HOME information packs (HIPs) were conceived in the Labour Party manifesto of 1997 and were originally aimed at ending gazumping.

The Government’s subsequent review of the housing market showed that 28 per cent of all transactions fell through before exchange of contracts, nearly half because of poor survey or valuation reports. The HIP was born in an effort to speed up and simplify the process.

There is no doubt that there will be financial opportunities for some. This will be especially true if a prospective purchaser needs legal advice, such as being talked through the contents and ramifications of a home condition report before putting in an offer.

Surveyors may also find themselves with more work than they can handle when a buyer decides that they are not prepared to take a report commissioned by a seller on trust, even though a home inspector is independent, and they want a full structural survey.

There is no valuation element within the home condition report, except a figure for the basic rebuilding cost, so any lender who is advancing more than, for example, 75 per cent of the property’s value may still insist on a valuation survey.

The Government is working hard to allay this possibility by ensuring that the survey will be of a standard that will equate to a valuation report.

A more general concern about the introduction of HIPs is what effect it will have on the market. There is a strong possibility that it may cause a huge bubble effect, similar to that experienced in 1988 when double taxation relief was abolished.

Those working in conveyancing at the time were absolutely inundated with work as people rushed through their property purchases before the guillotine fell. The moment the regulations came in, the market stalled and prices plummeted. The same could happen again: if HIPs are introduced on August 1, 2007, for example, many will rush to put their homes on the market by July 31 for the double benefit of buying a property that has been marketed after that date which has a HIP, while at the same time having their purchaser bear the conveyancing costs on the sale. After all, we all like to get something for nothing.

Until we have the final version of a HIP in front of us and can judge for ourselves whether we are prepared to rely on it for the largest financial decision we will ever make, caveat emptor, or buyer beware, has never rung truer.

Explore UK News

• Crime News

• Education News

• Health News

• Science News

• Scotland News

Times Recommends

• An officer and a gentle woman
• Dame Helen Mirren is worthy of the Epidaurus
• Foods that can help to prevent swine flu