Government climbdown over home sellers' packs

The Government performed a massive volte-face on plans to introduce mandatory Home Information Packs (Hips) yesterday, backing down on proposals which would have forced sellers, rather than buyers, to pay for a survey.

The move came after sustained pressure from mortgage companies, surveyors and estate agents who claim the industry would never have been ready for the planned implementation next June, and that Hips could endanger the stability of the UK housing market.

Hips were designed to speed up the house-buying process and to avoid duplication of surveys if a buyer pulled out of a purchase.

They were to include all local and environmental searches, details of leases and planning permission applications, as well as a Home Condition Report (HCR), which would have comprised a basic structural survey and details of the property's energy efficiency. The Government estimated they would have cost sellers about £650, although some industry experts claimed it would have been nearer £1,000.

However, Yvette Cooper, the Planning and Housing minister, told the Commons yesterday the inclusion of HCRs - which would have accounted for most of the cost of a Hip - would no longer be mandatory. She said Hips would now have to include only details of local searches and the property's energy efficiency.

Although the Government will encourage take-up of HCRs, Ms Cooper said their introduction would not be mandatory. This is expected to reduce the cost of Hips to £100.

"Further testing is needed to ensure Home Condition Reports deliver the assumed benefits for consumers and that the operating systems that support them work smoothly," she said. "Design work on the dry run has made it clear this cannot be completed in time for the results to be taken into account by 1 June.

"The remaining aspects of Home Condition Reports [excluding energy performance certificates] will not be made mandatory from June. Mandatory HCRs will remain on the table if the industry fails to make a success of the roll-out of HCRs."

Which?, the consumer group that has backed Hips, condemned the U-turn in a letter to Ruth Kelly, the Secretary of State for Communities and Local Government.

Nick Stace, the campaigns and communications director at Which?, said: "The new Department for the Communities is not worthy of its title. It seems incapable of defending people in our communities making the biggest purchasing decision of their lives.

"The Government has shown its house is made of straw. Even estate agents are trusted more than politicians.... The new 'half-Hip' will be a useless but very expensive waste of time."

However, the Council of Mortgage Lenders, Royal Institute of Chartered Surveyors and National Association of Estate Agents welcomed the climbdown.

Ministerial movement

IN THE PACKS:

* Local searches

* Environmental searches

* Lease details

* Details of pending or previous planning permission applications

* Energy performance certificates

* Copies of warranties and guarantees

NOT IN THE PACKS:

* Home Condition Reports, comprising:

* Basic structural survey

* Property valuation

* Details of any interior or exterior problems

* Details of outbuildings, walls and fences