Housing minister Yvette Cooper warned that some estate agents and other professionals were in danger of being left behind as innovative organisations take the lead in transforming home buying and selling to provide a better service for consumers.
'Over 150 organisations have said they are interested in joining the next stage of the dry run this autumn and 49 have already signed up. It's an invaluable opportunity to test and improve the service they can offer to consumers.
'The level of positive interest and involvement we are receiving so early on in the HIP initiative should worry those who are dragging their feet. Miss this moment and they risk being left behind by a fast changing market.'
HIPs - which are being introduced 1 June 2007 - have been designed by the government to cut waste and costs for buyers and sellers which currently adds up to£1m a day. They will:
* Ensure first time buyers, struggling to get their first foot on the property ladder, get HIPs for free
* Cut waste and duplication by preventing several prospective buyers paying again for the same searches and surveys when sales fall through.
* Provide quality reliable information at the beginning of the process and cut failed transactions which currently waste£350m each year.
* Include energy performance information in the Home Condition Reports, preventing the need for a stand alone survey.
The cost of a HIP will be set by the market - not government. Adding up what the market is currently charging for existing products similar to the components of a pack suggests a cost of around£600-700 plus VAT but market watchers are predicting that costs will be driven down by competition.
Ms Cooper said: 'Competition will have a big impact on the market - ASDA, for example have just announced they are entering the estate agency market and their offer includes a free pack.
'As we move towards the dry run, consumers will demand competitive offers from their suppliers - industry must rise to this challenge.'
The programme also offers new career opportunities with a Diploma in Home Inspection. Currently 4,400 people are in training, many of whom are surveyors adding the qualification to their existing portfolios.
The length of training required depends on previous experiences but the average existing surveyor can be trained in around 5 days plus the time taken to assemble a portfolio of work. A Government report published today, shows that between 5,000 and 7,400 Home Inspectors are needed by 1 June 2007.
Details of the contents of Home Information Packs will be placed before parliament as secondary legislation in June 2006 and an assessment, showing the impact of this new legislation will be published alongside.
About Home Information Packs
As from 1 June 2007, homeowners will be required to provide a HomeInformation Pack when marketing their homes for sale throughout England and Wales. This will help reduce the estimated£1m which is wasted each day because of failed transactions. The Pack will include a Home Condition Report, terms of sale and any search details. An energy effiency rating will be included in the report, giving consumers the choice to assess the likely running costs of a property before they buy.
1. Consumer Benefits:
Provide transaction improvements by reducing the abortive costs to consumers and the industry attributable to failures caused by survey or valuation inspection findings.
Improve the condition of the housing stock by reducting the incidence of unexpected repair bills and encouraging better maintenance of homes.
Provide greater consumer choice by reducing the entry costs to first time buyers and creating a market of serious sellers.
2. Cost of Home Information Packs:
The Packs will cost around£600-700 plus VAT. Most of this cost is not new and is being met at present by both sellers and buyers.
The Home Condition Report has been developed in consultation with industry, including lenders, so that they can use the information contained in it to inform their valuations. This will mean fewer separate on site valuations inspections and reduce costs for consumers.
The proposed content of the pack includes searches and other information which is currently paid for by the buyer. Where several buyers pursue the same property, then these costs are repeated by each buyer. Under the new arrangements all prospective buyers will be able to access this information up front as supplied by the seller..
3. Market Impact:
Home Information Packs will make the market more efficient and certain. They will make home buying more affordable and sustainable for first time buyers, who will receive full details abiout the property at no cost to them.
Major players are now investing heavily in Home Information Pack systems and intend to market these well in advance of packs becoming mandatory. This means sellers and buyers will not have to wait until June 2007 before they can benefit from packs immediately before implementation of the mandatory scheme in June.
Industry accepts that sellers will generally not pay up front for Home Information Packs. Thus there is no impediment to sellers marketing their homes with the Packs both before and after implementation.
4. Home Inspectors/Certification Scheme:
Only inspectors qualifying under certification schemes approved by the Secretary of State will be able to prepare Home Condition Reports. The scheme will be responsible for monitoring and auditing inspectors' work. This will be robust to ensure that standards are maintained and the reports can be trusted.
If inspectors fail to maintain the correct standard or act in a way that is partial to one party contrary to the rules of the scheme, their certification will be removed, along with that their ability to produce Home Condition Reports.
5. Home Condition Report:
The Home Condition Report will be an objective report on the condition of the property that buyers, sellers and lenders will have a legal right to rely on. Home Inspectors will have to have suitable insurance that will be backed up by insurance of last resort provided by the certification scheme.
6. Integrated Government Policy Benefits Home Information Packs support the Government's wider reform agenda, including raising the energy efficiency of the housing stock, and improving its state of repair, as well as contributing to sustainable home ownership and communities.
7. A timeline was published on 16th March 2006 - for full details please visit http:homeinformationpacks.gov.uk or http:www.homeinformationpacks.gov.uk