Prospects for the residential market in 2007 are a bit brighter writes Jeremy Gates - after the Government climbdown on Home Information Packs (HIPs).

Housing Minister Yvette Cooper gave vendors a let-off in July, which could save many more than £1,000 on Home Condition Reports (HCR), the most controversial part of HIPs which were to be required by law on all sales from June 1, 2007.

Her decision reflects on the wisdom of MPs who backed this scheme with a big Commons majority in November 2004 - while the House of Lords, suggested the scheme be voluntary.

It is also a victory for TV's Kirstie Allsop, mobilised for battle in recent months, and Tory leader David Cameron, who promised to dump the scheme if he ever wins power.

A big fall in the number of sales, anticipated from June 2007 and a potential threat to Government revenue, should also be avoided.

Trevor Kent, former president of the National Association of Estate Agents, welcomed the development.

He said: "I hope she will realise in due course that even this watered-down version of the HIP will be both expensive and unnecessary and I call on her to drop the whole concept before any more millions of tax-payers money is wasted."

Philip Davies, chief executive of housebuilder Linden Homes said: "The market could be tough in 2007 anyway as consumers face higher mortgage rates and heating bills.

"If vendors had been hit with HIPs, there would only have been a trickle of homes for sale after June 1."

The Government feared reform was impossible because of a shortage of newly-trained home inspectors - but vendors will still need Thermal Efficiency Reports (TER) for their home.

Inspectors can qualify for that task with a 12-hour online course - but many will surely scrap training altogether after this fiasco.

TERs - already dismissed as counting the light bulbs' in the industry - won't affect many sales, because few people choose homes on their likely energy bills.

One fascinating aspect of the HIPs fiasco was the sight of big firms positioning themselves to profit handsomely as HIPs heralded the new age of e-conveyancing.

As the scheme was derailed, fury came from the estate agents who backed HIPs.

For example, Spicerhaart, self-styled as The Largest Independent Network of Agents in the UK, was strongly backing HIPs in June to save buyers from hefty repair bills after moving in. HCRs, it maintained, would flush out all the problems in advance.

Now Spicerhaart chief executive Paul Smith is urging agents to boycott Thermal Efficiency Reports too.

Mr Smith said: "The role of the Home Inspector has effectively been scrapped, with energy companies able to train up employees within a week to produce an Energy Performance Certificate (EPC), as required by the EU on all property sales from 2009."

The other purpose of HIPs - to beat the gazumper' - was also gradually forgotten in the controversy. It was generally accepted HIPs would have little effect on gazumpers.

However the Consumers Association, which led the HIPs campaign, is unlikely to take this defeat lying down.

Officially, HCRs could be revived when enough Home Inspectors are qualified to produce them. But who will now invest thousands of pounds of their own in training courses to become Home Inspectors, with no guarantee of remuneration at the end and the Tories promising to dump the whole scheme?

The concept of HIPs isn't entirely flawed: getting all the necessary legal documents together before the sale is an obvious improvement on the present system, while some form of home condition survey, like car MoT certificates, could save costs which too many buyers incur when problems emerge later.

Pro-HIPs campaigners claim abortive costs by purchasers hit £350m a year - or £1m a day. It sounds shocking - but nobody really has a clue as to how much is lost in this way.

Many buyers delay the purchasing process to squeeze concessions from jittery vendors - though these benefits are never costed as an advantage of the present, much maligned system.

One big lesson emerges from this debacle: to succeed, Home Condition Reports must be acceptable to big lenders, thus removing the need for further surveys and cutting costs.

Lenders wouldn't accept HCRs as security for a loan - so if Yvette Cooper hadn't finally seen the light, this reform wouldn't have achieved much more than a huge increase in paperwork at vendors' expense.