Everything about Home Information Packs (HIPS)

Mr. Greg Hands (Hammersmith and Fulham) (Con): I am pleased to have this short debate on home information packs, better known as HIPs. This is not the first time that they have been debated in this place and it will probably not be the last. Given the number of hon. Members who wish to speak, I shall try to be brief and not cover all the objections that I and others have to HIPs. Suffice it to say, they are included in early-day motion 2240, which is entitled “Introduction of home information packs” and was tabled by my hon. Friend the Member for Surrey Heath (Michael Gove). I also pay tribute to my hon. Friend the Member for Bridgwater (Mr. Liddell-Grainger) for his recent excellent ten-minute Bill on the subject.

Having spoken to a variety of groups from all sides of the HIPs debate in recent days, I have picked up a common theme, which is perhaps best described by an individual whose role it is to promote and sell HIPs but who unsurprisingly does not wish to be named this afternoon. He told me that doing something to help house buyers was long overdue but that with HIPs,like other new Labour policies, the execution was fundamentally flawed.

HIPs are a new stealth tax, dressed up as a proposal to help hard-pressed buyers in the housing market. However, rather like the huge stamp duty hikes seen in recent years, which were introduced in the name of cooling down the housing market, while netting the Chancellor huge amounts of additional funds, HIPs will create a whole new tax scheme for the Treasury. Assuming annual home sales of around 1.3 million, it will take an average HIP price of only £770 to create a new billion-pound industry in this country. That would result in an additional £175 million going to the Chancellor each year in VAT. Moreover, the tax is regressive, as it seems quite possible that the cost of putting together a HIP for a studio flat might be the same as for a mansion.

My first objection to HIPs is therefore that they add another part to the complex process of buying and selling a property and will probably not remove any of the other hurdles. Currently, some 80 per cent. of buyers do not have a formal or second-level survey. Those who are borrowing to fund the purchase—that is, the home buyers—consider the lender’s valuation survey, which is, after all, designed solely to protect the lender’s interest, to be sufficient. However, lenders are not compelled to accept the new home condition report as a basis for valuation, and many lenders have signalled that it will be no substitute for a full valuation.