The government’s decision to extend the compulsory Home Information Pack (HIP) scheme to one and two-bedroom properties from December 14, 2007, is expected to further slow down the already affected housing market.

The government’s decision to extend the compulsory Home Information Pack (HIP) scheme to one and two-bedroom properties from December 14, 2007, is expected to further slow down the already affected housing market. It is being conjectured that the legislation will add to the woes of both the home buyers and sellers bringing all activities in the housing market to a standstill.

The government has been introducing the HIP scheme in phases – it was first brought in for four-bedroom or larger houses on August 1 and for the three-bedroom homes from September 10.

Owners of flats and relatively small houses will have a tough time selling their homes. As reported by owners of larger homes, compiling the HIP (also known as a seller’s pack) is a rather lengthy, protracted process.

The going gets tougher for owners of smaller homes, especially if they are leasehold flats. A minimum time-frame of two-weeks is required just to obtain the leasehold information. Of course, for the initial six months the house-sellers will enjoy a special privilege – in this period, the leasehold documents will suffice and they will not have to run helter-skelter for the management and insurance records.

As regards buyers, their fate too will be adversely affected by the introduction of the mandatory HIP scheme. First-time buyers especially will be hit by the scarcity of houses/flats for sale and they will be left with no other option than renting an accommodation. Considering the continually rising rents, this certainly is a bad news for the aspiring buyers.

The Government’s aim in bringing in the seller’s pack was to help buyers. So far, however, the UK housing market has not benefited from the HIP scheme as is evident from the falling numbers of houses for sale in the three/four bedroom categories.

In the present scenario of global credit crunch, the situation in the housing sector will in all likelihood deteriorate. With first-time buyers as well as buy-to-let investors finding it difficult to obtain mortgages, prices of smaller homes and flats will nosedive.