HIPs suspended from 21st May 2010

| May 20, 2010 | 2 Comments
”HIPs

Home Information Packs (HIPs) will no longer be required for house sellers from tomorrow, 21st May 2010.

The costly packs were introduced in 2007 in England and Wales, despite strong opposition from the Royal Institution of Chartered Surveyors (RICS) and National Association of Estate Agents.

A final good-bye to the HIP involves legislative changes and the immediate reprieve takes the form of a suspension, although the Energy Performance Certificate will remain as it is required under European law.

Meanwhile, HIP providers face a very uncertain future; many have set up their own businesses or paid for their training and will no doubt be seeking compensation.

The director general of the Association of Home Information Pack Providers, Mike Ockenden, says: “Over 3,000 jobs will go and 10,000 will be affected as a result of the suspension of HIPs and £100 million revenue will be lost to the Treasury in VAT receipts.”

He adds: ““We have been proposing for months that a legal or exchange ready pack be instructed at the start of the sales process.

“We think it would be crazy to throw the baby out with the bathwater and remove at a stroke all the good things that have come about with HIPs, and the lessons we have learnt.”

Finally, the recovering UK housing market may not benefit from a surge in speculative sellers that could follow the suspension of the HIP.

New instructions for sales are already outstripping new buyer enquiries, according to the RICS.

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Comments (2)

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  1. Nick Dyoss says:

    The introduction of HIPs has always been controversial and led to extra complexity in the housing market and ultimately increased costs for the end consumer. The industry has geared up to fulfil the legislative criteria and there will be a period of change. This announcement does mean that solicitors can regain control of the conveyancing process. Home sellers will also benefit from the solicitor’s experience and expertise as well as no upfront costs and sometimes having to duplicate searches when their property remains on the market for a long period.

  2. Derek says:

    I don’t buy the idea that the Treasury will lose £100 Million in revenue from VAT receipt. This simply isn’t true.

    Why?

    Well the answer is that the money that people previously spent on HIPS will be spent on other things, which will also incur VAT. So, rather than spending £500 on a HIP and paying £87.50 VAT, I will spend nothing on a HIP and have £587.50 to spend on something else - perhaps a new television, or a new sofa.

    The fact is that I will still spend the money and other businesses will benefit as a result, thus providing jobs for the 3000 people currently employed managing HIPS.

    That’s the way of an economy.

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