HIPs replacement

The Association of Home Information Pack Providers today welcomed the extension of HIPs to all house sales.

Which just goes to prove one thing: as soon as the government provides an opportunity for rent-seeking behaviour, a lobby group will spring up to protect this nice little fleecing of the public.

The Government claims that Home Information Packs “are bringing benefits to consumers”. But if the benefits are so great, surely the clever home seller would already be providing one off their own bat?

Maybe the truth is that property sales get along fine without this pointless regulation?

5 Responses to “HIPs replacement”

  1. Nick Evans says:

    Estate agents lobbying against increased information for purchases, which might have the effect of reducing sales and, therefore, their commissions is of ccourse another example of this rule.

  2. vaci says:

    In a free market, the amount of information available to the buyer is reflected in the price of the product.

    If purchasers want more information, then they can ask the seller or their agent. If the seller won’t provide the information, then the price at which the property can be sold will go down (to compensate the buyer for the additional risk).

    There’s a fundamental difference between the two sides in this debate:

    Estate agents generally offer a useful service to buyers and sellers of property. The public can choose whether or not to pay for their services.

    HIPs providers offer a product of dubious value the purchase of which is legally enforced by the government.

  3. Nick Evans says:

    One of the basic assumptions of a free market is that you have a perfect flow of information. Without this, the market is distorted and its benefits do not necessarily exist.

    It seems odd that anybody would simultaneously champion a free market and propose limiting the amount of information available to participants in the market. Unless, of course, you have an dogmatic view that any government intervention reduces the freedom of a mrket, regardless of its actual effect.

  4. vaci says:

    It is not correct that a free market requires perfect information. It simply requires that the transactions are mutual, uncoerced and not fraudulent.

    A participant who is not confident about what they know can simply withdraw or offer a lower price.

    A market with perfect flow of information is called, unsurprisingly, a “perfect market”.

  5. Nick Evans says:

    And a “free market” that offers the benefits claimed for a perfect market, but without satisfying the many assumptions would appear to rely on wishful thinking.

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