Hips 'a stealth tax on house sales'

Anyone selling a property with three or more bedrooms will now have to compile one of the controversial packs which have been introduced in an attempt to speed up the house buying process.

But opponents of Hips warned the Government could face a backlash over the innovation, while others claimed there had been a drop in the number of four-bedroom homes coming on the market since the packs were first introduced on August 1.

Michael White, a property lawyer from Dawsons Solicitors, said: "Now the Government has announced the extension of Hips to three-bedroom properties I expect there to be a huge public backlash. The Government is effectively introducing a stealth tax - charging people to find out the value of their own home."

The Royal Institution of Chartered Surveyors (RICS) claimed there had been a steep drop in the number of four-bedroom homes put up for sale since the packs were first introduced. It said the number of properties requiring a Hip coming on to the market in August more than halved in some areas of the country compared with the same month last year.

A total of 53% of respondents to its survey indicated a decrease in homes with four or more bedrooms being put up for sale, with only 5% of surveyors saying they had seen an increase. But the Government claimed the introduction of Hips was already starting to reduce costs and improve transparency in the housing market.

Responding to the RICS survey a spokesman for the DCLG said: "It is a ridiculous and wrong-headed to present normal patterns in the housing market as somehow linked to Hips - no serious economists are claiming this is the case and (they) are clear that interest rates, house prices and stock market uncertainty continue to be the most significant factors in determining market behaviour.

"The notion that people are making major life decisions on the basis of the £300 cost of a pack which is less than 0.1% of the price of an average four-bedroom home, and far less than estate agent fees, is simply ludicrous."

But the Government said it was "wrong" and "misleading" to claim the packs were a stealth tax.

A DCLG spokesman said: "The introduction of Hips is actually starting to reduce costs and improve transparency in the housing market - more than 85 local authorities have already reduced their search costs. The only new cost in a Hip is the EPC which will help families to reduce fuel bills by hundreds of pounds and cut carbon emissions. Consumers already pay for the rest of the pack under the existing system."