British Property Award Winner 2017 & 2018
Hips, which were launched in 2007 and have since become mandatory for anyone selling a home, have been dogged by criticism. Estate agents have long complained they add red tape to the selling process, while sellers have grumbled about the £200-£400 price tag attached to the packs.
Today communities secretary, Eric Pickles, laid an order before parliament suspending Hips, pending primary legislation for a permanent abolition.
"The expensive and unnecessary home information pack has increased the cost and hassle of selling homes and is stifling a fragile housing market," he said. "That is why I am taking emergency action to suspend the Hip, bringing down the cost of selling a home and removing unnecessary regulation from the home buying process.
"This action will encourage sellers back into the market, and help the market as a whole and the economy recover." Sellers will still be required to get an energy performance certificate (EPC), showing how energy efficient a property is, within 28 days of putting their home on the market, as this is a requirement under EU law. The cost of these is typically around £60. The National Association of Estate Agents welcomed the news, saying that Hips had "failed to benefit homebuyers and actively discouraged sellers."
However, the announcement will mean that thousands of people who trained as home inspectors and rely on the packs for their income could lose their jobs. There are between 3,000 and 10,000 people whose livelihoods depend on Hips, according to the Association of Home Information Pack Providers.
Graham Brick, who works as a consultant for provider YourHIP.net and part time at Stansted airport, said his income would instantly drop on the back of today's news. "There are thousands of people out there who are now going to have to live off their savings, quickly find another job or go on the dole," he said. "We have already had calls from people today cancelling their Hips." He added that Hip providers were hoping the government would allow them to continue to provide EPCs, but he understands this side of the business could be given to the country's utility companies.
Jayde Cruickshank, an employee of Property Information Exchange, a company that provides Hip elements to home inspectors, said he was "angry and upset" by today's news. "We are going to have to completely change our business model overnight," he said. "Not only do we provide the components within the Hips but we have invested thousands of pounds in developing Hip software. All of that is now down the drain."
He addded that while he was confident the business would survive in another guise, the company was going to have to make at least five people redundant. He added: "I just don't understand the rationale for this decision. "I've worked in the housing market for a long time and Hips got rid of those sellers who were just putting their houses up for sale to test the market and left us instead with the serious sellers. It has also shortened the time taken to sell a property. "The homebuying process will become more expensive as a result of the abolition of the packs, with buyers having to pay for the searches contained within the Hip from today.
East London's new city: Dramatic expansion of Royal Docks continues with big new housing schemes, an extended City airport — and Crossrail is coming
Purplebricks shares dive on sales outlook shock