What has changed in the Government's plans for home information packs?

Until the government’s U-turn yesterday, home condition reports, akin to a traditional survey, were to be a compulsory part of the new Home Information Packs (Hips). Costing sellers up to £1,000 Hips, which will be introduced from June next year, also include local authority searches and a property's title deeds.

The Government announced yesterday however that the home condition report - the most expensive part of the pack - would no longer be mandatory.

From June next year, sellers will only be obliged to provide a "half-Hip" at an estimated cost of £150 to £200. This will include local searches, title deeds and an energy performance certificate, which must be introduced under European law.

Hips were supposed to speed up the house buying process, ensure that fewer deals fell through, help first-time buyers and reduce the scope for gazumping.

Why this u-turn?

The government appears to have scrapped home condition reports after 130 MPs signed a motion last week against the packs.

However, there were also concerns there would not have been enough inspectors to cope with demands for the home condition reports. Plans to train 7,500 inspectors are behind schedule: at the end of last month, only 232 inspectors had completed their training.

There had also been much criticism of the original scheme. Estate agents, chartered surveyors, and mortgage lenders said that the surveys would lack credibility amongst buyers, and that the cost of the packs would deter potential sellers causing a slump in the property market.

The Council of Mortgage Lenders had told ministers that many lenders would not be able to rely on the reports until 2008-9, meaning that sellers would still have to pay for a separate mortgage valuation survey in addition to the cost of a Hip.

Will home condition reports become compulsory in future?

Yvette Cooper, the Housing Minister, said that dry run tests on 14,000 home information packs with searches would be required before the home condition report could become mandatory.

Ms Cooper said that the government was looking for a progressive voluntary take-up of the reports. However, she added that the reports would still become mandatory if the industry failed to make a success of them.

What if I still want to have a home condition report?

The Association of Home Information Pack Providers (AHIPP) intends to introduce Hips, including a home condition report, from the end of this year.

Mike Ockenden, Director General of AHIPP said: "The fact that Hips will still happen on June 1st is good news for the consumer. A recent survey by an AHIPP member Your Move found that 85 per cent of consumers would welcome the Home Condition Report (HCR) as part of the pack - the Government’s decision to allow the HCR to be voluntary at the start is wholly unnecessary.

"It is our firm belief that there will be consumer demand for the HCR and it will become mandatory."

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