May 212010

HIPs have been suspended today, and legislation to abolish them is planned to follow.

This means anyone can now put a house up for sale without first having to obtain a HIP.

However, Energy Performance Certificates (EPCs) are still the responsibility of owners to provide and these remain mandatory. It is therefore important that these are ordered promptly by those putting houses up for sale. This is a European directive (a green initiative) so these cannot be abolished by a British parliament.

Some say abolishing HIPs puts all the trump cards back in the hands of owners and their estate agents - not such a brilliant thing after all?

For example, owners can put property up for sale without incurring any outlay (or hardly any). If they don’t like the amount offered by the buyers at the time, they can just pull the property from the market, without loosing anything.

The problem with this is it will slow the market down by forcing buyers to start looking all over again, having wasted their time deciding they liked a property that might never have been for sale at a reasonable price - in the first place.

Also, the information contained within HIP packs can result in a sale collapsing once it is made available. Only making it available late in the transaction process is a double whammy for buyers who would have no option but to re-consider their purchase, late in the process.

The likely effect of this will be, an increase in pricing houses at uncompetitive levels by vendors and/or their often ever-eager agents.

This therefore seems, on deeper examination, to be a retrograde step and possibly a rather foolhardy one. Shouldn’t the powers-that-be reconsider?

The matter should at least be the subject of detailed scrutiny before confirming the proposed cancellation.
You could argue that scrapping HIPs will bring back over-pricing, which will bring back inordinate delays in finding buyers. This will cause the market to stall, not recover.

Also, with the impending rise in CGT, many second-home owners are now selling off, bringing more properties onto the market without the need to scrap HIPs.

I’m saying all this in an effort to open the debate to retain any improvements to the housing market that have already been put into place (albeit by the outgoing government) and not to allow this to go back to where it was, once before.

Thoughts anyone?