a prime cause of transaction failures in the home-buying process. ‘
‘Ministers hope to see significant voluntary take up of HCRs, and yet the Government acknowledge that voluntary change us not powerful enough to bring about real improvements in the housing market. We question therefore whether the HIP Regulations will effectively achieve their policy objective,’ it states.