In another Hip story this morning, the Council of Mortgage Lenders has clarified the red herring anti-Hipsters have been touting and made it clear they believe Hips will be used for valuation purposes.

One of the more persistent Hip rumours of late was that mortgage lenders would not accept the home condition report contained in the home information pack as a means of obtaining a valuation. If this were not to happen then homebuyers would have to pay for a valuation (as they do already) even though the seller had already provided a Hip.

This red herring has been one of the main weapons in the anti-Hip protestors, particularly lately, with TV property celebrity Kirsty Allsopp throwing her lot in with the Tory party and saying it would particularly affect first-time buyers. See our story: Home info pack attack ‘unsubstantiated’

The latest press release from the CML appears to clear up the situation saying that, over time automated valuations taken from Hips will become available. It does not think this will happen at the first introduction though.

The report said:

‘There is still a great deal of work to do to implement HIPs. For lenders, the biggest question is on how to interact with the home condition report (HCR) that will be contained within the pack.

The CML is pleased that the government is now indicating that it expects to give lenders free access to the databank of HCRs. But HCRs are not a substitute for lender valuations - they do not contain an assessment of value. Lenders may be able to use automated valuation systems to establish value in some cases, but not all.

Over time, automated valuations are likely to become more common, but at the time HIPs go live there is still likely to be a sizeable proportion of properties on which lenders will wish to commission physical inspections for valuation purposes.’

However, Nick Salmon of anti-Hip campaign group SPLITA reads the CML statement another way and points to the "in some cases, but not all" wording. To further his point Nick notes that in the USA where automated valuation modules have been in use for over a decade, they still have over 40% physical valuation inspections.

It seems the debate is set to carry on for a while yet. Watch out for real sparks as the trials take place later this year.