Grant Shapps has a habit of only giving the public half the story. His Party – the Conservatives profess to act in the interests of the consumer and believe that by removing the requirement for a home information pack this will help the consumer to market their home without more quickly and bring about other benefits.
The question is would this actually help the consumer or is it more designed to assist the estate agent who is complaining that the HIP is holding the property market back. I try hard to think of where the consumer will benefit from the removal of the HIP. I agree it will mean that the seller does not have to pay the £200 HIP fee before they place their property on the market, but is there a real saving here or is just a case of changing the stage at which payment is made.
Before the HIP was introduced most consumers once they had marketed their home and received an offer would upon engaging a solicitor be asked to pay an upfront fee to cover what are known as ‘disbursements’. These include, for instance, the cost of property searches. It was not uncommon for the seller to be asked for up to £200 as a down payment. Unlike the post HIP regime, there were no schemes available to defer this upfront cost until completion, meaning the seller was required to find this money and make payment before any work could be undertaken. As this was often a struggle for some no work was undertaken for some time and this led to delay within the chain of transactions. It should also be noted that if the transaction failed this upfront payment would not be refunded.
The other problem that also led to delay and consequential stress was the time it took some solicitors to gather information and documents from the seller that are put into what are known as Solicitor Information Forms. Sellers are like the majority of us busy people and often struggle to find time to respond to letters and calls from the solicitor. One advantage of the HIP is that all of this time consuming and administrative work is undertaken by the HIP supplier, leaving the solicitor to do what he or she does best - that is to advise on the legal aspects.
The consumer before taking a view on the benefits or otherwise of the HIP needs to know that the cost of the HIP represents no additional expense to the selling and buying process other than the cost of the energy performance certificate of around £40. In other words the seller and buyer are paying no more to move than they did before the HIP arrived.
In fact the cost of moving since the HIP was introduced has come down meaning that if the Conservatives are elected and the HIP goes we will all be paying more to move home as well as experiencing more delay and stress. From information I have obtained from one national search provider it seems that under a Conservative Government a consumer could be looking at paying £100 to £150 more to move home.
According to Alan Thorogood, Chief Executive of STL Group plc, the average cost of the property searches that we all need to move home has come down by 42% since the introduction of home information packs. These figures have been obtained by analyzing audits undertaken by the industry trade bodies COPSO and AHIPP and in discussion with a number of local authorities.
He explains the reason for this:
“The c 40% price reduction since HIPs is largely due to lower fees charged by personal search companies due to a smaller amount of specialist HIP providers commanding high market share. Lately, competition due to lower transaction volumes and the effect of the April 2009 Charging Regulations have played a significant factor re pricing. The Charging Regulations introduced the concept of ‘cost recovery’ of local authority data. This has reduced the cost of many council searches and, whilst the cost of local authority data for personal searches has actually increased, personal search prices have not increased significantly due to increased competition pressures’.
So to recap under Conservative Government the Consumer will, following the abolition of the home information pack, and in the absence of synchronised reform, face the following:
Increased cost of around £100 to £150 on legal work associated with moving home
· Delay caused by difficulty in finding the upfront expense solicitors require to progress the transaction, as well as the delay associated with obtaining information and documents from some sellers.
In addition to this the consumer will also as a result of the delay face once again the risk of having to meet the wasted cost associated with the collapse of a transaction as result of, for example, ‘gazumping’.
I also question whether it is in the best interests of the consumer to let back into the market mainly for the benefit of the estate agent those speculative sellers. Not only does it increase the risk of the honest and genuine seller having to pick up the expense of a time waster, but it also fuels price increases and leads to the very problem that has got the property market into the fix it currently faces.
So Mr Shapps when will you and your Party come clean and make the public know the downside of your anti-HIP policy? If you don’t then it will be down to those 10,000 or so people involved in the HIP industry to spread the word and to encourage people to take this into account when casting their vote at the next election.
No comments:
Post a Comment