Latest Conservative's Statement of Intent on Home Information Packs and EPCs

Thank you to one of our colleagues for forwarding the latest statement of intent from the Conservative Party on Home Information Packs and EPCs.

As has been case throughout, the information imparted is full of political rhetoric but devoid of much substance.

The note opens with the familiar party political line on HIPS:

‘Conservatives opposed the introduction of Home Information Packs and have maintained a view that HIPs are an unnecessary level of bureaucracy which are failing to make the home buying and selling process easier’.

The question should be asked of where is the evidence on which it can be claimed that the HIP is not making the ‘home buying and selling process easier’? All the evidence I have seen shows the contrary. The principle of upfront information, the same principle of upfront information on which Grant Shapps formulated his Home Buying Review (http://bit.ly/2e6MZn). Surely we must be asking the Conservative Party that despite the evidence to the contrary (some of which comes from the consumers themselves), how do they propose to make the process easier. So easy to knock and criticise, but far more difficult to come up with concrete proposals for reform. Where is the back bone to the Conservative Party’s policy on housing reform?

Mr Shapps’ office then moves on to the old chestnut of the HIP, yes the £199 bundle of legal documents that every seller and buyer required and had to pay for as part of the century old conveyancing system before the HIP was ever conceived, let along introduced, claiming it is acting as a barrier that is preventing speculative sellers from placing their property on the market. He says:

‘Speculative sellers are being put off from putting their homes on the market and those that did go so far as to order a HIP were charged more than £320 million last year with no guarantee that their property would sell’.

This strikes me as a sign of desperation as we now for the first time have a figure attached to the statement. So Mr Shapps how much of that £320 million pounds has actually been lost? Not much I guess. Furthermore, how much of that sum represents a cost saving on the conveyancing charges on the properties sold. As I say above apart from the £40 for the EPC, all of the documents paid for by a seller are documents that the seller would require in any event to proceed with a sale. The Ipso Mori Poll commissioned in the summer showed that 85% of those home sellers surveyed did not see the HIP as a barrier and the 15% who did, still nonetheless paid for a HIP and placed their properties on the market.

This is a highly misleading statement and one that masks the true economic factors that are restricting the flow of property. I am talking here of the fear of unemployment and the lack of credit. Perhaps Mr Shapps would be better off addressing these more fundamental issues rather than picking on what can only be seen as an easy target.

Another question for Mr Shapps is how much money has the consumer saved since the HIP was introduced in terms of conveyancing fees. Does he realise that the HIP has brought the cost of searches down by one third that has had the effect of reducing quite substantially the cost of selling and buying. By withdrawing the HIP consumers will be required to pay more. A massive ‘own goal’ as I see it.

Mr Shapps then says in a slightly contradictory way that if they are good as we all say then HIPs could continue but as a voluntary pack:

‘Grant’s fully aware of the need to be honest with people whose livelihoods are affected by our decision to scrap HIPs and for that reason I must inform you that a ‘repackaging’ or renaming of HIPs will not be considered. However if, as you say, HIPs are desired by consumers, a voluntary pack could succeed on a market-driven basis’.

So Mr Shapps you are taking away the HIP and despite indications given to the industry of your support for a ready to exchange solution you are now saying that this is also a ‘no goer’ Not sure this can be regarded as ‘honest’. We should all be asking Mr Shapps why he would wish for the Country to return to the pre-HIP system, a system that was last changed back in 1925, when he knows that the system is flawed – it takes too long, it’s too expensive and as recognised in his Home Buyer’s Review it is very stressful. He prides himself, as does his Party, on being a progressive party – not sure how a backward step of this type fits that label.

As for voluntary continuation, he knows full well that will not work. It has not worked with the Law Society’s National Conveyancing Protocol and it will not work with HIPs. To put this in as an option is an insult to the intelligence of professional people.

The response then moves onto EPCs.

His Office says:

‘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’.

Well at the very least we seem to have some definitive thinking on how the EPC will operate, thinking that seems to be driven by the recasting of the Energy Directive. So the EPC will need to be ordered before the property is marketed. Interestingly Mr Shapps, in one breath talks about bureaucracy and how this should not be allowed to be a barrier to marketing, and in the next breath, he says a seller will have to order and pay for an EPC before placing a property on the market. So what you are really saying that bureaucracy is oaky when there is an environmental issue involved (and yes it would be bad policy to upset the Green Lobby), but when it comes to adding legal documents that would with or without the HIP be required, it is a different story. As I say this is not about what is best for the consumer, it is about politics and allowing policy formation to be led by the likes of some estate agents who have a vested interest in keeping the existing and antiquated self serving system in place.

Increasing the length of the EPC for domestic to 10 years will clearly have an adverse impact on availability of work and though he says: ‘As part of the Party’s comprehensive energy policy, we have pledged a ‘Green Plan’ scheme to retrofit energy efficiency measures in homes. Domestic Energy Assessors will have an important role in helping deliver these policies’, can we trust a man who’s views on the role of the EPC has changed so much in recent times?

We all need to contact Mr Shapps at collinsti@parliament.uk and ask the questions:

1. Why dismantle an industry and unnecessarily put people out of jobs when it would not take too much for a party that should be supporting businesses to return HIPs to the pre-April transitional rules, allowing a property to placed on the market (in the same way as he is proposing with the EPC) providing the HIP is ordered, and to leave the HIP in place until such times as he and his Party have come up with, and implemented proposals for reform to the home buying and selling process. Tell him that this would address his concern about speculative sellers. Remind him also of David Cameron’s speech at the Party Conference (http://bit.ly/2hrOd8) when he said entrepreneurs would be required to help mend broken Britain.

2. Ask him to see the results of his Home Buyer’s Review that have never been released – point out that if he wishes to be honest and transparent then this should not present a problem.

3. Ask him to produce and publish figures on how much money the HIP has raised for the Public Purse and how will this hole is to be filled when he withdraws the HIP?

4. Ask him to produce and publish figures on the impact of the HIP on the costs of property searches and conveyancing fees.

5. Ask him about how the DEA industry will survive between the withdrawal of the HIP and the introduction of any measures that will provide them with work? This could take years to introduce. Surely by leaving the HIP in place until such time as other revenue streams can be put in place this would be a helpful solution.

David Pett