Should HIPs be made voluntary?

Making HIPs voluntary is not a viable option unless we all wish to be transported back into the dark age. The whole idea behind the HIP was to start the process of improving a home buying and selling process that was crying out for improvement. In fact prior to the introduction of the HIP the last change was back in 1925! If it was as easy as saying let us leave it to solicitors and other property professionals to make change through the voluntary implementation of processes such as the HIP requirements why I would ask did we not see any improvement prior to the HIP? The truth is all prior attempts such as the Law Society National Conveyancing Protocol have failed miserably. Consumers clearly deserve a more certain and streamline process for moving home but without regulation to require all solicitors to work in the same way whether they are based in London or Newcastle this will never happen. We have a system that is based on chains of transactions - if one party in that chain used a HIP and one party did not the time from acceptance of offer to exchange will only be as fast as the one without the advantage of upfront information. I am not a lover of regulation, in fact there is too much of it, however sometimes regulation is necessary where it can be shown that without it improvements for the benefit of the consumer will not come about. Whilst the Conservatives are committed to cutting red tape – regulation that hinders businesses without helping consumers, they do support regulation which improves the efficiency of markets. Good regulation should encourage competition and productivity, transparency and consumer protection. So in short the HIP and the basis this presents for further reform must and can only be built on regulation.

AHIPP Mike Ockenden talks to HipConsultant.co.uk about the future of HIPs

The future of HIPs is major topic and one which is receiving a large amount of interest, particuarly given the forthcoming Conservative Party conference.  Follow the link to fnd an excellent update on what is happening from a man who is speaheading the campaign - 'adapt rather scrap'.

http://www.hip-consultant.co.uk/blog/future-of-the-hip-mike-ockenden-ahipp-interview-123/

David

Estate Agents Beware!

Trading Standard Officers are on the offensive and are ready to scoop down and impose fixed fines on estate agents for failure to comply with the Home Information Pack Regulations that have now been on force for over two years.

Officers have already uncovered non-compliance following visits to around forty estate firms of estate agents in the Birmingham area. Fixed penalty fines were imposed and non-compliance was found to be running at around 10%.

A fine of up to £200 can be imposed for failing to comply with the Regulations each time a breach is uncovered. Technically therefore the agent can be fined £200 for each day the agent is found to be in breach.

The officers have taken HIPs away for compliance checks that are to be carried out in conjunction with the Property Code Compliance Board – the ‘HIP’ Regulators.

Further unannounced visits of this type are planned and will be taking place around the Country over the next couple of months.

Non-compliance exists in every industry and given that ‘policing’ up until now had been reactive as opposed to proactive, the level of default is not as high as one might expect, particularly given the repetition of unhelpful calls from the Conservatives to ‘scrap’ HIPs.

This news comes at a time when Connells, a national chain of estate agents, has announced that following a survey of a large number of transactions (over 30,000) they are now able to provide irrefutable evidence that the HIP has helped to reduce the time it takes to progress a conveyancing transaction from acceptance of offer to exchange of contract by at least 7 days. This represents a significant improvement in the system and must even for the most doubting of estate agent demonstrate the importance of compliance and of making sure the HIP is kept and improved should, as is likely, there is a change of Government.

 

EPCs around Europe

How is the EPC being implemented throughout Europe?

The majority of member states have now implemented the Directive, making EPCs compulsory when buildings are sold or rented. However, there are discrepancies in the way the Directive is implemented as well as the composition of the EPC and the point at which it is required.

Many member states require an EPC to be ‘available’ at the point of sale, but not at point of marketing. The proposed re-cast of the Directive, currently under consultation, would, if adopted, make EPCs mandatory at point of marketing.

Austria

From 1st January 2009, an EPC has been mandatory when buildings are sold or rented, as well as for new buildings and major renovations. The EPC must be ‘made available to the owner or to the potential buyer or tenant by the owner’.

The certificate is valid for ten years, and the data is stored in a national repository, used for research into energy efficiency.

France

Since November 2006, for residential buildings the EPC must be available to the seller as soon as the house is on the market, and must be offered to each prospective buyer. Energy consumption may be measured using utility bills over a three year period.

Czech Republic

EPCs only mandatory at point of sale for new or newly renovated (after 1st January 2008) buildings. There is a mandatory central repository for EPCs. Energy certification has been commonplace on a voluntary basis since 2000.

Italy

EPCs became mandatory at point of sale for all properties sold or rented in July 2009. The content of the EPC is defined by municipal authorities.

Finland

Voluntary certification schemes predate the Directive and have achieved a good degree of take-up. Mandatory certification began in 2009, but remained optional for existing detached houses and blocks of six or less flats.

The re-cast of the Directive should bring about more consistency throughout member states; it should also help to bring pressure on the Conservatives to have a re-think about the HIP and the usefulness of the vehicle this provides in ensuring the delivery of the EPC as part of upfront legal packs.

Surely it must be to the benefit of both seller and buyer to have information on the energy efficiency of a property before important decisions about selling and purchasing are made. It provides a seller to undertake with or without grant aid energy improvements to a property to enhance the value of the property, and also presents a buyer with information to compare energy efficiency rating on properties under consideration.

To remove the EPC from the HIP and operate a system like the one in Northern Ireland as is proposed would clearly give rise to compliance issues as presently seen within the rental and commercial sectors. Keep the EPC within the HIP and add to the HIP additional legal documents to speed up the conveyancing process is the only viable option. Mr. Shapps kindly take note.

David

Thanks to Richard Gardner and his team at Quintus for the research on which this posting is based.

Agents blame HIPs for shortage of housing stock

I am sorry but I get so angry when I read Estate Agents blaming HIPs for the apparent shortage of housing stock.

It was reported this week that agents, particularly in the South East, are struggling to find enough stock to sell. Property finder for example has reported that the number of homes on the market this autumn is at its lowest since the aftermath of 9/11! Instead of looking at rising unemployment (the highest is has been for a very long time) and the lack of high LTV mortgages, agents are once again raging war on the HIP.

Ivor Dickinson, managing director of London agents Douglas & Gordon, was reported in the week saying: “We had 500 properties to sell last August and in the peak months it was probably around 800. Now we have 230. I am concerned. I expected to be flooded with properties in September and I’m not.” He blamed HIPs, including Property Information Questionnaires, for deterring sellers. He warned that the current market had been “a disaster waiting to happen”.

Let’s assume Mr Dickinson and other agents are correct, if the HIP is the sole and major cause why do agents not waive their charge for the HIP and absorb the cost within their commission. Many agents buy in the HIP for less than £180 plus VAT. Surely this is small price to pay for securing the housing stock which they badly need?

One of the problem with this simple but instant solution is that the same agents are as we know from the Which organisation are relying on the HIP to earn high commissions. Come on agents, you can’t have both ways!

So my message to agents who are still determined to blame the HIP for everything, is to do something about it and to start offering the HIP FREE of charge. Perhaps they will then begin to realise the fact of the matter is that there are far more significant and underlying economic factors which are at play here.

David 21/09/09

Search Price Increase?

The Ministry of Justice yesterday published its plans to revise the fee for a personal search of the local land charges register. There will be no change to the way in which the fee is set – it will remain centrally set, rather than locally determined – but the fee will increase to £22 from £11. The changes will take place from January 2010. But there is no certainty it will!

It should be noted that as the £22 fee represents a 100% increase in fee levels and in light of yesterdays confirmation from Lord Mandelson that new regulatory burdens should not be imposed upon businesses until 2011, CoPSO will be raising this with BERR.

Watch this space.

CLG Invite comment on EPDG2 Proposals

The CLG is considering a number of proposals were put forward regarding future developments with energy reports some of which affect and touch upon the provision and of delivery of EPCs. The proposals are:

Standardise a single SAP Methodology across all EU States
Standardise a single SBEM Methodology across all EU States
Reducing emission targets by 80% by 2050 across all EU states
Introducing a 0.1% Quality Audit on EPCs produced across each EU state
Outlining a common definition of Low Carbon Buildings and Zero Carbon Buildings

The CLG is inviting comment and suggestions. For further details of these changes and to submit your comments, please click on the link below: http://www.communities.gov.uk/publications/planningandbuilding/recastepbdconsultation

A Review of the Law Society’s Consultation Paper – ‘Improving Residential Conveyancing’

The Body that represents the interests of solicitors, the Law Society, has recently published a consultation paper entitled ‘Improving Residential Conveyancing’. The purpose of this is to invite the views of its membership on ideas/proposals it has for improving the home buying and selling process.

The timing of this consultation paper is questionable, given that apart from the radical and some would say brave introduction of the Home Information Pack Regulations, no significant change to the selling and buying process has happened since 1925. So why after all this time is the Law Society looking to review and seek the thoughts of its members on possible reform?

The answer lies in the changes that are to occur in last quarter of 2010 that will enable the likes of Sainsbury and Tesco to offer home buying and selling legal services. The Law Society has at long last woken up to the threat of competition. It is concerned (and for good reason) that unless it begins to take the lead in reform, a large number of its members may find themselves joining the queue of bankers and investors looking for alternative work.

So what is the Law Society proposing? To begin with it is saying that on balance there is really not too much wrong with the current system, as on the whole solicitors can be left to their own devices and procedures to deliver a satisfactory service. They do acknowledge however that failure in communication and delays on the part of some do cause the public to perceive the existence of a problem.

This then begs the question that if there is nothing inherently wrong with the system, why is there a need for reform? Again, the answer lies not where it should, with the best interests of the consumer at heart, but rather a desire to ensure the income of the domestic property solicitor does not dry up. In other words what can the Law Society do at this late hour to ensure the closed shop that has hitherto existed continues?

So on close analysis the aim of the consultation paper has no grounding in the promotion of consumer benefit; instead it is proposing reform to safeguard the financial interests of its members. I can understand this, but what is missing is the glaring fact that if the aim of change has as part of it a tangible benefit for the consumer, then there is perhaps, far more likelihood that the change will in time benefit and provide security for solicitors.

So leaving this to one side for the moment, what is the Law Society proposing? This is important to know as some of the proposals are good and build upon the HIP reforms that do, like them or not, present an excellent building block for further and beneficial reform.

To begin with they say it would be a good idea for all solicitors whether they are based in Norwich or Newcastle to follow the same procedure and use the same forms when handing sale and purchase. At present protocols exist, but the problem is that not all those who deal with property sale and purchase adhere to them, so in short they serve little purpose. This then adds to delay, duplication of information and added cost.

A good idea therefore if they could persuade every property lawyer to use them, but therein lies the problem with the idea as proposed. The Law Society’s proposal is that this should take place within a framework of a ‘special club’ to which lawyers would be invited to subscribe. The problem is that without making sure all lawyers become part of this ‘club’ the same problems caused by lack of consistency in approach and handling will still remain prevalent. It’s no good the solicitor in Norwich following the protocol if the one in Newcastle is not.

One way possible solution in my opinion, apart from of course making a national protocol mandatory, is for indemnity insurers who insure solicitors against the cost of mistakes and oversights to make the use of a national protocol a condition precedent for valid cover. This would be to the benefit of the insurers, as it would without doubt help reduce the scope for error.

The Law Society is also proposing the introduction of a ‘completion ready pack’.

By no means an original idea as most of the main players within the HIP industry are already producing packs of this type with new and innovative technology. The idea is that the solicitor should be engaged at the time the property is placed on the market rather than, as is more usual, when a purchaser is found. Upon engagement at this early stage, the client would be presented with a pack that would contain all of the mandatory parts of the HIP (yes the same HIP the Law Society complained about and opposed), but with the added value of other documents including a draft contract and transfer.

This they announce would help to speed up transactions as well as providing the solicitor with the edge over its competitors. This may explain why the Law Society also makes mention within the same paper the idea of solicitors setting themselves up as estate agents!

To make this even more appealing and effective to the solicitor, the Law Society proposes that it would look at establishing an IT system to help solicitors compile the packs and facilitate more consistent and effective communication.

It’s a real shame that before formulating this paper the Law Society did not take the time to look and consult with the HIP industry. Rather then knocking the efforts of this industry, and perhaps only looking at it as a potential threat, it could have learned a thing or two about the concept of upfront information and the benefits to the consumer as well as the solicitor.

I hope the survey the Law Society conducted before publishing the consultation paper, disclosed the large number of solicitors out there who saw and embraced the HIP as huge opportunity to secure existing clients as well as new ones at a time when the market was beginning to shrink. There is no doubt that the solicitor who offers the HIP and who has actively marketed the HIP, is and remains in a far better position to procure Conveyancing work than the solicitor who constantly rants and raves about the damaging impact the HIP has had on the property market. Those solicitors who have survived the worst of the recession are those who saw and continue to see the benefit of getting hold of the client at the point of marketing, rather than later. It’s a real shame the Law Society was too blinded by political manoeuvring to pick up on this earlier.

It must be said, that in the space of only two years (as opposed to the many 100’s of years and more the Law Society has had at its disposal) the HIP industry has taken a piece of badly implemented legislation and through investment and innovation developed and enhanced the product to the stage of actually delivering an idea which the Law Society has only just woken up too.

There are numerous IT systems on the market that already allow lawyers and the like to deliver the benefits of the HIP with the added value of legal documents that have been shown to speed the time up from offer to exchange.

It’s encouraging to see that the Law Society recognise the importance and benefits of upfront information and of the need to build on the success of the HIP, however its disappointing that a Society that purports to be representative of its members has chosen to adopt a rather belated and insular approach to review.

Rather than proposing what appears to be a rather bizarre fall back option (or a perhaps a sign of desperation) for its members, of solicitors becoming notaries similar to their counterparts in France, what it should be doing instead is getting out on the road to speak high street solicitors, as well as engaging in meaningful discussion with other interested parties. In particular, it needs to speak with those within the HIP industry who are already working with large chains of estate agents and property builders and developers, to see and to understand the innovative work they are undertaking to speed up and improve the buying and selling process. Grant Shapps, the Shadow Housing Minister, who we all know does not like the HIP, is, from first hand reports, a supporter of the ‘ready to exchange pack’ and who would therefore, it would appear, be a supporter of such an initiative.

They also need to tune into the needs and expectations of the consumer. If the consumer begins to see solicitors in a different and more favourable light, as a listener for example, there is less chance in my view of a mass migration to other suppliers of legal services.

Will HIPs be ‘scrapped’?

The Conservative party has made no pretence about its desire to ‘scrap’ HIPs should as is likely it gain power in spring of next year. Is this a credible policy which can be backed with intellectual argument or is it simply an easy way of trying to win the populist vote?

In this article I will look at both sides of the argument and will, despite my vested interest in seeing the HIP retained, try and provide a balanced analysis of the issues.

I start with recording below an e-mail which was recently forwarded to me in response to a letter sent by a DEA to the Conservative Leader’s office:

David Cameron has passed your email onto Grant as the Shadow Housing Minister and he in turn has asked me to get back to you with his thoughts.

Governing means deciding and we've always been very clear about HIPs and voted against them from the outset. It's not therefore that surprising that we will abolish them.I fully appreciate how difficult this is for you and share your anger about the money you and others have spent on training. I believe that this Government has led you up a garden path by introducing a needlessly bureaucratic, expensive and largely pointless piece of legislation and I have every sympathy for someone in your position. However, it does seem to me that the people to blame are the ones currently in power. We have been consistent in our intentions and have warned the market place that HIPs didn't enjoy our support throughout. We will of course look at ways to ease the transition for those who are already trained or training as HIPs inspectors, but we will not be keeping the current system.

This clearly leaves one in doubt where the Party’ policy currently stands. Indeed, it mirrors what was said to me at a meeting I attended earlier in the year with the Party’s Shadow Housing Minister, Grant Shapps. He made it clear HIPs were to go but the EPC would be saved though it would not be required before the property is marketed.

So why do the Conservatives wish to see an end to the HIP?

In short they see the HIP as a:

Damaging barrier to the housing market
Restricting factor on the supply of housing
Duplication of sale costs
Burden to the consumer

On the face of it and without closer analysis do these reasons stack up? Even if they do, the real question which needs to be considered is whether it would still in the best interest of the consumer be wise to ‘scrap’ a system without having an alternative plan for reform?

The introduction of HIPs was shambolic, that there is no doubt. However credit must be given to the Government for making changes to the home selling and buying process, the first changes since 1925!

It’s easy to pick holes and attack. but much harder to come up with ideas on how an antiquated system can be improved for the benefit of the consumer.

So let us look at the conservative arguments.

Is the HIP restricting the supply of property to the housing market?

No.

There is no evidence to support this view. Other more significant factors are more likely to be the cause such as the shortage of mortgage funds and rising unemployment.

Apart from the cost of the EPC which the Conservatives are looking to retain, there is no extra upfront expense to the home seller and purchaser.

The cost of the HIP which is around £300 plus VAT can in any event be deferred using interest free credit with Lloyds Bank and Close Brothers, active lenders in this market.

Furthermore, the Conservatives are proposing an increase in the Stamp Duty threshold which would be a far more effective means of encouraging people to market their property.

I also wonder whether the Conservatives have given any thought on how their policy will affect the market come early next year. If, as expected, the election is held in May or by 3 June at the very latest, a Conservative Party pledge to scrap HIPs would be likely to cause vendors to hold off putting their houses on the market until after the election, during what is normally the busiest period of the year. Recovery in the housing sector is already fragile and this would stifle further recovery to the detriment of the whole economy.

Do HIPs add to the cost of selling?

No.

If HIPs are scrapped the seller will still need to commission the EPC and property searches and the cost of this will be no cheaper than a HIP!

In all probability the price of EPCs and property searches would increase. Indeed, the price of property searches since the introduction of HIPs has come down by around a third.

At present the only extra cost to the selling process is the EPC as all of the other documents in the HIP would be required with or without the HIP!

Is the HIP of benefit to the consumer?

The anti-lobbyists comprise some estate agents and lawyers.

It is in their interests to ensure that reforms to the home selling and buying process are kept to the minimum.

They have all done well out of the boom years under the old regime and see no reason for change.

They have little regard to the consumer’s best interests.

Over the summer, Ipsos MORI conducted a survey of over 2,000 consumers actively involved in the home buying and selling process. The results are due to be published shortly. I can at this time tell you that the headline findings show a positive consumer attitude towards improving the home buying and selling process through the provision of upfront information.

Another way of looking at the arguments is to consider what the consumer would be left with without the HIP. In short we would be left with:

An antiquated home selling and buying system - one which up until the HIP was introduced had not been reformed since 1925!
A return to those days of wasted costs on abortive sales and speculative selling.
Increased property search prices
The loss of the innovative work of HIP suppliers as regards for example ‘ready to exchange’ packs. Ideas designed to speed up the conveyancing process and save further cost.

So what is the alternative?

AHIPP is encouraging the Conservatives not to ‘scrap’ without first providing time for reflection, review and consultation. They are being asked to:

· Consider which parts of the HIP are of benefit to the Consumer and which can be built upon and improved to make the home selling and buying process quicker and more effective.

· Look at ‘ready to exchange’ products– the idea of having all of the draft legal documents made available at the time the property is marketed will clearly help to speed up the selling and buying process and should lead to the cost of the transaction falling further.

· Talk to suppliers about ‘ready to exchange’; many are already leading the way with ready to exchange products to help speed up conveyancing transactions.

· Consider the wide spread economics of dismantling an industry which has now been growing for the past two years – unemployment/loss of VAT revenue.

· Consider the green issues of dismantling a ‘vehicle’ which has introduced and implemented energy assessment at a point in the selling process which is leading to sellers and buyers taking advantage of grants to introduce energy saving measures.

The wider economic ramifications of abolishing HIPs should not be ignored.

The industry has now been up and running for over 2 years and has already become firmly embedded within local and national economies.

The HIP Industry:

Employs around 10,000 either directly or through the provision of the constituent parts

Feeds work to personal search companies, search departments of local authorities, domestic energy assessors, solicitors, IT designers and programmers and printers

The value of the business in 2009 is estimated at £292,000,000. This is based on 900,000 HIPs at an average retail price of £325 before VAT. It is important to recognise that the volume of properties coming to market is at about 60% of the average through the cycle. This means that in an average year the market would be worth approx £490 million with VAT of £80 million.

Generates around £44 million at 15% and £51 million at 17.5% to which VAT will soon return.

Self regulates through the HIP Code and Association of Home Information Pack Providers.

Innovates by producing new systems for automating the home selling and purchase process e.g. ready to exchange pack

The other main theme running through any consideration of the benefit or otherwise of the HIP is the Green issue.

Energy Performance Certificates (EPCs) are an integral part of the pack and are having a positive impact on the behaviour of consumers towards energy efficiency in their homes resulting in tangible carbon emission reductions.

EPCs are vital to the UK meeting its climate change obligations and research demonstrates that consumers are using the recommendations in the EPC to implement energy savings measures. Conservative plans to move EPCs to the end of the home buying and selling process would have a disastrous effect on the progress made to date and would be in breach of European law relating to the energy efficiency of homes. From a practical perspective Mortgage lenders have previously tested providing energy reports with their mortgage valuations but consumers totally ignored them.

Domestic energy consumption and efficiency are key areas which the UK is looking to improve upon in order to meet its climate change targets. Given that over 25% of UK carbon emissions are produced by domestic properties, it is vital that the benefits of the EPC are fully exploited.

The inclusion of EPCs in HIPs is demonstrably delivering the benefits for which they were designed:

Over 95% of properties marketed for sale have an EPC because it forms part of the mandatory HIP. This is the one and only sector where compliance rates are high. In comparison less than 60% of dwellings marketed for let/rent have EPCs - meaning a non-compliance rate of over 40%. This includes the social housing sector, despite the direct role of CLG in funding and regulating the sector. Non-compliance in respect of the requirement to have a Commercial EPC on all non-domestic buildings marketed for sale or rent is running at 82%-92% according to a number of research studies undertaken by a variety of reliable sources.

The EPC is designed to inform consumers about the energy efficiency of a home, so that they may consider it as part of their decision whether or not to make a purchase. Procuring the EPC as part of the HIP means that the energy rating graph can be (and is required to be) shown on the estate agents property particulars providing instant visibility of the energy rating for prospective purchasers.

Recent consumer research shows that 69% of those questioned remember seeing the EPC during the home moving process (The Homemovers Report – June 2009).

The same research shows that 32% read the recommendations contained in the EPC, were interested, and made some of the recommended improvements. A further 9% intend to make some of the recommended improvements in the near future (The Homemovers Report – June 2009)

An independent ‘snapshot survey’ of 22 industry stakeholders, only one of which (AHIPP) has a vested interest in the provision of HIPs, showed that 17 stakeholders (77%) felt that moving the EPC to the end of the process would be a retrograde step. Only one felt that this course of action would be reasonable.

The EPC acts as a means for consumers to realise the market value of energy efficiency, providing buyers with information they feel is important and allowing sellers to increase their asking prices for energy efficient properties.

If moved to the end of the process non-compliance in respect of procuring EPCs will quickly escalate, consumer engagement will markedly reduce and the opportunity to maximise carbon emission reductions will be gone.

It is also important as part of this analysis to consider how HIPs are viewed by other interested parties. It’s essential that the Conservatives consult with stakeholders and other interested parties before making a final decision on the fate of the HIP.

So what is being said and by whom?

At the Land Data Great Housing Market Debate in April 2009 a panel of experts, during discussion and debate on Home Information packs, unanimously agreed that “while packs had been poorly implemented they should not be scrapped but instead adapted and improved”
Kate Barker, former MPC member
David Miles, Chief Economist, Morgan Stanley
Michael Coogan, Director General, CML
Hugh Pym, Chief Economics Correspondent, BBC
Grenville Turner, Group Chief Executive, Countrywide

“Of all the Tories' pre-election promises, the one I find the most bizarre is the obsession with abolishing Home Information Packs. Granted, the property market is on its knees with the lowest number of house sales for decades. But having said that, I have seen not a jot of evidence that HIPs have anything to do with this and I have not heard of a single seller - or buyer - who believes that the packs have been even a marginal factor. In fairness, the Conservatives did say that they would abolish HIPs even before they were made compulsory and the way they were introduced by this government can at best be described as a shambles. However, I have always been, and remain, totally unconvinced by the Opposition's case against them (the LibDems are also anti), especially now that they've been around for over two years now and no one has died yet. Most packs cost under £400 and include a mandatory energy report. This would now have to be carried out anyway whenever a property is sold and would cost at least £150 on its own. So I cannot believe that the packs can possibly be a major factor in the sale of houses, many of which are worth 1,000 times that. Moreover, the main objectors to HIPs from the property world itself have always been the estate agents and the Law Society, while the consumer watchdog Which? has always been in favour. Who would you rather trust?”
Mira Bar-Hillel, Property Correspondent, London Evening Standard

“The current home buying process is one that fails consumers. While efforts have and continue to be made to improve it, while this market failure exists, Which? does not support the abolition of HIPs. Which? still believes the principle of a HIP is a good one. We support consumers being better informed about what is likely to be the biggest purchase of their lives - their home. This applies in particular to first time buyers who need better independent information. But HIPs in practice have been of limited value. The inclusion of the property information questionnaire was welcome but there is still much work to do to improve the home buying and selling process and to raise standards. In short, though HIPs were supposed to speed up house sales, reduce stress and hassle by empowering consumers and save consumers' money, the jury is still out.”
Mark McLaren, Which? Public Affairs and Policy

“EPCs have the potential to be valuable tools in raising awareness of the energy performance of homes and in encouraging change. It is key that ‘first day marketing’ of EPCs remains in place. The EPC label should feature on the front of the particulars of properties for sale and/or rent to enable people to become much more familiar with the energy ratings of homes and therefore, associated running costs. The EPC rating should also be required to feature in all marketing material, including estate agents’ windows, press and internet advertising for sales and lettings.”
Colin Butfield, Head of Campaigns, World Wildlife Fund

We are firmly behind EPCs playing a major role in the home buying process and, therefore, they should be a priority in all vendor pre-purchasing surveys. Indeed, they are essential part of the important process for moving forward the UK’s existing housing stock towards zero-carbon ratings by 2050. To place EPCs at the end of the priority list would be a retrograde step. Andrew Leech, Executive Director, National Home Improvement Council

The Law Society is currently consulting on proposals for a membership scheme that would explore "the development of completion-ready packs (taking HIPs to their logical conclusion)". Law Society, Improving Residential Conveyancing, June 2009

The National Association of Estate Agents do not appear supportive, but I question whether their view is representative of all their members, and furthermore whether their view would change if the first day marketing regulation was once again suspended.

Interestingly, and perhaps a telling factor, the NAEA has chosen not to carry out a survey of its members on this subject. I find it ironic that estate agents are purporting to support abolition when on the admission of a number of their profession it has been the revenue earned on the sale of HIPs which has helped keep businesses afloat.

Not all conservative party members advocate the abolition of HIPs. Some say the HIP should be retained but on a voluntary basis. I can understand why they say this but I wonder how many of them have actually thought this idea through. One of the major benefits of the HIP is the positive impact this is having on the reduction of time it takes to proceed to exchange. If in say a chain of three only one of the vendors had made use of the HIP the transaction would not as a result of this be any quicker as it will only be as fast as the slowest part to the chain.
Making the HP voluntary would also lead to the return of the abortive sale and the loss of the associated costs.

We have looked at what the Conservatives say and have addressed their arguments. I have already touched upon some of the stated benefits of the HIP but I thought it would for the sake of completeness be helpful to summarize the main arguments for retaining the HIP:

Lower Costs: The cost of property related searches have reduced by at least one third since their introduction, thereby making the cost of purchasing a home cheaper.

Greater Efficiency: The time between accepting an offer and moving to exchange of contracts has reduced considerably thereby reducing the risk of gazumping as well as taking some of the stress out of the home buying process. Data released by Connells in October 2008 showed that vendors with HIPs exchanged contracts on their property on average six calendar days faster than those without a Home Information Pack (16,000 vendors who had instructed estate agency branches within the Connells Group after 2nd August 2007, and who subsequently exchanged contracts before 12th October 2008).

Upfront Information: The introduction of the Property Information Questionnaire has also helped by providing useful upfront information about the property to be sold making it easier for the prospective purchaser to make an informed decision on a property before viewing. This has also led to the consumer becoming more engaged in the marketing and sale process of their property. In turn those selling and purchasing property are beginning to take a greater interest in both the pack and its benefits. A survey of 1,000 home sellers undertaken by Simply HIP in May 2009 showed that 96% of sellers completed the questionnaire in less than 30 minutes (52% taking less than 10 minute), 98% found the questionnaire straightforward or very straightforward to complete and 86% believe the information provided in the questionnaire will be useful to buyers.

Established and innovative: Both HIPs and EPCs have led to an improvement in the home moving process; including the development of new products such as ‘exchange ready’ HIPs. Why start all over again when an established, innovative and productive industry already exists? Without exchange ready HIPs Government figures show it takes 82 days from acceptance of offer to exchange but with an exchange ready this is reduced to 52 days. Evidence from some providers shows that on average exchange is taking place within 28 days with exchange ready packs and that there have been instances of exchange occurring within 7 days. Grant Shapps on exchange ready HIPs: “If an exchange-ready pack can be produced because estate agents know its best practice and they've got evidence that it speeds up the process, it's obviously a great idea. Why don't estate agents get together and propose exchange-ready packs?”

Conclusion

So having looked at, and considered the arguments from an intellectual angle, rather than form a political one, where does all of the information and evidence point?

To ‘scrap’ without replacement would send us back into the dark ages and therefore one thing is for certain this should not be viewed as an acceptable option.

Apart from destroying overnight a well established and high value industry what would ‘scrapping’ achieve? Surely such a policy can no longer be viewed as a ‘vote winner’ with the Conservatives so far ahead in the polls? It’s not going to win them any further votes. The only argument that could conceivably be advanced with a degree of credence is that the HIP is stifling the market. There is no evidence however to show that this is so. No economist has come forward to support this view; all we have are estate agents with vested interest saying it is putting sellers off. Surely this in not enough evidence to justify the total scrapping of regulations, which after a shaky start, are beginning to deliver, and delivering well. Ask yourself if you were in control of keeping or retaining HIPs would you base your opinion solely on what some estate agents are saying? You would almost certainly take on board the views of all interested parties, particularly the consumer. The imminent publication of the Mori Poll results will signify the production of the only truly independent survey of the consumer and will without be doubt be a piece of evidence which even the hardest opponent to the HIP would find difficult to ignore.

At the meeting with Grant Shapps he agreed to review his position on the production of evidence to show that the HIP is producing benefits and in particular is helping the consumer. It will be interesting to see what his view will be on considering the results of this poll and also the feedback I know he has and will continue to receive from his fellow MPs following their meetings with DEAs and HIP supporters around the country.

One thing is for certain, until the Conservatives are elected, nobody knows for certain what they will do. To do nothing at this stage and hope for the best is a dangerous and unadvisable policy. Whatever your view may be I would urge you to contact and engage with your local conservative MP or the prospective conservative candidate.