The ‘Home Information Pack System’ (HIPS) was designed to limit the number of property sales falling thorough by ensuring that the seller provides a comprehensive packaging of information with regards to the property in question. The HIPS pack consisted of several documents, including an Energy Performance Certificate (EPC), standard searches, Home Condition Report and sustainability information.
The system had been introduced in late 2007 and was already gathering controversy, for example the cost of the HIP, between £300 and £600 was putting off property sellers, and that it was too much extra hassle, as people now had to gather extra documents to progress with a house sale.
The Conservatives had pledged to scrap HIPS, and sure enough when they came into power as a coalition with the Liberal Democrats, HIPS was scrapped on the 20th May 2010. According to The Guardian, who reported on the scrappage of HIPS, the statistics were shocking. Within seven days of the scrappage, new property registrations increased by over a third. Stephen Armitage, of Winkworths in Sheffield, has already reported an increase of property registrations by 20% when HIPS were scrapped. “The properties coming on our books are more in the £100,000 to £150,000 range, probably homes belonging to people with less disposable income to put towards the house move. The market has been more challenging in the north, and paying £500 for a Hip would be a sizeable outlay when there is no certainty that they can sell.”
It seems that the cost of a HIP was the reason why sellers were put off selling their property in the first place. The Managing Director of Countrywide Robert Scarff said “Properties have been selling very quickly in London and the south, but sales boards have stuck around a it longer in the north. If you are in one of those parts of the country where the market has been slower, you would have thought ’There are already three properties up for sale in my road. Why part with £500 when I might not get it back for a while, if at all?”
Therefore the HIPS pack had actually made the housing market worse off instead of making it any better off by providing more information about the house. The statistics after the scrapping of the HIPS is shocking.