My right honourable friend the Minister for Housing and Planning (Caroline Flint) has made the following Written Ministerial Statement.

I am today laying amendments to the Home Information Pack Regulations to extend the temporary first-day marketing provision, and to extend the temporary provision requiring HIPs to include the “lease” only and to “authorise” other leasehold documents, from 1 June to 31 December 2008.

The temporary first-day marketing provision allows a property to be marketed without a HIP where the documents required for inclusion in the HIP have been commissioned and paid for, or arrangement for payment been made and are expected to arrive within 28 days.

We introduced the temporary first-day marketing provision in order to help smooth the implementation of HIPs, and our evidence shows that it has been effective in doing this. However, we believe that a further period of flexibility provided by the measure would be prudent. I am, therefore, laying an order to amend the Home Information Packs Regulations to extend the provision from 1 June to 31 December 2008.

The temporary provision requiring HIPs to include the “lease” only, and to “authorise” other leasehold documents was introduced in response to concerns about delays and additional costs in obtaining leasehold information. This provision is also due to expire on 31 May 2008.

At the time the provision was introduced, we also commissioned Ted Beardsall, deputy chief executive of the Land Registry, to undertake a short assessment of the scale and nature of the problems with leasehold information and to advise on possible solutions. Ted Beardsall’s assessment confirms that there are a number of long-standing issues in the provision and cost of leasehold information, on which HIPs have thrown the spotlight; agrees that the inclusion of all leasehold information prior to marketing would cause serious difficulties; and recommends further work to resolve them.

What is clear from the assessment is that it would be premature to lift the current temporary requirement for the lease only, before carrying out the further work it recommends. I am also, therefore, laying an order to amend the Home Information Pack Regulations to extend the temporary provision for leasehold requirements from 1 June until 31 December 2008.

In the interim period, I have asked Ted Beardsall to convene a working group of key industry representatives to develop the options identified in his assessment into practical solutions in respect of:

the type of leasehold information that should be required within a HIP, and the form this should take, having regard to the information that buyers need, their availability and costs; and

practical steps for helping to establish good practice for landlord and managing agents in the provision of leasehold information.

The working group will report to the Housing Minister in order to prepare and introduce final measures from 1 January 2009.

Home Information Packs were introduced to bring useful information up front in the home buying and selling process to increase transparency and create a better consumer experience of buying and selling a home. We are already seeing positive benefits from HIPs:

lower up-front costs for first time buyers;

greater competition in the property searches market leading to reductions in costs to consumers—over 80 local authorities now set lower searches fees, some by as much as £120;

over 700, 000 homes now have energy performance certificates (EPCs);

on average £300 per dwelling saving if their EPC recommendations are implemented; and

over 640,000 HIPs produced, the majority within seven to 14 days.

The amendments I have announced today, together with the extension of insurance cover for property searches which I announced on 6 March, will bring all temporary measures within the same timescale, providing industry with the certainty that the implementation of HIPs should be complete from 31 December 2008.

However, it is clear from our area trials and analysis of our monitoring that more needs to be done to ensure that consumers realise the full benefits of HIPs; in particular, to ensure that consumers get to see and are able to use the HIP. Over the coming months, therefore, we will also take action to:

further build on the quality of the HIP, working with industry in developing innovative solutions to enhance the current product; and

ensure that consumers see and fully benefit from the information contained in the HIP early in the process, and encourage better practice standards and services consumers get.

Consumers want more general information about the property they are looking to buy—information they can relate to. Although, the current HIP contains information that can be helpful to consumers and professionals alike, it is clear that we can go further in providing consumers with easily accessible information that will help in their decision to buy a home. Information on access, boundaries, changes made to the property and fixtures and fittings are currently authorised for inclusion in the HIP. However, this information is not currently being provided as part of the majority of HIPs.

In order to maximise the potential of HIPs in providing consumers with the information they want, we will develop, in partnership with the property professionals, means for capturing consumer-friendly information for inclusion within the HIP. This will draw on the lessons learnt from our area trials and consumer focus groups.

Industry stakeholders are also actively developing complementary initiatives to build on the content of the HIP, including an “exchange ready pack”—a pack with consumer-facing documents and legal information, including a draft contract, to enable swift exchange and completion once an offer has been accepted. We will continue to work with our stakeholder panel to consider this and other initiatives for building on the quality of the HIP.

We recognise that many agents are not showing prospective buyers the HIP and that consumers are not requesting to see it. We have asked the industry to respond to this consumer need by working with us to promote higher and consistent standards of practice that deliver better services to consumers, and to raise consumer awareness of the service standards they should expect and what they can do if things go wrong. In particular, we will:

work with our stakeholder panel to support the RICS, the Law Society, the NAEA and other stakeholders which are currently exploring what can be done to bring together best practice into a single set of standards that consumers can expect from property professionals in the home buying and selling process; 

work with the industry to ensure that agents and HIP providers understand and act on the requirement to prepare the “basic HIP” as soon as the EPC is produced, so that it is available to potential buyers early in the process; and

consider what more might be needed to ensure that consumers are protected throughout the home buying and selling process.

I believe that these measures will provide greater certainty and stability to consumers and industry about the operation of HIPs.