May 20, 2010 • 11:00 pm

Yesterday it was very much RIP for HIPs, or Home Information Packs, as the requirement to use the documents was suspended  by the new coalition.

HIPs, originally intended to lend greater transparency and certainty to the home buying process, were heavily criticised by the Conservatives when in opposition. They claimed the packs simply added to the costs of selling a home without any tangible benefits.

But have they been as bad as the Conservatives made out?

The Claim

Grilled on the record of HIPs, Communities Secretary Eric Pickes claimed the packs had been “next to useless”.

Put to him by interviewer Jo Coburn that HIPs had seen lower failure rates for transactions, and speeded up the time they took, Mr Pickles insisted the evidence showed that few people found them useful.

So do the statistics challenge Mr Pickles clam that they had been ‘next to useless’?

Analysis

There are indeed statistics which suggest that Home Information Packs have reduced the number of failed transactions and the time it takes for a transaction to go through.

Figures released by myhomemove.com  showed that the number of failed transactions since April 2009 was 9 per cent, compared to an estimated 23 per cent in the Government’s figures for 2007.

Likewise in 10,000 transactions which involved the website over the same period transaction times were an average of six days shorter.

This is backed up other findings. Estate agents Connells tracked property sales between 2 August 2007 and 31 March 2008. They established that properties with a HIP were sold twelve days faster than those without one.

However there are some problems with relying solely on such statistics. Firstly they do not cover the housing market as a whole. Secondly, in the case of myhomemove.com they are produced by a company that assists with Home Information Packs – although we not been given any reason to question them.

Full Fact contacted the Department for Communities and Local Government to try and establish whether any official figures had been compiled on the record of HIPs, prior to yesterday’s announcement. A spokesperson told us that the previous Government had not carried out such a survey.

So while there is not set of official figures to compare the figure from myhomemove.com, those in favour of scrapping HIPs point to alternative interpretations of their usefulness. They argue that since homebuyers and sellers dislike them, they are therefore not achieving their purpose.

As a spokesman for the National Association of Estate Agents (NAEA) told us: “The opinion of the vast majority of the population who are not in favour of HIPs has always vindicated our position on it.”

In 2008 the DCLG did produce a report on HIPs based on the experiences of home buyers who had to use them.
Findings based on focus group interviews showed that “initial perceptions of HIPs tended to be fairly negative” . The report also suggested that few participants, either buyers or sellers of properties read the HIPs in any great detail.

The findings were challenged by the Association of Home Improvement Pack Providers (AHIPP) who provided their own survey suggesting that only 15 per cent of people had been deterred from moving by the packs.

For instance earlier this year, Ipsos-Mori reportedly distanced itself from the way its research was presented by the AHIPP, stressing it was not intended as an authoritative survey on the influence of HIPs, the pollster said.

Conclusion

As the analysis shows, despite being such a controversial topic there is little hard evidence to assess Eric Pickles portrayal of HIPs.

While the two pieces of research described above, point to some improvements in the wake of HIPs  particularly in improving how transactions progress, this is balanced by the information suggesting that homebuyers find little use for HIPs.

For instance a survey of estate agents by the NAEA found 91 per cent felt the customers paid little or no attention to HIPs.

If people are not looking at HIPs it becomes slightly harder to attribute the faster transaction times to their effect.

On the strength of the evidence it is difficult to suggest Mr Pickles is either right or wrong to suggest HIPs were “next to useless”. 

Even much of the negative sentiment expressed in the DCLG focus groups appeared to be fuelled by negative media coverage rather than first hand experience.

Only without HIPs, it seems, will we now see what they were, or weren’t doing for home buyers.

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