HIPs under attack from MP
- 20th August 2008
- Selling Property News
John Redwood MP has launched a scathing attack on the continuation of the Home Information Packs via his website.
Mr Redwood has called on Gordon Brown to suspend HIPs to help boost the housing market. His voice joins many others on the Conservative front bench, including David Cameron, calling for the scheme to be scrapped.
Mr Redwood has gone one step further by listing the following reasons why he believes HIPs are harming the market:
- 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.
- By duplicating the need for searches and not providing reliable information, HIPs increase transaction costs, increasing the net cost of moving home.
- HIPs reduce market reponsiveness, by discouraging people from changing estate agent if their house does not sell - as they may be asked to buy a new HIP.
- 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.
- 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.
Mr Redwood says: "Before Home Information Packs were introduced, Labour Ministers ignored warnings from experts and industry that this new red tape would harm the housing market and the economy. These warnings are coming true, but Ministers are more interested in saving face than saving homebuyers money."
Ministers are more interested in saving face than saving homebuyers money.
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