Home sale pack fiasco could wreck market, warn agents

From June 1 - just five weeks away - homeowners will be forced to pay up to £1,000 to compile the packs before they can market their property.

But industry figures believe implementation of the scheme has been rushed and botched. They claim the changes, when coupled with rising interest rates, threaten disaster in the housing market.

They accuse the Communities and Local Government Secretary, Ruth Kelly, of ignoring warnings and expert advice to steamroller the scheme through.

Properties are expected to flood onto the market ahead of the deadline to avoid the cost and red tape of a HIP.

Analysts believe this will then be followed by a famine. This is predicted to lead to wild swings in prices and create fear and uncertainty among homeowners.

Trevor Kent, past president of warn the National Association of Estate Agents, warned: 'To continue this folly will lead to property market meltdown.

'Disastrous for economy'

'Disaster is about to fall on the housing market and wider economy should HIPs be introduced as currently scheduled.' Confusion surrounds how much a HIP will cost. Most analysts put the figure at around £400, however some suggest it could be £1,000.

The pack must include Land Registry title deed documents, local planning application searches and an energy performance certificate.

This assesses energy-saving measures warn agents such as double-glazing, loft insulation and then rates the property on a scale of A-G.

However, estimates say fewer than half of the 7,000 inspectors needed have been trained, creating delays in compiling the packs.

In addition, there are a host of others issues, including: • Councils are supposed to provide information on planning searches within three days, but many are not geared up for this; • There is no approved redress scheme if the information is wrong; • If a property does not sell quickly, much of the information - particularly planning particularly planning searches - will be out of date; • Agents or sellers will be fined £200-£500 for marketing their home without a HIP.

However, trading standards officers don't have the manpower to police the system.

Michael Coogan, director of the Council of Mortgage Lenders, called for implementation of HIPs to be postponed.

He said: 'It would be nice to know that dry-run trials which were launched last November show the new system will work, but the Government has not published the results. We are assured by the Government that everything will be fine, but all the professional bodies are saying something else.' He said the decision to make the change on June 1 was a gamble because this is normally a busy time for sales.

'This is a high-risk date. We suggested January or October, but the Government chose to ignore that advice,' he added.

'The changes should be postponed until the home energy efficiency assessors are in place, until we know the results of trials and to a time of year when the impact on the market would be minimised.' As many as one in five sellers put their home on the market 'on spec', believing they might get a good price or find a new property that they fall in love with.

They could be deterred because of the cost of compiling a pack.

A spokesman for the Royal Institution of Chartered Surveyors said: 'Officials are blindly pressing on with their compulsory Whitehall solution despite evidence that this market realities and introduces unnecessary regulation.'

Both Ruth Kelly and Yvette Cooper, the Minister for Housing and Planning, have refused to meet industry leaders as a group.

The regime was conceived by Labour to simplify the house sale process and prevent gazumping. It was supported by the consumer group Which?.

It believes HIPs will be a genuine help to sellers by providing more reliable information about a property than is offered by estate agents.

It said: 'The HIP ought to make buying a property a more efficient process, and reduce the astonishing failure rate that means a third of accepted offers come to nothing.

'Fewer failed transactions means less wasted money. So they're going to save people cash as well as time and effort.' The Association of Home Information Pack Providers backed this view.

A spokesman said: 'Many appear to have forgotten that the HIP was introduced to assist in providing a more efficient and effective home buying and selling process for the consumer.'