Grant Shapps Decision to 'consult' is a Sham

HipConsultant.co.uk has today run a blog entry to record a reply from Grant Shapps’ Office to a series of questions.

Like most replies from politicians the response ( as detailed below) does not fully address the issues raised, and in fact, as is usual when dealing with Shapps, raises more questions than it purports to answer.

In fact there is nothing new in the response. We have been aware for some time of the ‘back tracking’ with the 100 day consultation period, we know he does not intend to replace the HIP with anything similar, and as regard the EPC apart from repeating it will be retained there is very little in the response to provide comfort to energy assessors.

The reply reads:

‘We do not plan to replace HIPs with anything else. If we win the next election, we will scrap HIPs as soon as possible after a consultation period - we expect to be around 100 days. We are very keen to see industry/market driven solutions to any problems in the home-buying process but do not believe that the Government should impose more red tape and expensive bureaucracy on consumers, particularly during the longest and deepest recession on record. Though the compulsory element of HIPs will be removed they will remain voluntary and it is up to the industry to create a product that consumers value and want.

Grant fully appreciates how difficult this is for inspectors and shares their anger about the money they and others have spent on training. We believe that this Government has led you up a garden path by introducing a needlessly bureaucratic, expensive and largely pointless piece of legislation and we 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 have set out separate policies on our support for EPCs and our expectation that they will become more widespread, an important tool in combating climate change, which will help those who are trained as DEAs.’

Interestingly the language used remains contradictory in that there is mention of the word ‘scrap’ whereas later it records: ‘Though the compulsory element of HIPs will be removed they will remain voluntary and it is up to the industry to create a product that consumer’s value and want’. So Mr Shapps you are now saying the HIP is not going, it will still be available but on a voluntary basis! If so please drop the word ‘scrap’.

We all know (or should know) as indeed Shapps does, that voluntary delivery of the HIP will simply not work. There needs to be an element of compulsion otherwise the benefits it delivers will be lost. We only need to look at the Law Society’s National Transaction Protocol to see that it will fail if left to voluntary take up. Shapps should be reminded of what he said in his Home-Buying Review where he recorded on the subject of the HIP: ‘Labour’s attempt to improve the home buying process through HIPs has been an unmitigated failure but what lessons can we learn? If solicitors were required to confirm that they were a) instructed b) had the necessary documentation to hand and c) were ready to send out a contract at short notice, prior to placing a property on the market, would this not go a long way to solving the problems of delay?’

More significantly how on earth does a ‘Conservative Government’ hope to carry out objective consultation when they have already condemned the HIP and all those associated with it! Surely the correct and more advisable message must be ‘we need to have a re-think on the HIP front and for this reason we are carrying out consultation’. As the situation currently stands (and it appears to me to be irreversible) Shapps is simply intending to use consultation as a means to a predetermined end. Does this not make a mockery out of the whole process?

I also question the objective of the consultation. Is this a process that will help decide whether the ‘power to suspend’ should be invoked, or is it part and parcel of planned primary legislation? If the former, I very much doubt the so called ‘power to suspend’ can as I had said countless times before, be used for the stated purpose of ‘scrapping’.

Christmas is a time when we should all be honest with each other. It’s a pity that this does not, it seems, extend to Shapps and his Party. For the sake of making sure we do not see a major stalling of our property market recovery we should all be calling upon him to come forward with a New Year resolution of postponing any plans to do with the HIP until he (or as is more likely his successor) has had a chance of carrying out a wider and more comprehensive review of the home buying and selling process.

The Home Information Pack Suffers Due to Lack of Education

It is so easy for the anti-HIP lobbyists to argue that the HIP should go simply because nobody so it is claimed wants it! The problem with this statement however is that although it has an element of truth it really does not, as with most ‘spin’, truly reflect the view of the consumer. Perhaps a truer and fairer pronouncement would be – ‘The HIP should go as nobody really understands its purpose and benefits’.

The problem that exists and which is not helping the proponents of the home information pack is that there is a total lack of education surrounding not only the objective of this pack of legal documents, but the home selling and buying process.

For so long now a home seller and buyer have had little involvement in the process other than furnishing information and signing papers when requested and making payment to the Conveyancer once the transaction is at an end. This is partly down to some Conveyancers not taking the time to explain the process ( the ‘smoke and mirrors’ approach), as well as the home seller and buyer having little interest in the legal process other than wanting to move into their new home as quickly as possible. This is hardly surprising. The legal process is not the most exciting of processes and at the end of the day this is the very reason a Conveyancer is employed in the first place.

So when a consumer is asked about the Home Information Pack, probably a consumer who has yet to be involved in the selling process, why is so much made of the fact they respond in a negative way. The majority of which probably have no knowledge of the HIP other than what they have read in the Daily Mail or Daily Telegraph. Their view is therefore influenced by the ant-HIP propaganda that as we know is often misleading in the extreme.

So why is there such a lack of education? One reason is that the HIP was launched in such as shambolic way that it hardly had the best of starts and public perception of its worth has failed ever since to recover. However the true reason is the lack of time given by the seller or the facilitator to explain the purpose of the HIP and to outline the benefits. Some estate agents see the HIP as means to an end rather than as a product that if sold correctly can be used as a basis of securing loyal and long term custom.

My experience which is widely reflected within industry is that when time is taken to explain to the seller why a HIP is required, and what will be achieved by it, that the initial scepticism fades and support for the product emerges. Most sellers for example do not know that the majority of documents within the HIP are documents that they would need and have to pay for even if the HIP was abolished. Nor do they know that by front loading the legal side of the sale the time it takes to proceed to exchange is shortened. The addition of the Property Information Questionnaire to the HIP has also made sellers become more involved in the process and has helped them understand a lot more about selling and buying.

The same applies to the criticism surrounding the energy performance certificate. Some argue that nobody looks at the EPC and are not interested in the recommendations etc. I received an email recently from an energy assessor who undertakes work for the USA military bases. He wrote:

‘I operate in the Thetford/ Mildenhall area where we have lots of military housing, the most ridiculous thing is the US personnel know more about the EPC than UK consumers because the military have seen fit to brief new entrants and take the time to explain what the EPC does and how it will affect the individual.’

Grant Shapps is therefore disingenuous when he refers to a lack of interest in the HIP. In making such a comment he is ignoring the fact there was to begin with (well before the HIP was introduced) little consumer interest in the legal process of home selling and buying, and moreover the fact in making the statement he is not taking into account the widespread lack of education as regard the purpose and objective of the HIP.

Rather than continuing to provide the electorate with only half of the story he and his Party should be looking a ways of making the whole process more transparent, quicker and less expensive. Bring on the compulsory ‘ready to exchange’ pack!

Cracks Appear in Grant Shapps HIP Policy

After yesterday’s report in the Daily Telegraph announcing that the Conservative Party intends to replace the Home Information Pack with a ‘more robust ready’ pack of documents, we today hear via the Estate Agency Today publication that this is not correct.

The article reports that Grant Shapps office has stated the Tories have no intention of replacing the HIP with anything ‘compulsory’ and that in so far as seeing another pack introduced this would not happen unless industry takes the lead and its ‘voluntary’.

This must once again question whether Shapps and his office know what they are doing. Its difficult to imagine that the Telegraph article would have led with such a definite statement had the information not come from a reliable source.

Does this suggest that there may be some disagreement on HIPs within the Conservative Party. There is much talk that this is more of a personal crusade on Shapps part and that all within his Party do not share this obsession.

Grant Shapps : Cheap Red Ribbon Publicity Stunt

Grant Shapps is at it again! Taking the Home Information Pack, mocking its purpose and in the process gaining some cheap and totally unnecessary publicity. This time we have Shapps engaging in some early Christmas wrapping! Taking some red ribbon he decided it would be good fun to wrap this around a house in Hendon in an effort to symbolise ‘red tape’ and ‘bureaucracy’

In a ceremony more akin to the opening of new Library, Shapps is reported to have cut the ribbon and once again treated the press (those who were actually interested) to a repeat of his groaning about how he and his Party will make sure the HIP is scrapped if he is fortunate enough to be elected into a Government post.

Not content with this he also had available a number of ‘friendly’ supporters who primed with propaganda told the world (well the world of Hendon) that the HIP was costing an ‘arm and a leg’ and that it was an unnecessary expense.

The report quotes Locksmith David Wright, 55, whose house in Meadow Drive was wrapped in ribbon for the event, said HIPs did not tell them anything a survey wouldn't have.

He and his wife Helen, 40, are selling the house and moving to Bedfordshire, but they said the scheme had been a waste of £300 for them and the people he was buying from.

Hang on Mr Wright, are you saying the HIP contains nothing a survey on the property would not have told you? Surely Shapps would have enlightened you that the HIP does not contain any structural report and in fact is a bundle of legal documents together with the energy performance certificate that you would have needed and paid for in any event.

Bet Shapps also omitted to tell you that the cost of moving home under a conservative government will cost you more. The HIP has kept the price of home selling and buying down but, hey, be prepared to pay up to 40% more when the HIP goes!

The article also says the HIP has slowed the selling process down and an agent is quoted to say it takes longer to get a house on the market. As with most of this propaganda this is nonsense! The HIP has quickened the process and the honest agents out there will tell you that from point of order to marketing the process does not normally take more than 48 hours.

It is a shame that Shapps, one of our more intelligent and forward thinking MPs, has had to resort to a cheap and misleading publicity stunt to get a message that everyone in the industry knows! Someone this morning complained that I write like a tabloid journalist and needed to be more professional! Perhaps this criticism was mis-directed? The full article can be found at : http://bit.ly/63PT1o

Daily Telegraph report Home Information Packs will be replaced!

The Daily Telegraph http://bit.ly/6cTGT3 carried an interesting story on Home Information Packs this morning in which is suggested the Conservative Party was looking to replace the HIP with an Exchange Ready Pack. Though it is fair to say the article contains no quotes from Grant Shapps or his office, the appearance of such an article in a national newspaper with no input from the Association of Home Information Packs, should in my view be viewed as significant.

The article by Caroline McGee written on the second anniversary of the full roll out of the HIP opens as follows:

‘Is our relationship with the (Hip) almost over before it has really begun? Shadow housing minister Grant Shapps has vowed to abolish the compulsory seller’s pack within weeks of coming to power, and replace it with a more robust 'ready pack’ that will include a draft contract and other legal documents’.

Better still the article actually includes a quote from an estate agent who appears to be given his full support to the idea:

“If your solicitor is away and the junior is on a sabbatical, then the litmus test is that the office cleaner can send out a complete package of documents within an hour,” says Trevor Abrahamsohn of estate agents Glentree in Hampstead, where multi-million houses are staple fare and thoroughness is important. “This will speed up the conveyancing process and minimize gazumping during the vulnerable period between agreement and exchange. It will rejuvenate the market.”

Encouragingly this is the first time I have seen a national paper write an article advocating quite independently of any pressure group the benefits of an ‘exchange ready offering’. As to whether we will now begin to see Grant Shapps publically lending his support to this credible proposition only time will tell.

For further information on Exchange Ready Packs see my article: http://bit.ly/33c61e

SPLINTA resigned to long wait for the abolition of the home Information pack?

The debate about how long it will take a Conservative Party to abolish the Home Information Pack continues today with yet another article appearing in the Estate Agency Today online publication in which we have AHIPP and SLINTA making comment.

Regrettably there is not much new to report on within the article, though it is perhaps worth commenting that even the anti-HIP lobbyists seem to be resigned to the fact that to attempt to use secondary legislation to dismantle the HIP would be risky and that primary legislation is the best way forward. This is interesting as I have always held and expressed the view that exercising or attempting to exercise the power to suspend section 162 of the Housing Act would not be a wise legal choice.

Commenting on this Salmon the spokesman for SLINTA says:

“It is sensible to scrap HIPs via secondary legislation.

“If it was only suspended, then like some hideous beast from a horror movie, HIPs could come back ‘revived from the grave’ by a future government. Safer to kill it stone dead.”

He reference to ‘secondary legislation’ is wrong as the only secondary legislation available is section 162 and therefore it is clear that this statement amounts to an admission on his part that passing primary legislation that could take up to 18 months is the only way forward.

This must be good news for supporters of the HIP as if primary legislation is required why not take the opportunity to use the HIP to bring about badly needed reform to the home buying and selling process.

Energy Assessors would benefit from a 'ready to exchange' pack offering

The idea of developing the Home Information Pack into a more comprehensive pack of legal documents has over the past month or so picked up pace. We saw the Association of Home Information Pack Providers invest heavily in a stand at the Conservative Party Conference where there was engagement with Party members on the premise that the HIP lends itself well to the evolution of the pack into a ‘ready to exchange’ offering. We have also seen recently the launch of an organisation known as BOLD (bundle of legal documents) that is primarily directed at the legal profession and which advocates the delivery of upfront legal documents and information but without the property searches.

There is no doubt that the idea of adding more to the HIP and making this available upfront has a great deal of appeal mainly due to the indisputable fact it will speed up the time it takes to proceed from offer to exchange as well as making sure we do not return to the dark ages where millions and millions of pounds were lost in countless aborted sale transactions.

In this article I look at who would be the winners and losers if as is proposed the HIP evolves or is replaced by some form of ‘ready to exchange’ offering.

There idea would clearly benefit the legal profession who would be best placed to offer the ‘ready to exchange’ pack either separately or as part of a conveyancing package. Given the HIP is nothing more than a bundle of legal documents plus an energy performance certificate it is surprising that not more legal firms have embraced the HIP and used this as an effective marketing tool to preserve and expand conveyancing practices. This leads me to question that even if a ‘ready to exchange’ pack emerged there would be as many lawyers entering the arena as one might otherwise expect. Lawyers are slow to react to opportunities hence the reason many high street firms are likely to close over the next couple of years particularly when the Legal Services Act comes into full force giving non-legal entities such as supermarkets the option to offer legal services.

I also believe that the energy assessor is in a strong position to benefit. Not only would such an offering also include the energy performance certificate but it would also require quite a large amount of administrative work undertaken upfront. The ‘ready to exchange’ idea could perhaps require a seller to order a ready to exchange pack before marketing and place an obligation on the seller to deliver this pack within 28 days. This would therefore mean that quite a substantial amount of ‘data’ collecting would be required at an early stage in terms of helping the seller complete the fixture and fitting form and the Property Information form. The energy assessor in visiting the home to carry out the inspection would be in an ideal position to offer this service as well as helping the pack compiler to obtain from the vendor documents such as guarantees and planning permissions.

I recently read an article written by conveyancing solicitors in which it was stated that the main reason for delay was not necessarily the property searches but rather the time to it took the seller to complete forms and produce documents. The engagement of the energy assessors to fulfil this role would clearly ensure that the benefit of speed would not be lost.

This would also free up the lawyers time and allow the lawyer to focus on what it does best and that is to advise on the legal issues rather than spend time running around collecting data and documents.

The energy advisors role as an agent of the lawyer could also include the physical checking of land boundaries as this is often a major reason for delay and abortive transactions. This again would help to reduce time and ultimately the cost of the whole process.

Other beneficiaries of this idea are estate agents, in terms of being able to offer property as ‘ready to exchange’ and gain quicker access to their commission, as well as the consumer. In fact the consumer would be the ultimate beneficiary. By getting the majority of the legal work undertaken upfront issues that could turn into ‘deal breakers’ can be easily identified and remedied, and with providing full transparency the stress and length of the whole selling and buying process can be reduced substantially.

Upfront delivery of information and documents would also benefit the first time buyer as there would be very little if any cost to meet.

So this leaves me with the question of who will be the losers if this were to happen. Well despite giving this a great deal of thought I find it difficult to see who would actually lose from this as it seems to be a ‘win, win’ situation for all. So much so one really has to ask the question why would Grant Shapps and the Conservative Party not wish to adopt and run with what is quite clearly a workable solution to the problems that currently exist within the home selling and buying process.

Is Grant Shapps back tracking on Home Information Packs?

When will Grant Shapps learn that to be a Minister in waiting one must begin to at least give the impression that he has some knowledge and understanding of the subject matter on which he purports to formulate his Party’ policy?

First we have him make some twisted (and factually incorrect) joke about Mr Brown not having to worry about a Home Information Pack when he leaves No 10, suggesting he would abolish the HIP within the first few days of taking office, and now it is reported that he has had a re-think and perhaps it would be safer for him to engage in some consultation before going ahead to ‘suspend’, and then pass legislation to abolish the HIP. Does this man have any idea of the consequences his ever changing message has on both his credibility and more importantly, the fragile state of the housing market?

In today’s Estate Agency Today it is reported:

‘Tory shadow housing minister Grant Shapps has now explained why it might take 100 days for HIPs to be abolished – because it would actually be the shortest route. However, the 100-day period would have to include a consultation.

The Conservatives have repeatedly said they will abolish HIPs, with Shapps maintaining that he would do it immediately or “within days”.

However, at the Home Sale Network conference last week, Shapps mentioned for the first time the 100-day time lag.

Last night, a spokesman in his office told Estate Agent Today: “I think our process will be a consultation, followed by a Statutory Instrument to suspend HIPs, and then legislation to abolish them.”

This latest message is confusing at best, and wholly misleading at worse. Though reference is made to a ‘statutory instrument’, he is, it seems to me, still referring to what some mistakenly label as an ‘emergency power’ within the Housing Act.

In fact this is Section 162 that was introduced back in 2004 to enable Government to temporarily suspend the HIP regulations for a set period if, according to the debate as recorded in Hansard, problems occurred during the HIPs trial period.

Some argue (wrongly) that this ‘power’ can be used as a mechanism to bring immediate relief to the housing market if Government takes the view this is needed.

I consider the section was not designed or introduced for this purpose and in any event the explanatory notes to the Housing Act clearly state suspension should only be used in exceptional circumstances. Given the housing market was in a far worse position back in 2009, and that all the current indicators show it is making a recovery, a Government may find it difficult to argue that there now needs to be a ‘suspension’, let alone speculating that this will be the case in Mat 2010!

Furthermore there would be no need for Government to suspend as it would be within the scope of the regulations to go back to the arrangement whereby a property could be marketed if a HIP is ordered. Interestingly similar to the arrangement proposed by Shapps for the delivery of the EPC. By allowing property to be marketed in this way it would have the same desired impact as a suspension and could be implemented that much sooner given no consultation would be necessary.

One must also question whether making use of this section for “suspension’’ when everyone including the dog knows that what Shapps is actually using it for is to ‘’scrap’’ ( as he seems to get some perverted delight in reminding us all of this every time he speaks in public) is a proper and legitimate application of the power.

The time is now for Shapps to clarify his intentions by making it clear that he will and can only abolish the HIP ( if indeed it remains his wish ) by passing primary legislation. By making this clear he will probably save face, prevent potential damage to his career, as well as helping Industry to ensure the recovery within the housing market remains firmly on track.

Conservative Party Latest on Energy Performance Certifciates

The uncertainty surrounding what the Conservative Party intend to do with the energy performance certificate has become a little clearer today in a reply from Grant Shapps’ Office to a letter sent by a worried energy assessor. However as can be seen there remain a number of unanswered questions.

 Questioned about the Conservative’s plans for the energy performance certificate Shapps’ Office states:

‘Where Grant talked about EPCs, there would be no changes to the role of DEAs in carrying out assessments for EPCs. By strengthening EPCs in this way, Grant expects there to be more work for DEAs.

With regards to the role of EPCs in the home buying and selling process, Conservatives have no plans to remove the requirement for an EPC. Whilst scrapping HIPs, Conservatives would restore the EPC regime to pre-April 2009 requirements. That is to say that a property could be marketed for sale provided that an EPC had been commissioned by the seller’.

So we now know under a Conservative Government we will see sellers being required (yes regulation from a party whose case for ‘scrapping’ the HIP is that it involves unnecessary bureaucracy) to commission an energy performance certificate before marketing begins. So as Shapps says we go back to how the arrangement was before the 6th April.

Fantastic you may say if you are an energy assessor, but as always with this Party there is never any detail. When will Shapps ‘get it’? The EPC without the home information pack will simply not work either from the consumer’s point of view or the environmental perspective. In the rental and commercial markets where there exists a similar arrangement for delivery, there is evidence of wide spread non compliance.

In the commercial arena for instance a survey carried out by Quidos shows that Landlord compliance with the 1-year-old Energy Performance Certificate legislation for commercial property (currently for sale or let) was still very low, with only 22% of commercial property appearing to carry a valid energy certificate.

Speaking after the publication of that report, Quidos Operations Director Nick Branch spoke in favour of moves to improve awareness of energy efficiency; "These certificates provide a valuable asset rating of the energy performance of buildings. This data can and is being used by forward thinking landlords to improve the energy efficiency, and value of their property portfolio. With low cost loans available from the Carbon Trust, these energy saving improvements can be capital neutral in the short term and revenue generating in the longer term."

By ‘liberating’ the EPC from the HIP, as Shapps puts it, he says the true benefits of the EPC will be allowed to emerge. Sorry, but this is simply rubbish! The EPC to be effective and to serve a true mechanism to bring down the level of carbon emissions it needs to remain in the HIP or a similar equivalent. The Northern Ireland experience proves this beyond doubt. In Northern Ireland where there is no HIP and where the seller is required to order an EPC one out of every two properties are marketed without the energy performance certificate.

Shapps and his Party say they are taking the ‘green’ issues seriously. If this is so why do they not acknowledge the role the HIP has played in delivering to the consumer the benefits of the data contained within the EPC. One must seriously question the Conservatives’ ‘green credentials particularly in a week where the Carbon Trust has stated the UK has no chance of hitting its target of reducing 80pc of carbon dioxide emissions by 2050 unless the commercial property sector embarks on a massive drive to improve the energy efficiency of buildings.

This coincides with the recent publication of a report from the National Energy Saving Trust that discloses that with more than one million homes changing hands in a typical year, there is the potential to reduce our annual CO2 emissions by some 1.36 million tonnes and reduce energy costs by £200 million in a single year.

If Shapps could find it within himself to step down from his personal crusade to ‘kill’ the HIP (and all those associated with it ) and begin to look objectively at the merits of retaining a vehicle like the HIP ( that has proved its worth) for the delivery of the EPC, then perhaps those who care about the environment may start to take him and his Party more seriously.

Budget Summary

Link to Budget Summary : http://bit.ly/5Mtnir

Conservative Party's Attempts to Attack the Home Information Pack Backfire

In a lively Commons’ debate that took place yesterday it was refreshing to see the Government respond to the recent Grant Shapps led anti-home information pack campaign. It was even more refreshing to see the Conservative spokesman struggle to support to sustain credibility.

The debate began with Mr. Andrew Robathan, a Conservative, asking the question:

‘What assessment he has made of the effect of home information packs on the housing market since their introduction?’

The Parliamentary Under-Secretary of State for Communities and Local Government, Mr. Ian Austin, responded by saying:

‘We are currently working up proposals to evaluate the effectiveness of the HIPs programme, and we expect the results to be available in 2010. However, early independent research undertaken by Europe Economics and published in November 2007 concluded that the introduction of HIPs would not have a negative impact on the housing market.’

Not happy with this Robathan then resorted to Party line language by inquiring:

‘Those constituents who raised the matter with me tell me that they find HIPs to be untimely, expensive, and bureaucratic and, really, a waste of time. They quite like the energy performance certificates, so will the Government realise the error of their ways, realise what a waste of time-time, effort and money-the process has been, and scrap it?’

It’s questionable whether his constituents were consulted and if they were whether anybody within his Party took the time out to explain the purpose of the HIP and the benefits they present. Fortunately Mr Austin took the opportunity to inform Robathan of this as well as belittling his intelligence in the process!

Mr Austin adopting his usual direct approach responded by saying:

‘The hon. Gentleman does not need to ask ludicrous questions like that to confirm to the House that he is not exactly the sharpest tool in the box. However, thousands of jobs and hundreds of small businesses depend on the HIP process. Some 13,000 people have invested thousands in training as energy assessors, so the Opposition need to explain why they would put all those jobs and all those businesses at risk, and the hon. Gentleman needs to explain to all the people in his constituency whose livelihoods depend on that process why he wants to put them out of work’.

He added:

‘The Leader of the Opposition swans off to the Arctic to hang around with huskies, but the hon. Gentleman and the Opposition are showing today why nobody will take seriously anything they say about climate change. As a result of HIPs, 2 million home owners now have an energy assessment and energy recommendations that can help them to cut their fuel bills by up to £300 and reduce carbon emissions. Is it not extraordinary that even today, as the world gathers in Copenhagen, the Opposition are still committed to abolishing the HIP, which is one of the main ways of helping home owners to cut carbon emissions and tackle climate change?’

How refreshing to see the Government stand up for an industry that has worked hard to implement well intentioned policy that despite a rocky start is beginning to deliver real benefits to the consumer as well as making a major and important contribution towards carbon reduction. Grant Shapps should pause, take note and decide whether obsessively pursuing the HIP is really worth the risk of his policy backfiring and causing damage to his career aspirations.

NES Report Questions Grant Shapps 'Green' credentials

Love them or hate them there is no doubt that the Home Information Pack has, and continues to deliver an efficient mechanism for the delivery of the energy performance certificate.

In contrast to Northern Ireland where there is no HIP and one out of every two properties is marketed without an EPC, the majority of those selling and buying in this Country are all beginning to reap the benefits of having to hand upfront information on the energy efficiency performance of their homes.

Despite Grant Shapps best efforts as well as those who support his madness, there is no escaping the fact that the HIP has helped and continues to help consumers, as well as making a major contribution towards reducing carbon emissions.

And now we have the proof to question Mr Shapps’ ‘green’ credentials in the form of a report on the impact of the EPC as prodcued by the National Energy Saving Trust.

The headlines of the Report show:

• Implementing the recommendations in the EPC to bring homes up to their potential rating, would on average reduce each home’s CO2 emissions by 1.2 tonnes and cut its fuel bills by £182 a year.

• With more than one million homes changing hands in a typical year, there is the potential to reduce our annual CO2 emissions by some 1.36 million tonnes and reduce energy costs by £200 million in a single year.

• At least two thirds of the homebuyers the researchers spoke to (68%) had made some form of alteration to their new home in the last year – 39% of them making significant alterations and 29% opting just for cosmetic changes.

The full report can be found at http://bit.ly/4ERoKx and will clearly help strengthen the campaign to retain the HIP and to ensure it continues to be the primary delivery vehicle for the one of the most effective tools we have to hand to help reduce carbon emissions.

Action Group for HIP Reform Launched

The Shadow Housing Minister, Grant Shapps, repeated statements to abolish the Home Information Pack has left the HIP industry’s future in doubt. It has also planted a time bomb that could ignite early in the New Year bringing with it misery for estate agents, other property professionals and the home seller and buyer.

If the Conservative Party should gain power at the next general election, Mr Shapps has made it increasingly clear that his first task will be to scrap the current HIP. With the HIP’s future uncertain and Mr Shapps refusing to commit to what will replace it, many vendors will at the beginning of next year facing a dilemma as to of whether to sell or wait until after the election before going to market. It does not take an economist to predict what the likely affect this will have on what is already a very fragile market.

Not only a concern for the consumer, this should also set off alarm bells with estate agents and other property professionals as what will this mean for those looking to formulate and agree business plans for the first 2 quarters of next year.

Added to this is the personal tragedy this will bring to the 30,000 plus working within the HIP industry. At a time when unemployment is high the overnight closure of a major industry must be a concern for any Government.

This does not only concern HIP providers. Home Inspectors and DEA’s who are so crucial to the current HIP, and in helping to reduce carbon emissions, could also find themselves surplus to requirement. These are people who have invested personally and financially in finding a role within an industry that the Government itself encouraged.

In recognition of this strength of feeling, and wishing to see reform brought in on the back of the HIP, a new group of likeminded people has been formed under the title of the ‘HIP Reform Group’. The aim of this group is to ensure the consumer is given a full and not a partial picture of the benefits of the HIP, as well as advocating reform to what is recognised by many as an antiquated home selling and buying process. Those wishing to lend their support can sign up at www.hipreformgroup.com

For further information regarding this article, please contact Georgina Randell on 01603 275103 or email georgina.randell@hipreformgroup.com

Labour blast Grant Shapps’ £6,50O Green Refit Loan as a ‘Con’

The subject of the Conservative Party’s flagship ‘green’ policy that will offer the consumer loans up to £6,500 to refit their homes with energy saving measures received reference today in the second reading of the Energy Bill.

Greg Clarke, the Conservative Party’s Shadow Secretary of State for Energy and Climate Change, could not resist the temptation of repeating details of the scheme that Mr Shapps, the Shadow Housing Minister, had unveiled a couple of weeks’ ago. He said:

‘We will allow every household in the country up to £6,500 in approved energy efficiency insulations, and the system will be conditional on money being saved on their bills during the payback time. That is a win-win situation’.

Responding, Edward Miliband, the Secretary of State for Energy and Climate Change, stated the difference between me and the hon. Gentleman is that I recognise that this proposal will have a cost: we are providing £4 million to make those pilots possible. This comes back to image versus substance. He wants to claim that he can give £6,500 to every household in the country, costing up to £180 billion, and that it will cost no public money. That is clearly a con’

Dr. Alan Whitehead, for labour added: ‘we have heard the suggestion -it was repeated this afternoon-that every household should be given £6,500, and that that will sort out the whole question of insulation and active energy generation concerns. As a result, it is suggested, we will have fully insulated and approaching zero-carbon households, but it is akin to the other short-lived policy we heard about a while ago, whereby everybody was to put £8,000 into the pot and they would then have their health and social care needs taken care of for the rest of their lives. That policy ran into similar mathematical difficulties. The mathematics of the £6,500 policy-over and above requiring loan guarantees of some £160 billion to £170 billion to be injected into the economy if the guarantee is from the public purse-would require savings of £360 a year, if the loan is to be serviced and assuming that it would not be just given out to householders’.

It is clear, or should be, that the Conservative Party’s policy for ‘green’ reform should not be accepted at face value. As with policies of this type the devil is within the detail.

Foxton's Case points to the need for reform on the back of the HIP

It was reported last week that a court has ordered estate agent Foxtons Ltd to pay more than £4,000 in fines and costs for failing to give accurate information about a property for sale. As an advocate of reform to the home buying and selling process based on principle of mandatory delivery of upfront information I found this case of interest.

In the case Magistrates heard that a would-be buyer had been interested in buying a home in Hackney Foxtons, but the estate agent chose not tell the buyer that the £450,000 property was designated not as residential, but as "work/live" - to be used as part-business, part-residential.

This was only discovered later after the buyer instructed a solicitor and incurred £600 of legal fees. The buyer was then faced with either a £20,000 bill for planning covenants to convert the property to solely residential use or pulling out and losing both time and costs.

The buyer chose to withdraw and a complaint was made to Trading Standards in Hackney, who referred the case to Islington Council. The agent was subsequently

issued with a fine of £3667, and ordered to pay £680 costs and a £15 victim surcharge.

The buyer here was lucky.

Many others are not and before home information packs were introduced many sellers and buyers lost thousands and thousands of pounds in abortive transactions.  This is one fact that Grant Shapps conveniently seems to forget when speaking to the press and the public.

If in this case the property had been advertised by Foxtons as residential, then according to the law a HIP should have been produced and presented to the buyer. It’s not clear whether this happened or not, though if a HIP was available then planning issues may have been uncovered through the personal searches that are contained within the HIP.

The case also highlights the benefit of taking and using the HIP as a basis for improving the home and buying and selling process by requiring the seller to deliver legal information over and above those legal documents already within the HIP, such as for example planning documents. See my earlier article on ‘ready to exchange’ packs.

Had this requirement been in place a case of this type would never have occurred. Perhaps this explains the number of estate agents urging Grant Shapps to follow through with his intention to abolish the HIP.

As always with politics the consumer seems to be low down on the list of priorities and much lower than the estate agent on the Grant Shapps’ list!

Watch out for cheap Christmas imitations!

There has been an abundance of early and ‘unbelievable’ Christmas offers on Home Information Packs and components and services aimed at the energy assessor. 

Though it is difficult to make specific comment on the credibility or otherwise of these offers, I can offer some general comments and tips that may help with making an informed decision:

·     The ‘national’ cost of a HIP compliant ‘search package’ does not vary too much from one search supplier to another.  As the cost is therefore pretty standard, any ‘package’ where the cost of the HIP minus the EPC is under £125 one should begin to question whether ‘short cuts’ are being made to increase the profit margin, and whether if as is likely the supplier is only making a small profit from the transaction, will that supplier be able to secure a lasting future in a very competitive market. Your customers will not be too impressed having switched supplier only to find a few months down the road that their HIPs are caught up in a bankruptcy or insolvency situation.

·     Just because the provider has what appears to be all the right ‘badges’ such for example the HIP Code, do not rely on this solely, still do all the checks. Does the provider, for instance, hold liability insurance, and if so, what does this cover? If you are buying in components and adding your EPC, and then selling on, what happens if the searches are not compliant and someone who relies on the search sues? Are you covered?

·     It is tempting to consider ‘jumping ship’, especially if money can be saved. However one needs to consider not only the above, but also question of services levels and turnaround times.  Due diligence of the supplier offering these ‘fantastic deals’ should always be carried out.  Always seek a reference or two from existing customers

·     The disbursement price on all HIP searches will be increasing by £11 in January 2010.  Any offer kicking around now probably excludes this increase and therefore may be limited in time. You should check and ask this question.

·     Unbelievable offers of this type are also usually linked to conditions asking for instance, payment ‘up front’, or are conditional on making use of associated services, such as conveyancing.  Always ask to see the terms and conditions and make sure there is no hidden print.

·     The political uncertainty has prompted some people to jump in to the arena and to try and make a fast buck thinking if the HIP industry goes under next year there will be no one around to complain about compliance shortcomings etc.  Beware not to fall in their grasp.  It is a slippery slope!

As with most things if it is cheap there is some reason for it being cheap – in life you get what you pay for! 

Grant Shapps vows to 'scrap' Home Information Packs within 100 days

In the same week as he was struggling to recall the name of one of his fellow conference speakers, Grant Shapps is in the news again today claiming in an article within the web based Estate Agents Today that he has now set a very precise timetable for the ‘scrapping’ of Home Information Packs. 

Out goes the same day revocation and in comes a three months timetable commitment to see the end of the HIP within a very precise period of 100 days.

His obsession with the pack comprising legal documents and carbon reducing energy performance certificates is unremitting and is now coming across as a very personal crusade.

 As mentioned before I fail as a lawyer to see how he can deliver this commitment, given no statutory power is available to him, or rather Caroline Spellman, to bring the HIP to an end. Primary legislation would be required that would take much longer, probably 18 months or longer.

He knows this, we know this, and therefore we must question his motive for spinning these unfounded statements. I have a theory.  Is this all part and parcel of a master plan designed for the purpose of bringing to a standstill in spring of next year the ongoing recovery of the property market?

By saying the HIP is going, and tirelessly repeating this at every opportunity, along with the pledge of reducing the stamp duty threshold, is the Conservative Party deliberately engineering a situation that could if not stopped derail the property market as well as the Government’s wider game plan to get us out of recession. What right thinking person is going to market their home or purchase a home in the early part of next year, when they are being encouraged by Mr. Shapps to wait ( and pray)  in the hope that if the Conservative Party if elected in either March or May moving home will , according to him, be cheaper.  

I am not usually a believer in conspiracy theories, but it does make you wonder when it must be going through their minds that if the economy continues to pick up, options to attack the Government and improve their chances at the Poll will clearly begin to diminish.

As always the net effect of this political game is uncertainty for businesses, loss of jobs and the possibility of us finding ourselves deeper in recession that we were this time last year.  

'Toe Curling' Grant Shapps

I saw this in Building Connect and it made me smile:

'Gary Sharpps, MP

If shadow housing minister Grant Shapps was trying to make an impression on the green building sector, he could have done better than getting the name of its most powerful operator wrong. Throughout his address to Building’s Making Sustainable Development Happen conference, he referred to UK Green Building Council chief executive, Paul King (with whom he has shared a platform several times) as “John”; cue the sound of

500 sets of toes curling within sandals throughout the hall.
nd despite the moderator, shadow energy minister Greg Clark, clearly addressing King by his real first name later on in the event, Shapps didn’t learn from his error: seeing King’s PR guy, John Alker, backstage, he asked him: “Where’s the other John?”'


Is there any hope for us, I ask?

Grant Shapps - The HIP Spin Doctor

The latest ‘spin’ emerging from the Shapps’ propaganda machine sees the Daily Telegraph carrying in this morning’s paper news that ‘Home information packs have cost sellers more than half a billion pounds since their introduction two years ago – and raised nearly £100 million for the Government’.

Passing to the Daily Telegraph information gained through raising Parliamentary questions, Grant Shapps, the shadow housing minister, said: "By imposing a £657.6 million burden on the housing market during the longest and deepest recession in living memory, Labour's short-sighted bureaucratic policy is milking the industry dry. They should have listened to the consumers, the industry and the Conservative Party and scrapped this discredited scheme before it even began. HIPs will be history under a future Conservative Government, with only the useful energy performance certificate surviving."

As usual with stories of this type, Mr Shapps ‘spinning’ for political gain has omitted to present the full story with the consequence the unsuspecting public is left with a distorted and highly misleading picture of Home Information Packs. But hey what is new there!

The story fails to mention:

• That this cost represents no extra burden. If the HIP is removed the ‘burden’ would still remain, as apart from the cost of the energy performance certificate (that Mr Shapps says he will keep) all of the other components in a HIP are components that a seller and buyer would have to pay for in any event.

• In fact if he removes the HIP the so called ‘burden’ will increase as the cost of personal searches that have, since the introduction of the HIP come down, are likely to increase by around 40%. So the Consumer will be paying more.

• If the HIP the HIP is removed the consumer will be returned to the days of a 28% failure rate with property transactions costing consumers £1 million each day along with the stress and misery this causes.

• The energy performance certificate without the HIP will fail to help to reduce carbon emissions as it can be proved that where the EPC operates independently of the HIP the level of non compliance runs at around 40%.

The HIP remains an easy target for Mr Shapps. In his eyes using the HIP for political spin presents him with almost guaranteed national press coverage. I believe the public is becoming tired of hearing about this and are more interested in hearing more from Mr Shapps and his Party on far more important issues such as Afghanistan, Europe, and the economy as the health service. As I have said many times, is does not take too much intellectual skills to knock and mock, the true measure of a good politician is in the formation and delivery of good and substantive policies for progressive reform.

Five reasons why estate agents should support the retention of the Home Information Pack

The National Association of Estate Agents has gone out its way to put down the Home Information Pack, and indeed within recent weeks has called for the suspension of the HIP regulations (http://bit.ly/7YNQvF). I find it difficult to see the logic behind this strategy, particularly as the high street estate agent should in my view be looking at the HIP not as the enemy, but rather as an asset that can, if used properly, bring about many benefits.

So here are my Top 5 reasons for the estate agent to embrace rather than reject the HIP:

 

1. First and foremost, the HIP is one of the only vehicles out there that can be used to capture the seller at a stage when they may not have had any contact with other property professionals. The HIP should be looked at as an effective sales tool to bring in more clients and to then once secured, and with the help of associated professionals such as IFAs and solicitors, be used as a basis to earn referral commission. If the HIP is taken away, many sellers may revert back to contacting IFAs before beginning the process of marketing.

 

2. The importance of capturing the seller at the beginning of the selling process, and as such being a head of the queue, should not be underestimated, and for this reason the cost of the HIP should be viewed as part and parcel of the agent’s annual marketing budget. Most HIP suppliers can supply the HIP at short over base cost and rather as some agents do, mark this up with a higher retail price, my suggestion would be to offer the HIP FREE of charge. This can then be absorbed as part and parcel of the marketing budget for that property. This will not only attract more sellers, it will also encourage loyalty. This is of particular importance at a time when Grant Shapps and the Conservatives claim (disingenuously) that the cost of the HIP is stalling the property market.

3. The HIP presents a golden opportunity for the agent to pause and engage fully with the seller. I do not understand why more agents do not use the Property Information Questionnaire as a means of selling and highlighting the positive features of a property. For instance if it’s been re-wired or had a new roof, why not push these features and attach to the PIQ the documents evidencing the cost of the repairs/improvements. Some may look at this as a burdensome exercise but I know some agents do invest the time to make sure as much information and documentation is provided within, and with this form so as to make sure the time between offer and exchange of contracts is shortened.

4. The principle of delivery of upfront information on which the HIP is based should only be viewed by the agent as helpful. How many times has an agent and indeed a buyer only found out about a defect in title or about an adverse boundary after the property has been removed from the market and a solicitor is engaged. Surely the seller, the buyer and the agent would all benefit if any potential problem of this sort could be identified at the time marketing rather than later. The seller benefits as early detection of problems presents the opportunity to find early solutions so as to ensure the property is marketed in the full knowledge of the problem but with the solution attached. This then avoids the loss of time and cost associated with abortive transactions. The buyer is also kept happy and more likely to stick to the transaction and arrange a mortgage without having to deal with unforeseen queries. The buyer will also avoid having to waste the time and expense that is associated with late withdrawal from a transaction. Finally, the agent benefits through having a happy seller and the prospect of repeat and recommended business, as well as getting his hands onto his commission that much quicker.

5. The proposed evolution of the HIP into a ‘ready exchange pack’ (http://bit.ly/33c61e) brings to the agent all of the above benefits as well as creating the opportunity of a sales edge on competitors. What better way is there to market a property in the shop window as both ‘exchange and mortgage ready’! If I was a buyer and there were two properties almost identical other than the fact one was ‘ready to exchange’ it would be a no brainer which one I would choose.

So come on agents, the time has come to get behind the HIP and register with the NAEA your displeasure about how the Association is trying to remove from you one of the best, if not the only sales tool that has come your way during the last decade.

Estate agents ill-considered call for home information pack suspension

The National Association of Estate Agents, the trade association of estate agents, has issued a call this week for the suspension of Home Information Packs. Nothing new here, as the Association has always viewed the HIP as a threat to their members control over the information the HIP presents to a buyer. It’s a shame the Association has taken this stance as a) this is not fully representative of the view of a large number of estate agents, and b) its attention would be better focused on assisting the HIP industry to push for further and long overdue reform to the buying and selling process.

The Chief Executive of NAEA, Bolton King said: "The cost of the packs punishes sellers, while more than three quarters of buyers – 77 per cent - do not consider them before they decide whether to buy a property. During a recession this is an unacceptable situation. The NAEA calls on the Government to immediately suspend HIPs while the UK economy is in recession, and to commit to re-examining their viability once the economy is out of recession."

Interestingly Mr King does not echo the call of Grant Shapps for the ‘scrapping’ of the HIP, and is merely seeking the temporary suspension. The problem with this however is that a suspension would have the same result on industry as a complete cessation. It would die a death overnight. The fact that many estate agents have and continue to make a decent income out of HIPs may also be one of the reasons there is not an out and out call for ‘scrapping’.

Mr King in making his plea says over three quarters of people do not consider the HIP before they purchase. How does he know this as in the majority of cases the HIP is passed by the buyer to his or her solicitor who then checks the content and advises. If the solicitor finds on looking at the content there is a problem the seller may be advised to reconsider the sale.

Furthermore, as a HIP is nothing other than a bundle of legal documents with an energy assessment certificate, it is not surprising the buyer has little interest and relies on his or her solicitor to undertake the due diligence.

The statement is also devoid of any real understanding of section 162 of the Housing Act ( giving Government a power to suspend) as this is a power that can only be exercised in exceptional circumstances and one not designed for the purpose Mr King mentions.

Instead of always looking to the HIP as the cause of problems within the housing market Mr King should be advocating changes to the selling and buying process as surely it is in his members’ best interests to see the introduction of improvement in speed and transparency. It was only last month that Ian Tonge, chairman of the NAEA International Committee, stated that our system can "give you time to reflect. But I do think we could have a faster system of commitment."

Those advocating the retention of the HIP consider the HIP presents an excellent vehicle to bring about reform of this type and to bring about benefits for the consumer in terms of less cost and more importantly, stress.

Perhaps Mr King’s statement was designed to deflect attention away from his own industry given the article in this week’s Times Newspaper in which Estate agents were accused of boosting profits by strong-arming potential buyers into using in-house mortgage services, leaving customers thousands of pounds worse off.

It was reported: ‘Evidence has emerged that buyers are being pressured into taking additional services that earn agency staff commission payments’.

The report disclosed that a consumer survey prepared for the OFT found that one homebuyer in 20 who had taken a mortgage from an estate agent had been told he or she had to do so to secure the purchase.

The HIP is not perfect. It does however provide a buyer with information that would not otherwise be provided by an estate agent, as well as helping to speed up the selling and buying process once an offer is accepted.