BSA: Voluntary home condition reports

Wednesday, 19, Jul 2006 10:49

The Building Societies Association welcomes plans by the Government to make the home condition report (HCR) part of home information packs (HIPs) voluntary.

A survey of building society chief executives in May 2006 found that 84% of them believed that HIPs would have a negative effect on the housing market and that they should consequently be made voluntary.

Yvette Cooper, the DCLG Minister responsible for HIPs, announced the climb down yesterday.

The HCR was going to be one of the most important parts of the HIP. It was also going to be one of the most problematic and, for sellers, the most expensive. Making the HCR voluntary will allow the market to determine the demand for such reports and give both buyers and sellers the opportunity to see how they will work in practice. And critically, it will also avoid the potential disruption of the housing market that many, including BSA, have forecast for next year as a consequence of the HCR requirement.

Making HCRs voluntary will also allow HCR providers to ensure that what they are providing fully meets the needs of both buyers and sellers, and to evolve to meet market demand. And if sellers who provide buyers with a HCR find that they realise the benefits that Government claim, then demand for them will take off, without the risks that compulsion entailed.

Neil Johnson from BSA commented "the Government's decision yesterday represented welcome recognition of the possible dangers that HCRs posed to the housing market. We hope and trust that they will be similarly realistic with the implementation of the rest of the Home Information Pack."

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Note to Editors

1. The Building Societies Association (BSA) represents all 63 building societies in the United Kingdom. Building societies have total assets currently exceeding £270 billion and hold residential mortgages of over £185 billion, just under 18% of the total outstanding in the UK. Societies hold about £180 billion of retail deposits, accounting for just over 19% of all such deposits in the UK. The building society sector employs over 46,000 full and part-time staff and operates through just under 2,100 branches.

Over two thirds of building society chief executives responded to a survey in April 2006 which sought their views on the introduction of home information packs. Of these, 84% said that they thought HIPs would have a negative impact upon the housing market.