One of the first things the new Liberal-Democrat & Conservative coalition Government has announced is its intention to scrap Home Information Packs (HIPs). So after more than 10 years in planning, just three years in operation and a whole load of wasted time and money, HIPs are once again no longer an unwelcome part of a property investor’s life.

Not everyone will be happy about the demise of HIPs though. Consider for example the thousands of people directly or indirectly employed in the industry, who were assured by the Labour Government that the packs were here to stay; they are not so thrilled to be losing their jobs. Many people gave up careers and invested in training to become self-employed HIP inspectors when the packs became compulsory. I personally know one person who did just this, and now he’s likely to lose his business right in the middle of a recession! According to the Association of Home Information Pack Providers, between 3,000 and 10,000 workers will be either directly or indirectly affected by the death of the HIP packs.

The tale of HIPs goes right back to when Tony Blair (aka. “Teflon Tony” – remember him?) and Gordon Brown launched New Labour’s 1997 election manifesto, where they spelt out plans to ‘fix’ the home-buying process. It wasn’t broken of course, but that didn’t stop them tinkering with almost everything else they encountered either.

The idea was that by giving potential buyers a pack crammed full of information on the property before they made an offer, fewer deals would fall through at a later stage; things would move quickly; and time-wasters would be discouraged. In simple terms it was shifting some of the costs of buying, like searches and valuations, from the buyer to the seller, who would pay for and provide the HIP, and no doubt also add a few hundred pounds to the price of the property to cover it too.

Importantly, HIPs fulfilled an EU directive to provide energy efficiency information on all properties, which would become one of the contents of the pack. Now that Energy Performance Certificate (EPC) is the only bit that will stay under new Government plans.

When HIPs were eventually launched in August 2007 they were pretty useless because even if the idea had once been a good one in principle, the contents of the pack had got more and more watered down over the years. Most of the intended contents had become optional for sellers, specifically the Home Condition Report (supposedly the jewel in the HIP crown) which was going to be similar to a valuation. Once that became optional, in a last minute Labour Government U-Turn, it was pretty obvious that HIPs were doomed.

Ultimately the only compulsory things left in the HIPs were a contents page, the energy efficiency report, proof of title and a few basic searches. For a mandatory cost of up to £200 a pack, it was far from a great deal!

In their final form HIPs didn’t speed up the buying process because of their watered down state, didn’t stop time-wasters, and didn’t really help potential buyers. Of New Labour’s stated goals for the HIP, none were achieved!

So it came as no surprise when the Tories jumped on HIPs years ago as a waste of time and money (and as an easy target for political point scoring). When they formed the coalition Government with the Liberal Democrats last week it was no surprise they announced they were scrapping the packs.

However, while our new coalition Government was clearly committed to scrapping the packs, it had given no timetable for doing so. As a result there were concerns that potential vendors would delay putting their properties on the market to avoid paying for a HIP. The resultant lack of supply could then skew the housing market temporarily, right at a time when that wasn’t needed, and thereby threaten the recovery.

Thankfully, the Government has listened to those concerns and acted swiftly, with an immediate suspension of the packs, pending legislation to remove them completely. Energy Performance Certificates remain compulsory due to EU legislation.

While New Labour’s introduction of HIPs was a long-drawn out messy process, it appears that their demise under the Lib-Con coalition has been a mercifully short, sharp one.

Do you have any thoughts on the demise of HIPs? Have you been personally affected by it; did you commission a HIP shortly before the election; are you a HIP inspector? You can have your say by leaving your comments below. You can also use the Social Media icons to share this post with others.

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