My right honourable friend the Minister for Housing (Margaret Beckett) has made the following Written Ministerial Statement.

For most people, buying or selling a home is the most important financial transaction they will undertake. It is often also one of the most stressful and difficult. Home information packs (HIPs) were introduced to give consumers more information from the outset of that transaction, making the process fairer, faster and more transparent. Existing regulations that allow for a delay in providing a HIP and for transitional insurance cover expire at the end of December. I propose to extend them until 6 April 2009.

This Statement outlines the changes that we propose to make to HIPs to make them work more effectively from that date, both by expanding the content and ensuring that they are available right from the start. The proposals give the industry and prospective sellers time to prepare for the changes.

Expanding HIP content

Following consultation, I am today laying an order amending the regulations so that from 6 April 2009 HIPs must include a property information questionnaire. This will give buyers more useful information to help them to make decisions about whether to view a property and, ultimately, whether to make an offer. The forms have been designed to be quick, easy and straightforward for sellers to complete.

For leasehold properties, the property information questionnaire will include a summary of the leasehold arrangements, replacing previous requirements. I am also laying an order making the temporary leasehold information provision permanent from 1 January 2009. This means that a copy of the lease will continue to be the only extra information required for leasehold properties.

Although take-up of home condition reports has been disappointing, we know that people want to know about the condition of homes before they commit to buy them. I will establish a working group to explore options for making sure that consumers have appropriate information about a property’s condition. This will build on the work carried out by the stakeholder panel to develop market-led models that can be delivered by existing practitioners, including home inspectors.

Making HIPs available sooner

It is essential that buyers are able to see the information in the HIP as soon as possible. However, with the temporary first day marketing provision, while sellers must order and pay for the HIP, agents may take up to 28 days before making it available.

As a result, some buyers looking to move quickly are making decisions about purchases without ever seeing the HIP. Some sellers are paying for a pack that they never receive. And some estate agents are said to be using this period to avoid complying with the relevant regulations on marketing properties. We are therefore ending this first day marketing provision from 6 April 2009 so that all buyers will get the information that they need as soon as possible.

We recognise the present difficulties in the housing market. But that makes it even more important to remove uncertainties for buyers and sellers, speeding up and smoothing out the process. So this change will mean that sellers will not face unnecessary delays. A recent survey of 16,000 transactions showed that, where a HIP was available, exchanges were, on average, actually completed six days quicker.

The information required for a basic HIP, which a seller will need to start marketing their property, is readily available in three to five days. Sellers will still have up to 28 days to provide certain information that may take longer to compile such as the property search. Nor will this mean extra burdens for estate agents—they will still be able to advise potential clients about properties that they expect to be coming on to the market soon. Independent research by Europe Economics has already concluded that HIPs do not have an impact on house prices or transactions.

Ending transitional insurance cover provision

This provision was intended to enable the private sector to conduct property searches in local authorities where access to relevant data was restricted. But in practice too many search providers are using this provision even where the data are readily available. Lacking the relevant information, in some cases buyers have had to pay for a second search to be carried out by the local authority. This is not acceptable. Wherever possible, consumers need information rather than insurance and they should not have to pay for it twice.

My honourable friend the Member for Hartlepool has already laid provisions introducing a new charging regime for local authority property searches data. As charges become fairer, private sector searchers will have easier access and should therefore not need this insurance cover, which will end on 6 April 2009, coinciding with the introduction of the property information questionnaire.

I want to make sure that consumers find property searches as informative and helpful as possible. I have asked Ted Beardsall, former deputy chief executive of the Land Registry, to convene a working group to consider how these might be made simpler and more easy to use.

Better enforcement and service standards

Consumers should be in no doubt that we will protect their rights and champion their interests where sellers or estate agents try to avoid or neglect their responsibilities and obligations. Estate agents who break the law face sanctions.

The changes introduced today will make it easier for local trading standards agencies to identify specific cases of non-compliance and enforce the requirements.

We also want to make sure that both buyers and sellers get a good service from professionals working in the industry. They should be clear about the standards of service they are entitled to, how the industry is regulated and where to go if they have concerns or complaints.

So I am pleased that the Office of Fair Trading will be conducting a comprehensive study of home buying and selling, looking at competition between service providers and how consumer interests are served. My department will work closely with the Department for Business, Enterprise and Regulatory Reform to support this study, which should provide important evidence about how effectively the industry is working at present and whether further reform may be needed.

These changes will make sure that consumers are better protected and better informed. Consumers will get the vital information they need when they need it, with a copy of the HIP available upfront and a property search that is fit for purpose. This will give them greater value for money and greater peace of mind. Industry bodies and property professionals will also benefit from greater certainty about how the process should work. The department will be preparing and communicating advice to help consumers and industry to understand and to plan for the changes.