THE government has been warned that its decision to extend home information packs to every home in England and Wales could have dire consequences for the housing market and first-time buyers.

From December 14, the controversial Hip scheme, which already applies to properties with three bedrooms or more, will be introduced for one and two-bedroom homes.

Anyone selling a home will have to pay between £300 and £500 for a Hip, raising fears that people will decide to withdraw their sales at a time when the market is already slowing.

This could make it even harder for struggling first-time buyers to get a foot on the property ladder.

Stewart Lilly, president of the National Association of Estate Agents, said sellers were already faced with huge expenses as they traded up, most notably with stamp duty.

“The cost of a Hip is an unfair and unnecessary extra. If sellers stay out of the market, reducing the supply of more affordable properties available, then the situation will be even worse for first-time buyers,” he said.

The Royal Institution of Chartered Surveyors (Rics) said that the supply of houses for sale was already drying up because of the cost of Hips.

A survey by the institution in October, after the scheme was introduced for homes with three or more bedrooms, found that the supply of larger homes had fallen 75% in the southwest and 72% in the West Midlands.

It estimates that up to 300,000 properties will be taken off the market in advance of the extension of Hips to all properties.

Jeremy Leaf at Rics said: “Lack of smaller properties for purchase will force first-time-buyers to remain in the lettings market, where rents are already climbing at the fastest pace in over eight years.

“If the housing minister genuinely wants to improve the plight of first-time-buyers, she should not continue with this flawed policy.”

Housing minister Yvette Cooper has dismissed the criticism, saying the roll-out would help first-time buyers by providing them with more information.

The pack contains a home’s title deeds, local searches and an energy performance certificate which will give homes a rating between A to G – similar to the ratings on most kitchen appliances.