HIPs - A costly indulgence

CML Council of Mortgage Lenders Director General, Michael Coogan, speaking at the recent Property Forum annual dinner, said that the HIP Home Information Pack infrastructure now looks like "a costly indulgence", and is urging the Government to think again about whether it can still be justified.

The aim of HIPs is to provide potential buyers with more information right at the start of the home buying process. However, in July this year the government dropped the main requirement for packs to include a property survey. That said, packs will be compulsory in England and Wales from next June.

Whilst the CML says it has never been anti-HIP, the Government is still sticking with its original plans for a complex certification system and databank for inspectors producing energy performance certificates - which now looks disproportionate and anachronistic. And this despite having dropped the requirement for a home condition report in the packs.

HIPs are due to undergo a "dry run" to test their effectiveness in practice. However, the CML says it doesn't believe this will be a robust test of the new arrangements. It's already well behind the original schedule, and is being operated by the Association of Home Information Pack Providers, which naturally will wish to see success.

Government funding has been made available to artificially incentivise take-up, compared with the true cost that will subsequently apply to any universal roll-out, says the CML. And the Government has published no clear criteria for monitoring or evaluation of the dry run.

Pointing to the recent innovations that have emerged from lenders in making unconditional mortgage offers at the point of sale using credit reference information about the borrower and automated valuation data about the property Coogan says he is even more convinced that market forces should be the primary mechanism for delivering improvements to the house buying and selling process.

"The current HIPs framework, seemingly justified by the EPC requirements, is simply not proportionate and could not pass a robust regulatory impact assessment.

"It is time for the government to think again," he says.

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2006-10-27 11:47:19 © Moneyextra.com