QUESTIONS REMAIN ON HOME INFORMATION PACKS (HIPS)

[Western Mail, 30 March 2006]: While only a few years ago the housing market was experiencing annual double digit price growth, the market has cooled considerably of late.

Greater flexibility from mortgage providers has also enabled more people to get a foot on the housing ladder.

And a new survey from National Homebuyers shows that valuers of properties - surveyors - are also reporting that the market is further playing into the hands of buyers.

It reports nearly a third of surveyors in Wales feel the market is at best slow and at worst static.

Although in some areas of Wales property hotspots remain, the survey concludes that the balance of power has shifted towards the buyer. It also notes that sellers might have to be more realistic when setting asking prices.

With home ownership in the UK at an all-time high, the emphasis will continue to fall on developers to provide a steady stream of new housing stock - particularly in the south-east of England where hundreds of thousands of new homes will be needed.

This is why it is vital that local councils are encouraged to speed up their planning processes, to ensure that developers can move quickly to get properties on the market. This in turn will ensure a further re-balancing in the marketplace in favour of the buyer, as well as acting as a bulwark against spiralling house prices.

Next year the Government is introducing its controversial Home Information Packs (HIPs). D-day is in June 2007 and, by that time, the Government confidently expects a minimum of 7,000 fully accredited and qualified inspectors to do the work UK-wide.

Other projections suggested that as many as 9,000 would eventually be needed to meet long-term market conditions.

However, the current number in Wales is just under 100.

The Government is talking about curtailing the training period, with even a 28-day intensive crash course being proposed.

For the seller the cost of preparing an in-depth HIP will be around £600.

As a result it is expected that in the lead-up to next spring there will be a 'rush' to avoid the cost of HIPs.

But what will happen after D-day? One likely scenario is that sellers will look to recoup the outlay by factoring in the cost of HIPs into asking prices.

For the Government the introduction of HIPs will produce no revenue-raising upside.

It argues that with more in-depth information in advance it should reduce instances of house sales falling through at the last minute, say after the discovery of structural faults.

However, the question still needs to be asked: does the housing market really need HIPs?