The government has abandoned controversial plans to force people selling their home to include expensive surveys in its new Home Information Packs (HIP) when they are launched next year. With worries that there will not be enough inspectors to cope with the demand for Home Condition Reports if they were included in the main launch, Yvette Cooper, the minister for Housing and Planning, signalled a climbdown by saying that further testing of the idea was needed.

Under the original proposal, house sellers would have been required to provide a condition report, similar to a survey, in their HIP, along with land searches, title deeds and an energy rating.

But from June 2007 home owners will only have to provide an energy efficiency rating, title deeds and searches, which will cost much less than the £1,000 bill for the full HIP.

At the same time, the Council of Mortgage Lenders has warned that many lenders will not be ready to use Home Condition Reports until 2008/2009, meaning they would continue to seek separate mortgage valuation surveys.

In a written statement to Parliament, Ms Cooper said: "As a result, we have concluded that there would be significant risks and potential disadvantages to consumers from a mandatory ‘big bang’ introduction of full Home Condition Reports on June 1, 2007."

She said that HIPs would still be introduced with searches and other key documents, including energy performance certificates, from June next year, but Home Condition Reports would not be made mandatory.
Instead she said the government was looking at a progressive market-led take-up of the reports.

She said people with a Home Condition Report were likely to benefit from faster sales with fewer transactions falling through, while in time buyers should also get cheaper and swifter mortgage valuations and offers.
Ms Cooper said: "We therefore believe that there will be a significant incentive for consumers to top up their HIPs voluntarily to include full Home Condition Reports and that this is a product that the market can and should deliver."

But she added that the reports would still become mandatory if the industry failed to make a success of them.
She said the government planned to carry out more research into Home Condition Reports, working with the industry to carry out a series of local trials looking at both the reports and energy performance certificates.
HIPs have come in for fierce criticism from the property industry, with some warning that they may even risk destabilising the housing market.

There have also been claims that the cost of the compiling the packs, which could be as high as £1,000 including a Home Condition Report, would deter people from putting their home on the market.
Concerns have also been raised that people who wanted a quick sale would have to wait 14 days while one of the packs was put together before they could market their home.

But Ms Cooper confirmed that the government was considering allowing people to begin marketing their homes as soon as they had commissioned a pack, without having to wait for 14 days while it was put together.

The government is introducing the packs in a bid to reduce the £1 million that is wasted each day as a result of property sales falling through at a late stage.

It also hopes the inclusion of energy performance certificates in the packs will encourage people to make their homes more energy efficient, reducing both fuel bills and carbon emissions.

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Article date: July 2006