A report claiming to have found a loophole in rules governing Home Information Packs (Hips) today has sparked fresh controversy over the beleaguered scheme.

The report from the Royal Institution of Chartered Surveyors (RICS) said that new regulations published by the Department for Communities and Local Government (DCLG) on Monday do not require sellers to produce a Hip when contracts are exchanged.

RICS claims that under the new DCLG rules sellers need only prove they have ordered a Hip at the point of sale. The regulations do not say that a completed Hip must be acquired, potentially saving sellers from having to pay for a pack, RICS said. Only the Energy Performance Certificate (EPC) will be mandatory by exchange of contracts.

It branded the packs a "farce" and said the scheme is "fundamentally redundant."

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But a spokesman for Communities and Local Government (DCLG) department said that the RICS claims were false, while the Association of Home Information Pack Providers (AHIPP), said that today’s RICS report was "nothing more than the typical anti-Hip propaganda." AHIPP said that the allegation was "totally unfounded".

Jeremy Leaf, a RICS spokesperson, said: “RICS members have been pressing for clarification on the new regulations, for fear of breaking the law. We have been forced to tell them that to the best of our knowledge, selling a house without a Hip would not be illegal during the interim period. Unless the Government can show us the regulation that says a property cannot be sold without a Hip, consumers and industry will be left to draw their own conclusions. This will lead to two groups of consumers – those who pay for a Hip and those who legally get round the rules.”

The Government has faced calls to abandon or delay the introduction of the packs, which will contain an energy rating that will rank homes from A to G.

Last month, only days before Hips were to become compulsory, the Government announced that the introduction of the scheme would be delayed from June 1 to August 1 and restricted to four-bedroom houses.

Plans to include a compulsory, more comprehensive Home Condition Report (HCR) were scrapped last year after complaints that buyers would not trust it and mortgage lenders would not take it into account.

Earlier this week Ruth Kelly met representatives of the Home Information Pack industry, which warned the Communities Secretary that she faces a multi-billion claim if she scraps the scheme.

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