Grant Shapps dampens 3-bed HIPs anniversary
Tory Shadow Housing Minister, Grant Shapps, is calling on Gordon Brown to invoke a last minute concession given to the House of Lords back in 2004 when the Government pushed through the Home Information Pack (HIP) laws.
The concession allows for the suspension of HIPs in case things go wrong... Grant thinks things are wrong (for the following five reasons):
- 1) HIPs discourage speculative sellers from putting their homes on the market and act as a barrier to entry; this restricts housing supply and so reduces the number of net housing transactions.
- 2) By duplicating the need for searches and not providing reliable information, HIPs increase transactional costs, increasing the net cost of moving home.
- 3) HIPs reduce market responsiveness, by discouraging people from changing estate agent if their house does not sell – as they may be asked to buy a new HIP.
- 4) The searches in HIPs go ‘stale’ if a house is left unsold for too long, increasing transaction costs in a slow market, and acting as a further deterrent to would-be sellers.
- 5) If the seller has opted for a so-called ‘free HIP’ – a deferred payment option – they will be hit with a fee if they want to change estate agent, on top of the cost of any new HIP with their new agent.
Conservatives call for ministers to suspend HIPs » Housing » 24dash.com
Dissecting HIP objections
I would agree with #1; although some estate agents think speculative sellers are a waste of time and money anyway.
#2 is not a clear-cut "one size fits all" objection though I do concede in today's market duplicate searches are more likely as houses remain unsold for longer periods.
#3 applies only if estate agents tie-in sellers via inducements for agency; that is a market problem, and one that NAEA - along with Sir Brian Carsberg and the Ombudsman - should address.
#4 would appear to be a duplicate of #2's objection - nice try.
#5 would also appear to be a duplicate of #3's objection - double nice try, Grant.
Happy birthday HIPs
Oh yeah: on this day last year, HIPs were introduced on 3-bed homes and over.
