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Windsor’s MP
Adam Afriyie today called on the Government to boost the
housing market by removing costly red tape. As
uncertainty continues over whether or not the Government
will introduce a stamp duty suspension or deferment scheme,
Mr Afriyie called on Gordon Brown to use
government powers to suspend Home Information Packs (HIPs)
to help boost the beleaguered housing market. Twelve months
on from their introduction, there is growing evidence that
HIPs deter speculative sellers, increase transaction costs,
discourage sellers from changing estate agent and reduce the
number of housing transactions – all compounding the
economic downturn.
Adam Afriyie said:
“Urgent action is needed to remove the
unnecessary burdens placed on home buyers and sellers at
this difficult time
“Yet the Government’s spin and
dithering over changes to stamp duty has thrown a spanner in
the works of the housing market by causing buyers to wait
and see.”
Adam Afriyie added:
“Before Home Information Packs were
introduced, Labour Ministers ignored clear warnings from
industry experts that they would harm the housing market and
the economy. These warnings are coming true, but Ministers
are more interesting in saving face than saving homebuyers
money.
“Gordon Brown wants to talk about
housing to create a distraction from leadership speculation.
If he genuinely wanted to help, he would use his powers to
suspend Home Information Packs straight away.
“A future Conservative Government will
scrap this unnecessary red tape completely, but a suspension
now will deliver those benefits sooner rather than later.”
End
Contact Details:
Adam Afriyie MP
Telephone: 0207 219 8023
Email:
afriyiea@parliament.uk
Notes to Editors
·
Ministers
have powers to introduce a HIPs holiday now: When the
Government pushed the Home Information Pack laws through
Parliament in 2004, it slipped in a last minute concession
to allow a government to suspend any or all of the HIP laws.
Parliament does not need to be sitting for such a power to
be used.
·
HIPs
are undermining an already unstable market:
1)
HIPs discourage
speculative sellers from putting their homes on the market
and act as a barrier to entry; this restricts housing supply
and so reduces the number of net housing transactions.
2)
By duplicating
the need for searches and not providing reliable
information, HIPs increase transaction costs, increasing the
net cost of moving home.
3)
HIPs reduce
market responsiveness, by discouraging people from changing
estate agent if their house does not sell – as they may be
asked to buy a new HIP.
4)
The searches in
HIPs go ‘stale’ if a house is left unsold for too long,
increasing transaction costs in a slow market, and acting as
a further deterrent to would-be sellers.
5)
If the seller
has opted for a so-called ‘free HIP’ – a deferred payment
option – they will be hit with a fee if they want to change
estate agent, on top of the cost of any new HIP with their
new agent.
·
The
Government ignored warnings of harm to economy: Research
by independent experts, Oxford Economic Forecasting, warned
back in 2006 that HIPs would deter sellers and curtail the
number of housing transactions by between 10% - 25%. In
turn, this would cut consumer spending, reduce labour
mobility and increase the medium term level of unemployment.
Ministers ignored these warnings.
·
Suspension of
HIPs would still allow for EPCs: The Government claims
that HIPs are necessary to meet an EU Directive which
requires Energy Performance Certificates (EPCs). Yet in
Northern Ireland since the start of July 2008, such
Certificates have quietly been introduced for home sales
without HIPs. Whitehall’s own Better Regulation
Commission has slammed the UK Government for “gold plating”
the EU Directive on EPCs, and imposing “additional
administrative burdens [of HIPs] without adequate
justification”.
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