Home Information Packs Chaos

Ministers have ordered an urgent review of the home sellers' pack scheme after warnings it could leave the housing market in crisis.

Consultants have been called in to salvage the scheme, in which sellers face paying £1,000 to produce a dossier of information on their houses before they can be put up for sale. Critics claim HIPs will make buying a property slower and more expensive by adding extra costs and bureaucracy.

More than 125 MPs, including former Labour ministers Frank Field and Kate Hoey, have signed a crossparty Commons motion urging Chancellor Gordon Brown to step in and put a stop to the project.

Loopholes in the legislation mean the new HIP will say nothing about the state of a house's electrical installation or possible subsidence, forcing many buyers to continue paying for their own surveys.

There are fears the scheme, due to be launched in June next year, could precipitate a slump in the housing market and leave the Treasury with a £5.6bn revenue shortfall.

Labour MPs also fear it could shatter public confidence in Mr Brown at the very moment he expects to take over from Tony Blair next summer.

The cross-party coalition of MPs, backed by academics, property companies and celebrities, is waging a fierce campaign against the scheme.

Yvette Cooper, the minister who was given responsibility for salvaging the scheme initially championed by Deputy Prime Minister John Prescott, will face MPs in the Commons today.

She is a close ally of the Chancellor and is married to Treasury Minister Ed Balls, Mr Brown's most trusted adviser.

She has asked her officials to find ways to reduce the cost of the scheme and to make it simpler to enforce. She has also brought in an outside consultant, named at Westminster last night as David Lamb, to review the policy - prompting speculation of an imminent climbdown.

Westminster sources insisted Miss Cooper remained committed to the principle behind the policy, which aims to make the complex process of buying a house easier but critics claim glaring loopholes in the rules make home information packs 'useless' and will force buyers to pay for their own surveys. The Electrical Safety Council, which campaigns for safety in the home, has already warned that the Government has not included ' important safety measures' in the regulations governing the packs.

It said it was 'disappointed the Government had chosen to ignore electrical safety'.

Malcolm Harris, chief executive of builders Bovis, described the scheme as 'totally political' and said the HIPs would lead to a fall in sales. 'I can't see how they will benefit consumers at all,' he said.

Tory housing spokesman Michael Gove said: 'These packs will be useless. The Government's plans for HIPs are unravelling day by day. 'The Treasury must know that if these plans go ahead without a fundamental review the impact on the housing market and economic stability could be traumatic.'