The Conservative Party has in recent weeks made strong representation on the merits of changing the delivery of the Energy Performance Certificate to mirror the Northern Ireland model. In the same set of representations the Conservative Party has sought to justify its obsessive desire to ‘scrap’ the Home Information Pack on the basis of its view that the HIP is limiting the flow of property onto the property market. In this Article I examine the basis of these representations in context of the Northern Ireland experience with the Energy Performance Certificate and how property transactions are fairing in the absence of the Home Information Pack.
Energy Performance Certificates
In a recent communication from Grant Shapps’ Office commenting on the Conservative Party’s latest policy on Energy Performance Certificate, it was stated:
‘Grant recently restated the party’s commitment to retaining Energy Performance Certificates. Under a Conservative government, EPCs would be the only aspect of the Home Information Pack which is retained.
With over a quarter of the country’s carbon emissions deriving from residential housing, Grant and his colleagues are wholeheartedly committed to ensuring a reduction in the environmental impact of our homes and believe that better use of EPCs could help in that regard.
Embroiled as they are in the current HIP regime, EPCs are too often overlooked. Liberating EPCs will mean that a home’s energy efficiency should become a more important aspect of the home buying process.
Under Conservative plans, Energy Performance Certificates would last up to ten years. It is inconsistent that currently an EPC is valid for up to ten years for a rented property, but only three years for a residential sale. We will also allow homes to be advertised and put on the market once an EPC has been commissioned. These rules operate in Northern Ireland and such “first day marketing” provisions were in place in England and Wales before the Government changed the regulations in April 2009; the market has been harmed by Ministers fiddling with the rules yet again’.
The reference to Northern Ireland is interesting and telling as it seems to have been made without any detailed understanding (or indeed research) into the problems Domestic Energy Assessors are facing in obtaining work in a Country where non-compliance in this residential sector is running at level where any environmental benefit is being totally lost.
In a recent survey conducted by the OFT as part of their home buying and selling review there is evidence that suggests non-compliance in Northern Ireland is running at around 45%!
This is a shocking statistic and one that clearly supports the argument advanced by the Pro-HIP lobbyists that without the framework of a HIP or other mandatory information pack there would be a high level of non-compliance in respect of EPCs in England and Wales – in fact about the same level as homes listed for rent.
As recent surveys have demonstrated that approximately 30% of consumers claim to have implemented recommendations in EPCs as part of HIPs, any action that could result in the diminution of their effectiveness would be scandalous in terms of carbon emission reductions.
Property Transactions
The Northern Ireland market, now you mention it Mr Shapps, is also helpful to the likes of the Association of Home Information Pack Providers, and other supporters of the objective behind the Home Information Pack, as if the HIP is as the Conservatives claim is one of the major reasons for the stalling of the housing market, why in a Country where there is no HIP, does the same problem still exist?
At the beginning of 2009 he volume of transactions in Northern Ireland remained low, with just 692 sales during January, February and March. In May 2009 The Housing Executive's Head of Research, Joe Frey wrote: "Difficulties in obtaining mortgage finance continue and, more importantly, rising unemployment and growing economic uncertainty would indicate that first-time buyers will continue to face challenging times’’
The latest University of Ulster Quarterly House Price Index as reported this week showed the average house price in Northern Ireland was £164,017 (€184,339) in the third quarter, a rise on the figure of £158,886 (€178,572) for the second quarter.
The report's authors said: "The recovery in the housing market is still piecemeal’, and commenting on transactions added ‘’... sale transactions, at best, are only a third of the volume expected under normal conditions, suggesting that the market still has some distance to go."
The University research, produced in partnership with Bank of Ireland and the Northern Ireland Housing Executive, is branded as the most authoritative.
Conclusion
The Northern Ireland experience clearly shows that the EPC on its own and without being part of a HIP or some other compulsory delivery of upfront legal documents/information will just not work, and will not just have catastrophic personal consequences for the 13,000 or so Domestic Energy Assessors in this country, but will also be seen as a pathetic attempt by the Conservative Party to address the major problem we face as a country with increasing carbon emissions. Green lobbyists and supporters kindly take note.
Northern Ireland’s property market also tells us what we all know ( well everybody other those within the Conservative Party) that the true reason behind people deciding not to put their property on the market is not the Home Information Pack, but is rather to do with negative equity, the lack of credit, and the fear of unemployment. The anti-HIP lobbyists should stop using the HIP as scapegoat and focus on supporting measures and policies to address these far more serious and fundamental issues.
David Pett
Home information Packs: Energy Performance Certificates: Conservative Party: Grant Shapps: Property: Estate Agents: Domestic Energy Assessors: DEAs: Solicitors
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