Energy Assessors – The time is now to rise and to be heard

Halloween is with us and at a time when the ghost of uncertainty within the political spectrum over the future of the industry within which Home Information Pack providers, estate agents, solicitors, domestic energy assessors and home inspectors operate, has returned to haunt us again, it’s a shame, and I would add, a disgrace, that the 13,000 energy assessors who were encouraged by Government to spend money on training and becoming entrepreneurs, do not appear to have a single and effective voice.

There are of course organisations out there that purport to be fully representative of these professionals, but relying on feedback received from DEAs around the Country, it seems these bodies only represent a very small proportion of the 13,000.

I also question whether these organisations are actually tuned in with the real day to day issues facing the energy assessor. I have not for example seen any evidence of effective lobbying on the Conservatives’ stated policy on home information packs.

The Conservatives have vowed to ‘scrap’ HIPs, but to keep the energy performance certificate. Some energy assessors have taken this as a signal not to panic. They seem to believe that even without the HIP there will still be a need for the EPC and business will continue as normal. Not so.

The Conservatives have yet to give detail of their intention. They have in their Green Paper and Home Buying Review stated that it will be kept but the point of delivery may be pushed back from the point of marketing to exchange of contracts. Apart from this very little else has been said.

So where do the dangers lie? To begin with if the EPC is pushed back there could be major problems with compliance, similar to those seen in the rental and commercial sector. We know that the EPC’s delivery in the HIP has at the very least brought about a high level of compliance. Added to this is the risk of the Conservatives placing responsibility for the delivery of the EPC with the energy retailers. It is already known that British Gas is on a recruitment drive.

The possible recasting of the Energy Performance Directive may offer some comfort here (see my previous article on this: bit.ly/16IHTx) as if the Directive is implemented as proposed and then enacted by Government, it would be very difficult for a new Government to move the delivery point from the front to a later stage.

There needs to be pressure brought on Government however, to make sure that the Directive if implemented, is brought in to law quickly, and for this to happen before the next election.

It must also be remembered that a large number of the 13,000 energy assessors also wear the hat of a home information pack provider. Indeed a number of their businesses rely heavily on income from the sale of HIPs to survive. How many of these businesses will still, I question, be around if the Conservatives go ahead (as they will clearly do) and ‘scrap’ HIPs?

AHIPP is pressing for the introduction of a ready to exchange solution that seems to have support from other areas of the property industry. AHIPP represents pack providers, and although by implication this includes the interests of energy assessors, there still remains in my view a need for the DEAs/HIs to be independently represented. Their interests do not always fit squarely with those of pack providers and as mentioned there are a number of energy assessors who do not facilitate HIPs.

If energy assessors wish to be heard in the discussions that will clearly take place on how the home buying and selling process could be reformed on the back of the ‘ ready to exchange’ process then they clearly need a trade association of their own and for this to be established quickly.

This association to succeed needs to be free of commercial interest based on low subscriptions and must be supported by the majority of the 13,000 assessors out there.

Other areas of concern/interest requiring urgent attention and representation include:

• Relationship with accreditation agencies – membership fees, lodgement fees, IT system constraints. Should the nine accreditation agencies be reduced to say, two?

• Removal in certain cases of the restriction to ‘cross sell’

• Standardised fees for work

• Restrictions on further intake – the sector is already oversubscribed by 5

• Additional roles for energy assessors – what is happening with the ‘home energy advisor’ idea?

• Improvement of compliance within the rental sector

I have in the past made contribution to Forums run by Domestic Energy Assessors and Home Inspectors and is clear from this experience that these topics remain ‘hot’ and attract lively debate from assessors who are passionate about their industry. This energy is clearly needed to channelled and focused on bringing about the establishment of a fully representative trade association and let us hope that this can be established sooner rather than later.

I do invite the views of energy assessors on this subject.

The true cause of the 'Grey Market' ?

I received a Google Alert at the weekend that had picked up on a Twitter written by Grant Shapps. It related to an article in this week’s Sunday Express regarding the flouting by some Estate Agent’s of the Home Information Pack Regulations. Mr Shapps had come across the article and seemed so impressed with it that he decided to circulate its existence through Tweeting a link to his many followers. The fact it made reference to him and of his intent to make HIPs ‘history’ may have been the reason it caught his eye.

For those who missed this ‘non story’ and piece of poorly written journalism, the story was based on a report or statement from the National Association of Estate Agents. It was reported that the Association had received “numerous” complaints from its members that unscrupulous competitors were by-passing HIPs altogether. Peter Bolton King, NAEA chief -executive, said it was “very common” for agents to tell sellers they would sort out the HIP later but “Could we send Mr Smith round tonight?”

It irritates me to read articles of this type as it really serves only to distract the reader from looking at the real story that is even more concerning than one or two agents ‘trying’ it on. Yes, there is still non compliance and although Trading Standard Departments around the Country are beginning to take pro active measures to stamp this put, there is still some way to go before we will be seeing 100% compliance. The TSD in Birmingham during a recent ‘dawn raid’ on estate agents found a small degree of non compliance but this was lower than had been expected. The truth is that most agents do comply and there are a large number of agents who value the benefits of upfront information and also the extra revenue the HIP has generated for their businesses.

Incidentally, I ask where was Mr King when Which? produced its report on the high and extortionate level of commissions some of his agents have earned and continue to earn on the re-sale of HIPs?

I also ask both Mr King and Mr Shapps as to why they are expressing public surprise about non compliance when the messages emanating from both their offices is that HIPs are ‘hated’ and are to be scrapped.

As the law currently stands a HIP is required and both the Conservatives and NAEA should be encouraging professionals and the public to ensure they comply with that law and not to make statements that only create further and unnecessary uncertainty in a very delicate property market.

Surely the real stories here concerns this uncertainty and of how it could very well lead to a stalling of the property market recovery unless Conservatives come out and make the detail of their policy on the home buying and selling process known. I am not the only person who believes this – Rightmove in a news release last week made similar comment.

Will the Energy Performance Certificate prove to be the Conservative Party's achilles' heel?

The role of the EPC within the ongoing uncertainty surrounding the future of the home information pack, could very well in the light of the proposal for the recasting of the energy performance Directive, become far more significant and defining.

The European Commission has made a proposal for a recast energy performance Directive (COM (2008) 7808 (“the Recast Directive”). Article 11(3) of the current draft provides:

‘Member States shall require that, when buildings or parts thereof are offered for sale, the numeric energy performance indicator of the energy performance certificate is stated in all advertisements or sale of the building or parts thereof, and that the energy performance certificate is shown to the prospective

The Recast Directive would if enacted as currently proposed for the first time explicitly require the energy performance indicator to be included in advertisements for sale of a building.

This is different from the current obligation as set out in Regulation 6 of Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 20072 as this only requires the EPC charts to be included in the written sale particulars. Furthermore and perhaps more significantly this obligation only arises where the duty to deliver a HIP arises under s.155 or s.159 of the Housing Act 2004.

The proposed recast widens the obligation and clearly places the requirement for the EPC to be delivered prior to the point of marketing.

It follows that, were the Recast Directive enacted as proposed, it would after the final date for implementation be incompatible with EC law to withdraw the obligation for a HIP if the requirement as contained within Regulation 6 is amended to reflect this widening of the obligation.

It would always be open to a new government to pass independent secondary legislation to ensure compliance though this would still not enable the government to move the requirement for the delivery of the EPC from the beginning of the process ( before marketing ) to a later stage, say before contracts are exchanged. To include the EPC in all advertising material will mean it will need to be delivered before a property is placed on the market.

There is good argument that even without the recast a new government may be falling foul of EPC law if it were to allow Regulation 6 to fall over as a result of a decision to remove the obligation to deliver a HIP. The Directive (Directive 2002/91/EC of the European Parliament and of the Council of 16 December 2002), refers to the delivery of energy data to a ‘prospective buyer’ implying that the delivery should take place prior to marketing rather than at a later stage.

Furthermore, The Government has recognised that to be truly effective, EPCs need to be available at the point where properties are first marketed and at the beginning of the sale process, in order to fulfil what it recognises to be the intention of the Directive that EPCs should be available to enable potential purchasers to compare the energy efficiencies of different properties they are considering buying. Regulation 6 was intended to give effect to this intention, in order effectively to implement the Directive.

Looking at what is happening in some other european countries would also suggest that without Regulation 6 a government would not be complying with the Directive.

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’.

France

As from 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.

Regulation 6 may not therefore as some suggest constitute ‘gold plating’. There is strong argument that is all part and parcel of the delivery of the full requirement of the Directive. To take HIPs away without addressing this could cause a new government some major and early legal embarrassment, particularly if as is likely the proposed recast is enacted before the next election.

This clearly helps to strengthens those who argue that the current benefits of ‘upfront information’ as delivered (in part) by the HIP can and should be used as a building block for further and long overdue reform to the home buying and selling process. Reform that is sought I should add by both the consumer and the property professional.

Slow week for news in the Home Information Pack 'Playgound'

This has been a quiet week on the HIP front. However, there was quiet an amusing article published in Estate Agency Today, an internet based publication. I am not sure what motivated it, but I have my suspicions. The report read that the Labour Party is looking to pull HIPs in November. This was reported on the basis of information received from a ‘reliable’ source. What does that mean? It came from a person rather than an animal? Surely if it was reliable the source should be disclosed?

Even though I am the first to admit that nothing in this industry would surprise me, it does seem to me that some mischief was at play. I am sure it was not coincidence that this was reported at a time when Grant Shapps was reiterating his intention to scrap HIPs. It was also interesting to see Nick Salmon name appear in a series of comments directly under the article. Mr Salmon is a well know opponent of the HIP. In September in response to a valid and well intentioned survey carried out by Connells to show that transaction times had by virtue of the HIP reduced, he wrote words that to me bare no relation to the world I live and work in: “Is there anyone out there (without a vested interest) who can confirm that HIPs are directly responsible for speeding the buying process? In my experience transaction times have been lengthening during 2009”.

I suspect that the momentum of, and support for AHIPP’s campaign to ‘adapt rather than scrap the HIP’ is beginning to have some effect and is causing some worry in the ‘anti HIP’ camp.

Let’s try and be logical. There was no mention of HIPs at the Labour Party Conference. Is it a logical for the Government to ‘scrap’ a policy that was pushed through with vigour and determination and in the face of both legal and political opposition? Moreover why would Labour wish to give the Conservatives the opportunity to gloat!

There are far more important issues such as Afghanistan and public spending – it amazes me at times why the HIP is given so much political priority and attention. It’s not as if people are speaking about the HIP in pubs, restaurants and on the streets. Are they?????

So Estate Agency Today is you are listening please refrain from making any further editorial mistakes of this type as the credibility of your publication will surely be questioned. If you are having a slow news week why not talk about a safer subject such as the weather!

The 'Oliver Letwin' based argument for the evolution of the Home Information Pack

One of the major hurdles to overcome when engaging with the Conservative Party on the need for reform to the home buying and selling process is its obsessive dislike of regulation. It is of no secret that the Conservatives consider there is too much red tape and regulation in this Country. Grant Shapps referred to this in his speech at the recent Party Conference when reiterating the Party’s intention to ‘scrap’ HIPs. He was not alone. David Cameron, in his Party speech also voiced disgust at the rather ludicrous case of the two police officers who got themselves into trouble because they were babysitting each others’ children when they were out at work. There is no doubt the Party’s case on de-regulation is strong – we have far too much red tape and its stifling business.

However this does not mean that all regulation is bad. There are times when it is necessary as indeed is recognised by one of the major contributors to Conservative policy making. Oliver Letwin, Chairman of the Conservative Policy Review, in The Right Kind of Regulation (a speech given to Policy Exchange on January 27 2009) distinguishes between “Type A” and “Type B” regulation, where Type A is “rules based” and Type B is “judgement based”. Type A regulation, which focuses on compliance and form filling, can blind people to the need for Type B, which relies on the judgement of people with trusted integrity. He recognised there was a need for both type of regulation but pointed to a confusion of understanding of the difference as the reason for Labour’s over and in some cases under regulation of society.

In the case of Home Information Packs and the growing argument for the HIP to be used as a basis for long overdue reform to the home selling and buying process, Letwin’s approach to regulation allows proponents to argue that it is the process which presents the problem meaning there is no possibility of a ‘Type B’ solution working.

Home buying is an area where prior to HIPs self-regulation (Type B) had delivered a process that was hindering the market. The process was littered with problems of ‘gazumping’, abortive sales as well as a profession that could not be trusted to follow self imposed protocols. Regulatory intervention has helped to make the process work better for consumers, but must go further, though with the caution of ensuring its application is light by not placing extra obligation/burden on consumers and professionals.

For reform to work for the benefit of the consumer there is no option but to regulate as practice since 1925 has shown the home buying and selling process will not improve if it is left to lawyers, estate agents and other professionals to lead the way. There is too much self interest at stake.

Live from Conservative Party Conference - Manchester 2009

I have had the fortunate experience of attending the Conservative Conference in Manchester.  I am part of a team of professionals who are lobbying the Conservative Party on the need for reform within the home buying and selling process.

I have over the past day or so met with a number of open minded people who agree that although badly implemented the reform brought about by the Home Information Pack Regulations represents a solid basis for further reform to a system that  is recognised by both consumer and professional as being slow and costly.

I listened with interest to Grant Shapps speech.  Leaving to one side the predictable rallying political sound bite of 'HIPs are going', the speech was constructive and full of 'progressive' policy content.  If this is anything to go by I remain hopeful that notwithstanding the firm intent of removing the HIP, Mr Shapps will use the opportunity to bring immediate reform through the requirement of upfront documents and information on a property which will clearly speed up and improve the home buying and selling process.

Having documents and information at the beginning of the process rather than at the end places no additional obligation on the seller/buyer and in fact brings the cost of home buying and selling down. The would not need to be in place before marketing, they would need to be introduced within 28 days. This would also provide the Conservatives with the vehicle that they will require in the absence of the HIP to keep in line with the European Law requirement of an upfront energy assessment.

The HIP may be history but let us hope that the Conservative Party does not allow this opportunity for badly needed reform to pass.  The momentum and mandation behind the HIP must be kept as without it reform will not happen.

David - Manchester 13.51

AHIPP release video to support case to retain the HIP

You Tube is the place to go to watch this very compelling video on  the benefits of  the Home Information Pack.

The case for retaining and evolving the HIP

Introduction

It is widely accepted that Home Information Pack Regulations were poorly drawn and not implemented in a clean and proper fashion. It is also conceded by many within the property industry that that the main objectives behind the legislation of saving millions of pounds of abortive transaction costs as well as speeding up the home selling and buying process may not have yet been fully fulfilled.

It is not therefore surprising that there are many property professionals out there who hold certain views on the benefit or otherwise of the HIP. Some argue for instance that the HIP represents an unnecessary and costly lay of bureaucracy. Indeed this is the view of the Conservative Party that has and continues to call for the scrapping of the HIP. AHIPP and other property industry stakeholders however argue that the legislation has brought about long overdue changes to an antiquated home selling and buying process ( that was last overhauled in 1925), as well as paving the way for further improvement.

AHIPP and the HIP Industry

AHIPP represents the views of the HIP industry that in the main comprise property professionals, such as solicitors, personal search agents, estate agents and those working in the field of energy. Its members also include large financial institutions, such as Aviva PLC, Lloyds Bank and Close Brothers.

There are around 10,000 people working within the industry and since its inception in 2007 it has accumulated a value of between 300 and 500 million pounds. Its members make major contributions to both local and national economies in terms of employing people, mainly young people in the field of customer support and information technology, and financial. It is estimated that the industry generates each year around 44 million pounds of VAT, which in the event of VAT increasing to 17.5%, would rise to 51 million pounds.

The industry is not only an employer and contributor to the public purse, but is also an innovator. In its brief but eventful life it has responded to legislative deficiencies through investing large amounts of money into developing and implementing information technology systems to automate and improve the home selling and buying process. For example see Appendix A – an article on the innovation of one HIP provider working in conjunction with one of the Country’s largest Builders and Developer, Countryside PLC.

Like any responsible industry those working within it have and continue to listen to what the consumer is saying and to monitor and assess as an ongoing process the practical impact of the legislation. For example, when it appeared some sellers were finding it difficult to find the money to pay for the HIP upfront, the industry responded through offering through Lloyds Bank and Close Brothers low cost credit options allowing the seller to defer the cost of the HIP until such time as the property sells.

AHIPP has recently, wishing to make sure it remains in touch with the consumer’s needs and requirements, commissioned an IPSOS MORI poll. This surveyed over 2000 people involved in the home selling and buying process. Despite what has become a common perception that the HIP has no benefits, the results of this survey showed quite conclusively that the HIP is beginning to have a positive impact on the home selling and buying process.

The HIP Industry’s Vision

The message from the Industry is clear and consistent – the scrapping of HIPs will serve no purpose at all other than to throw the home selling and buying process back into the dark ages as well as removing a golden opportunity for a progressive Conservative Party to introduce further reform for the benefit of the public at large.

As the IPSOS MORI Poll has shown, the HIP has many benefits that present a solid and sound basis for the Conservative Party to build and produce reforms of its own in the full knowledge that is has behind it a well established industry with good infrastructure and networks.

The Conservative Party has already identified the way forward for reform. It has acknowledged the benefit a ‘ready to exchange pack’ (REP) could bring to the home selling and buying process. This is of no surprise to the industry as many within the industry have already evolved the HIP into a REP and have over the past year or so produced around 4,000 of this type of pack.

The industry supports and advocates the idea of taking the beneficial parts of the HIP and adding to these data and documents that turns the HIP into a REP.

What is a ‘ready to exchange pack’?

This takes some of the mandatory documents from the HIP, the Energy Performance Certificate, the property searches, the documents which prove title and places these with other documents/information that would otherwise be produced after the seller has found a buyer, and they could include:

• Contract for sale

• Seller Property Information Form

• Leasehold Property Information Form (where relevant)

• Fixtures & Fittings Form

• Additional legal documents referred to in the Register or (if unregistered) a full Epitome of Title

• Environmental search

• Copies of planning permissions and building regulations consents supplied by the Seller

• Guarantees supplied by the Seller

The REP would be ordered ( and paid for or an undertaking to pay ) before marketing and apart from the EPC which would need to be included in the pack before the marketing commenced all other documents would need to be added within 28 days of the first day of marketing. The EPC would need to be obtained before marketing to comply with the forthcoming requirements of the EPDG re-casting.

The Benefits of the REP to the Consumer

To understand the benefit of the REP one needs to look at and understand the process of selling and buying.

The steps in the process from start to the exchange of contracts when the parties become legal obliged to complete the transaction are, at present:

1. Obtain HIP

2. Market property

3. Find purchaser

4. Offer made by Buyer and Seller accepts

5. Instruct solicitor to act on sale and purchase, if the seller is buying another property.

6. The Seller’s Solicitor, having taken his clients instructions, prepares a draft contract and sends this with all of the other papers relating to the property (contents, fixtures & fittings, etc) to the buyers solicitor, including the HIP

7. The Buyer’s Solicitor will make use of the property searches and title documents within the HIP but will normally commission an environmental search. They will also raise enquiries with the Seller's Solicitors on the title of the property and may ask for other title documents to be produced.

8. When the result of these enquires is returned then the Buyer's Solicitor will advise the Buyer accordingly.

9. The Buyer's Solicitor will make appropriate amendments to the draft Contract submitted by the Seller's Solicitor with the pre-contract papers, taken in account the result of the enquires.

10. Exchange of Contracts- this is when a legally binding contract is made.

As can be seen much of the collecting of the data/information takes place after the offer by the Buyer is accepted. Even though the HIP has helped to speed up the process (by at least 5 working days) by placing some of this information and data into the hands of the Buyer’s hands at the point the offer is accepted, it does not at present go the complete way as the Buyer’s solicitor still has to order an environmental search, still have to wait for information to be provided by the Seller’s solicitors, as well as requesting additional title documents.

The advantage of the REP over the HIP is that all the documents the Buyer needs to advise his client and sanction the exchange of contracts are made available by the Seller shortly after marketing and before an offer is made and accepted.

Therefore the process with a REP is reduced in time as follows:

1. Order REP. EPC is received within REP and property is marketed.

2. REP completed and handed to selling agent to pass to purchaser once buyer is found

3. Offer made by Buyer and Seller accepts. Seller Instructs solicitor to act on sale and on purchase, if the seller is buying another property.

4. Buyer’s Solicitor receives REP. Considers papers and documents within it, advises buyer, approves contract and indicates readiness to Seller solicitor to proceed to exchange. Contracts are then exchanged.

So in short the benefits are:

• Drastically shortening the time from acceptance of offer to exchange.

• Streamlining the buying and selling process.

• Providing certainty to both buyer and seller that once the offer is accepted the transaction is more likely to go through than not.

• Less likelihood of ‘gazumping’

• Less likelihood of experiencing the trauma, stress and cost of an aborted transaction.

• Greater scope for solicitors to focus on what they do best – checking documents and carrying out due diligence on the title without having to worry about the administrative tasks of ordering and gathering data/documents.

What is needed to bring about the benefits of reform of this type?

The main and most important requirement is the preservation of the principle upon which the HIP concept is based – the importance of mandatory upfront information.

The Conservative Party has maintained that the imposition of a mandatory requirement as a pre-condition to marketing is not consistent with their wish to reduce and eliminate unnecessary bureaucracy.

However with the re-casting of the energy Directive which governs the EPC, there is likely to be no option to the Conservative Party, but for the EPC to be produced before a property is marketed. If the EPC has to be produced upfront, the requirement to produce other documents/information within 28 days of marketing and that would need to be generated as part of the process in any event, must surely be of no consequence to the Seller or the Buyer.

The only added cost is the cost of the EPC which would be needed in any event under any regime.

This will of course transfer some of the cost from the Buyer to the Seller but 90% of buyers are also selling a home at the same time, thereby neutralizing the impact.

More importantly for first-time buyers, there is a welcome cost saving as they are able to get on to the property ladder without having to pay for the pack.

Would this work if it was made voluntary?

No - this would simply not work and cannot be regarded as a viable option. If one of the parties in a chain of transactions made use of the REP and another did not, then the benefit of speed and cost saving would be lost as the transaction can only proceed as quickly as the slowest participant.

One only needs to look at the Law Society’s efforts to introduce a national protocol for solicitors to follow when acting for a sellers and buyers. It has failed to achieve any improvement in reducing time as it’s based on a voluntary uptake.

Support for the need for further reform

There is widespread support for using the HIP as a building block for further reform of the home selling and buying process both within and outside the property industry.

In the section on Market Driven Solutions:

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

In the Section on How is an ERP different to a HIP:

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

In the section on Energy Performance Certificates:

If EPCs became a requirement at the end of the sale process, rather than being a legal requirement as the house is placed on the market, it would be an unhelpful step. Consumers need to have a better understanding/knowledge/awareness of EPCs so they need to be right at the front of the sales process.

Richard Capie, Director of Policy, Chartered Institute of Housing

*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

Halifax Estate Agents firmly support reforms to the home-moving process which will reduce costs, improve transaction speed and give greater certainty to customers.

Joel Ripley, Director

Having the legal paperwork and searches available upfront can speed up the due diligence process. Whilst HIPs have not achieved all their objectives, we urge an incoming Government in 2010 not to throw the baby out with the bathwater, but to undertake a detailed review on which aspects are working and which are not, before making a decision”

Roger Wilson, Conveyancing Services Director, Connells

Whilst the current HIP system is far from perfect, the provision of upfront information through the HIP is of great use.

Melfyn Williams, Managing Director, Williams and Goodwin Estate Agents, Past President National Association of Estate Agents 2003/2004

Conclusion

The HIP industry calls upon the Conservative Party to pause, to reflect and to seize upon a golden opportunity to take credit for turning a poor piece of Labour devised legislation into a platform for further and more constructive reform of the home buying and selling process. The Party has already identified the benefits a REP would bring and to convert the HIP into a REP would not only prove to be a simple exercise given the existing infrastructure but would also more importantly be widely accepted by the electorate.

The adoption of this policy would also be consistent with decision of the Conservative Party to review all existing policies in light of the impact of recessionary factors. It would prevent the level of unemployment increasing by 10,000 (comprising of a large number of young employees), it would preserve the VAT revenue (£80 million) at a time when public funds are at the forefront of minds, as well as helping first time buyers get onto the property ladder when combined with the Party’s stated intention of raising the threshold of Stamp Duty.

Appendix A

Joint Press Release from Countryside Properties PLC and Hipshomes Limited on the introduction of a new system for the production of ‘ready to exchange’ Home Information Packs.

Countryside Properties PLC, one of the largest private property developers in the UK, has teamed up with the Norwich based Property IT Company, Hip2go, to produce a system for the ‘in house’ production of home information packs with the added benefit of ‘ready to exchange’ status. Built specifically for the requirements of new build homes industry, this is believed to be the first system of its kind.

Designed to facilitate the electronic compiling and production of legal documents used in the sale of new properties, the ‘LIP’ (Legal Information Pack) is helping Countryside Properties to automate the legal process involved when selling a new home thereby making it easier and quicker for a buyer to move in.

Angela Dowding, Group Chief Solicitor, at Countryside Properties explains:

“Each time we release a new development, there is a need for my team to collate and produce a vast number of documents which will be used in the establishment of the conveyancing process. These documents include, draft contracts, draft deeds of transfer, property searches and other vital information. The new compiling system helps my team in sorting, arranging and conveying these documents as well as enabling buyers and buyer’s solicitors to access the information electronically through a secure viewing platform. It eliminates the need to dispatch by post large bundles of paper, and more importantly helps to speed up the time it takes to progress the sale and purchase from the moment the offer is accepted.”

*The practice of collating and making legal documents available up front at the point of marketing is becoming more popular according to David Pett, Managing Director of Hip2go. He explains: “An increasing number of solicitors, estate agents and HIP providers are now making ‘ready to exchange’ solutions available to their clients. This advanced HIP includes the additional information that is required by the buyer’s conveyancer during the buying process. Its benefits to the buying process are significant in terms of speeding up the time it takes to exchange contracts which in turn helps both the buyer and seller in reducing cost and stress.”

The advance of the exchange ready pack is also receiving interest from the Conservative Party with the Shadow Housing Minister, Grant Shapps, recently commenting that this is something which they would look at.

Consumers give a thumbs up to HIPS

At long last we have good and reliable evidence available to support the growing view of many that the HIP is beginning to deliver. More importantly the evidence is truly independent. No spin, no vested interest, and strictly consumer based. The consumer’s voice is of much importance given the current debate on whether the HIP should be retained by the Conservatives.

The evidence comes in the form of an IPSOS MORI poll and the results are very telling:

• Six out of seven of those surveyed (85%) say that the need to obtain a HIP did not influence their decision about whether or not to sell their home. The 15% that said it influenced their decision whether or not to sell put their home on the market anyway. This is pretty convincing evidence that Hips do not affect listings.

• 60% said the information provided by the seller in the Property Information Questionnaire (PIQ) is useful to buyers, with nearly three quarters (73%) saying it took less than 20 minutes to complete and 75% finding it easy to complete.

• A majority (57%) agree that home buyers should be provided with more upfront information about the condition of the property that they are buying.

• Only a minority (30%) disagreed that providing home buyers with more information about a property before making an offer would improve the buying and selling process.

• Around four out of five (82%) agree that the process of buying and selling properties takes too long. Connells have already shown from a very representative survey that HIPS reduce transaction times by up to 12 days.

These figures show without doubt that HIPs have had and continue to have a positive impact on the home buying and selling process. Grant Shapps, the Shadow Housing Minister, called for evidence and now this is available hopefully he and his Party will immediately review and amend its current policy to ‘scrap’ HIPs

The Conservative Party prides itself as a listening Party. Let us hope it will now listen to the voice of the consumer.

David