The Government’s controversial home information packs (Hips) are to be extended to cover all properties by December 14 despite warnings from the industry that the market could “grind to a halt”.

Yvette Cooper, the Housing Minister, said yesterday that the extension to all two-bedroom and one-bedroom properties would help first-time buyers. But surveyors gave warning that the extra £350 to £500 cost of the packs to sellers would wipe 300,000 properties off estate agents’ books within months.

Hips, which were first introduced for four-bedroom houses in August, aim to speed up the selling process by giving potential buyers advance information.

The packs, which include energy performance certificates, title deeds land search and leasehold details, were extended to three-bedroom properties in September.

The policy has already been delayed twice because of the lack of assessors, and the housing industry says that the first wave of Hips has affected the market.

The Royal Institute of Chartered Surveyors claimed yesterday that 67 per cent of its members had seen a fall in the number of new properties with three or more bedrooms coming on to the market compared with the previous year. The fall was greater for those with three and four bedrooms than for smaller houses, it maintained. Jeremy Leaf, a spokesman for the institute, said: “With prospective buyers and sellers taking a wait-and-see approach to moving, activity in the housing market is grinding to a halt.”

Ministers have also come under pressure from Hip providers who have invested money in training assessors and wanted the scheme to be brought forward for all homes.

Ms Cooper said that 60 per cent of the market was already covered by Hips and there were enough accredited assessors to provide certificates for all properties bought and sold. She also claimed that the Government had independent evidence that any impact on the market would be temporary.

Grant Shapps, the Shadow Housing Minister, said: “At a time when the housing market is under great pressure, the last thing anyone needs is the introduction of Hips on one and two-bedroom homes. This latest move will dismay hard-working families because it increases instability in an already fragile market.”

Earlier Ms Cooper backed plans from John Calcutt, the former head of English Partnerships, to fast-track the building of hundreds of thousands of homes in town centres and cities over the next eight years.

The Calcutt review on housing provision says that developers should be given much tighter timetables to build homes and would only be given access to public land if approved by independent customer satisfaction surveys.

Mr Calcutt’s report concludes that Gordon Brown’s ambition to build 240,000 homes a year by 2016 and create eco-towns is attainable without wrecking the green belt, but only if the Government lays down much stricter guidelines for property developers and councils to ensure that homes are built more speedily and companies do not “bank” land. In addition companies would only be given access to public land if approved by independent consumer satisfaction surveys.

Ms Cooper backed John Calcutt’s recommendations for tougher planning laws on building starts. Developers only have to dig a trench within three years of signing a contract before planning permission expires. But there are no completion deadlines. Ms Cooper will consider proposals that firms would have to lay out a much greater capital investment initially and planning permission could be limited to one or two years.

In addition the Government will boost development on spare public-sector land by ensuring that a tight timetable is part of any contract between a council and a private developer. Ms Cooper is likely to endorse plans for town halls to enter contracts with just one developer for both social and private housing across an entire council.

Mr Calcutt’s plan could lead to more high-rise developments and fewer gardens in town centres with some building extending at town edges. But he opposes urban sprawl generally and has recommended protecting green belt land and building instead on brownfield and undeveloped greenfield sites. “New settlements and edge of town development will be needed if the target is to be met, but we must avoid urban sprawl: it is wasteful, both of valuable green space and of potential value in our urban areas,” Mr Calcutt said.

Ms Cooper said: “We urgently need to build more affordable, greener homes for this and future generations. But we cannot afford to wait for developers who may drag their feet once planning permission has been granted, hoping to benefit from increases in land value. We also want to stamp out any potential for hidden land banking by making sure that land assets are completely transparent in financial statements.”

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