Negative Impact Of Hips On Housing Market

Home Information Packs (Hips) should be voluntary when introduced by the government in June, according to industry specialists.

From June 2007 it will be compulsory for house sellers to produce a Hip, estimated to cost £1,000, to provide a prospective buyer with information about the property and failure to do so will result in a fine.

A survey by the Building Society Association (BSA) found 84 per cent of building society chief executive officers feel Hips will have a negative effect on the housing market.

Those surveyed said they believe Hips will add costs without any tangible benefits, will not reassure buyers, will not speed up housing transactions as lenders will still require valuations and the number of properties for sale will dramatically reduce creating a supply and demand shortfall.

"Making them [Hips] voluntary will lessen any negative impact on the market and minimise the effect of any problems that may occur," said Adrian Coles BSA director general.

"It is ridiculous that someone selling their home without a HIP will be punished by a fine. If people feel that Hips will be of benefit they will opt to have one without the need for compulsion."