Conservative Party give more detail on its policy on home information packs and energy performance certificates

The Conservative Party has released a document in which is tries to answer frequently asked questions on it's policy on Home Information Packs and Energy Performance Certificates. The document was sent out today by Grant Shapps' Office and can be read in full HERE

The home information pack leads to improvement in the quality and delivery of the water and sewage search

Two years into the era of home information packs it is easy, given the political uncertainty surrounding their future, to overlook the benefits of the change they have made in certain areas, to our antiquated home buying process.

One area in particular where there is real evidence of improvement is the delivery and quality of water and sewerage searches. Under the HIP regulations there is an obligation upon a seller to include within the pack comprising of legal documents and the energy performance certificate, information on the possibility of the property being flooded by foul sewage, as well as the established information about connection of the property to the public sewerage and mains water networks and the liabilities and restrictions associated with the proximity of water company assets to a property.

This represents a far more comprehensive collection of data than was previously supplied before the HIP was introduced and has clearly placed the consumer who is thinking of buying, in a far more informed position.

Encouraged by government to put into place improved infrastructure to cope with the expected increase in demand following the introduction of the HIP, water companies have invested heavily in new technology and service areas of their business, with the consequence that almost 90% of water searches in England and Wales are delivered in less than 3 days. This compares favourably with only 71% of searches being delivered in less than 3 days in 2006, prior to the beginning of the HIP regime.

There remain in my view areas within the water industry where there could still be further improvement. The cost of the water and sewage search still remains rather arbitrary and high, and as for the data the reports contain, there is strong argument for this to be delivered in a more consumer friendly summary so as to make it easier to follow and understand.

The water companies clearly have much to thank the HIP for, and as this has also resulted in a benefit to the consumer, it is hard to see why any future government, particularly a government that prides itself on being ‘progressive’, would wish to see an end to the ongoing improvements to the home buying process that industry is continuing to introduce on the back of the HIP.

Government gives it's support to the Home Information Pack industry

There was more debate in the Commons yesterday on Home Information Packs, and as sure as night follows day, Conservative MPS were at it again, raising the same old questions and quite amusingly relying on purported feedback from estate agents and the Law Society. Not the most reliable sources when it comes to looking for informed views!

The questions kicked off with a question that has featured before regarding the methodology to be used to evaluate the effectiveness of the HIP. As Government has explained on countless occasions in the past there is no up to date information on this though as the Parliamentary Under-Secretary of State for Communities and Local Government Mr. Ian Austin explained, the Baseline Report published in 2007 is in the process of being updated.

Not content with this Mr Austin was then challenged on the effectiveness of the HIP given that estate agents in Southend claim rather bizarrely that the HIP has damaged the property market.  I have to contain myself when I hear a claim of this type! I am no economist but really how can anyone claim with an air of credibility that the humble HIP costing little more than £200 has had such a major and catastrophic effect on the housing market. Utter rubbish!

At least with Mr Austin we have someone who understands the real world. In rebuttal MR Austin explained:

‘I do not accept that at all. Despite a difficult housing market, evidence shows that HIPs actually speed up sales. I am not sure whether there is a branch of Connells estate agency in the hon. Gentleman's constituency, but its survey of more than 37,000 transactions showed that sales with HIPs go through an average of seven days quicker.’

Not happy with raising a ridiculous claim the Conservative MP, Mr Mackay, decides to ask Mr Austin why Government continues to run with the HIP, presumably on the basis that the agents in Southend on which the whole country’s view is based think they are not working and should be scrapped!

Mr Austin then quite rightly responded by highlighting that irrespective of what the agents in Southend may think Mr Mackay needs to think beyond agents and take into account the thousand of jobs that would be lost if the Conservative Party is elected and goes ahead and ‘scraps’ the HIP. He told Mr Mackay:

‘ As always, I am very grateful for the right hon. Gentleman's advice, but I can tell him that thousands of jobs and hundreds of small businesses depend on the HIP process and 13,000 people have invested thousands of pounds in training as energy assessors. The Opposition need to explain why they want to put all those jobs and businesses at risk. He needs to tell all the people in his constituency whose livelihoods depend on the process why the Opposition want to put them out of work’.

From those lovely agents in Southend, attention then turned to the Law Society, the trade body that purports to look after the interests of solicitors. I say ‘purports’ as its my belief, and one shared by other solicitors, that it has little understanding of the needs and requirements of the high street solicitor and has done very little to protect those with interests that fall outside of the City.

Mr Jones, Conservative asked:

‘The interim results of the updated baseline research report are not due to be published until this summer at the earliest. Given that no empirical evidence is therefore available to the Government about the impact of HIPs on the current housing market, why do they not listen to bodies such as the Law Society, which has said clearly that HIPs "add a significant layer of costs for consumers but produce no discernable benefit"?

I am not sure which document this quote comes from but it is clear that as before the question is raised on wholly inaccurate information.  There is no added cost. The HIP is part of the legal process and with or without it the consumer pays the same. In fact the cost of selling and buying has come down since the HIP was introduced. As for benefits Mr Austin covered this in his response:

‘As a result of HIPs, more than 2 million home owners now have an energy assessment and recommendations in their energy performance certificate that can help them cut their fuel bills by hundreds of pounds and reduce carbon emissions. That is just one of the many benefits of the HIP process that we have introduced. I thought that tackling climate change was one of the big priorities for the new, modern Conservative party. So much, I suppose, for voting blue to go green’.

He added:

‘The recent Office of Fair Trading consumer research on the HIP process showed that a third of buyers were influenced by the HIP and that they had found the new property information questionnaire the most useful component of it. As I said earlier, Connells estate agents surveyed 37,000 transactions and showed that HIPs sped up the process, which is good news’.

Mr Austin was then asked about the Baseline Survey and of how this according to the Conservative MP Mr. Stewart Jackson showed there ‘was minimal public knowledge of and interest in HIPs, that people considered them a waste of time, that buyers were not consulting them and that costs were being duplicated’.

In response Mr Austin made the valid point that it is still too early too  make this type of claim and that in any event the research actually shows that the benefits are there to be seen:

‘As I said a short while ago, what the research actually shows is that in a short period, nine out of 10 buyers used the HIP. One in three said that it helped them decide which home to buy, which is a big improvement on the figures shortly after the introduction of HIPs, and shows that the system is becoming more helpful and useful all the time. The question that the hon. Gentleman and other Conservative Front Benchers must answer is why they want to sling out of work the thousands of people who have invested time and money in training to implement the process, and to cut the jobs of their constituents who depend on it’.

How refreshing to see Government sticking up for the industry it created and for highlighting the massive job loss that will follow if the HIP is scrapped. I  personally believe that Grant Shapps is also concerned about this aspect – he is a businessman and must be aware of the sacrifices, hard work and personal investment in both time and money that goes into establishing and making a business a success.  People in power and who ‘play’ politics must always keep in mind the personal tragedy that can happen when industries are dismantled for no reason other than political gain. 

Government defend home information packs in lively Lords' debate

A lively debate took place this week within the House of Lords involving as the Government’s spokesman, Lord McKenzie of Luton – the Parliamentary Under- Secretary of State, DCLG & DWP.  This stemmed from questions raised by Lord Redesdale on the subject of EPCs.

Below are some of the relevant extracts:

‘Lord Bates: My Lords, when energy performance certificates were introduced in Northern Ireland, they were not attached to the costly and bureaucratic home information packs. Will the Minister explain why the same policy approach was not taken in England and Wales?

Lord McKenzie of Luton: My Lords, home information packs are bedding down well and have proved to be a useful instrument to help purchasers. I think that the right decision was made.

Lord Tope: My Lords, how many buildings in the commercial and domestic sectors do not have EPCs?

Lord McKenzie of Luton: My Lords, EPCs are needed for buildings that are constructed, sold or rented out. There are something like 4 million domestic EPCs and 141,000 non-domestic EPCs on the register. I cannot specifically answer the question how many there should be, but there are high levels of compliance, certainly in the domestic sector.

Baroness Gardner of Parkes: Will the Minister comment further on his remark that the home information packs are bedding down well? Has he not read in the
press comments by estate agents saying that the packs have not been any help whatever, which I believe is the general public view?

Lord McKenzie of Luton: My Lords, more than 2 million HIPs have been prepared, providing important information up front to help to inform buyers' decisions. As a result, more than 2 million home owners now have an energy assessment and recommendations in their EPC that can help them to cut up to £300 off their fuel bills. Despite a difficult housing market, HIPs are helping to reduce transaction times. An estate agency survey, which looked at 37,000 transactions, showed that, on average, sales with HIPs go through seven days quicker.

Baroness Byford: My Lords, on the home information pack figures that the Minister gave us, how many people have had to go back and get new information packs because there is a very short timescale for their viability?

Lord McKenzie of Luton: My Lords, I do not have that information to hand, but I can say that we intend to evaluate the effectiveness of HIPs by updating the 2007 HIP Baseline Research report. The new report should be available later this year.

Grant Shapps' home information pack boomerang!

We should all know by now that Grant Shapps and his colleagues within the Conservative Party do not like Home Information Packs because they believe they cost too much and are also a prime example of the unnecessary bureaucracy introduced by the Labour Party.

Rational thought is given secondary importance. The fact they bring greater transparency and certainty to a very uncertain process, as well as speeding up the sale process is it seems of little interest. Instead political ideology lies as the heart of the obsession.

In trying to argue that the HIP is not a completely bad idea and that there are aspects that could be taken and used as a basis for reform one is often met with the accusation of ‘self interest’ and ridiculous assertions such as ‘no one wants them’. True as it may be that the HIP is a completely misunderstood part of the legal process of selling property, there is no independent evidence to suggest the consumer would be better off without the HIP.

One problem we have is that the HIP has only been around for a short period of time and has had to operate in very difficult times and has therefore had little chance to prove itself. It is for this reason that perhaps we should look further afield and to see whether there is evidence from abroad that could help.

In New South Wales in Australia there exists a similar obligation to that which exists within the HIP regulations. The legislation there requires a vendor to have a draft ‘listing contract’ prepared and made available along with other documents such documents equivalent to our proof of title and searches before a property can be offered for sale to the public. Failure to attach any of the required documents means that the buyer has the right to rescind the contract and recover the deposit within 14 days of the exchange of the contract.

The purpose of the legislation is to have a contract with all relevant particulars and attachments at the point of sale, to shorten the time for a formal exchange of contracts, once a buyer is located. Sound familiar?

The Australian experience speaks for itself. The process is a successful one. By delivering the information and documents ‘upfront’ the average transaction time is between 3 and 4 weeks as opposed to the 8 to 10 weeks imposed upon us in this country. This is strong evidence to support the retention of the HIP and for further reform to be introduced on the back of it. Let us hope that the HIP will prove to be Grant Shapps’ boomerang – a HIP that keeps coming back to haunt him however hard he tries to throw it away

The history behind home information packs shows that it is the consumer that counts

At a time when the future of the home information pack looks rather gloomy it is perhaps helpful to remember and remind ourselves of the background to, and reasons behind the establishment of the HIP.

In fact the HIP has its roots in a cycle of ‘boom and bust’ similar to that recently witnessed. It was following the housing boom of the late 1980s and the subsequent housing market recession of 1991-93, the then Labour opposition began to consider whether fundamental reform was needed in the housing market. This finally took expression in the Labour Party manifesto in 1997 which stated: "The problems of gazumping have reappeared. Those who break their bargains should be liable to pay the costs inflicted on others, in particular, legal and survey costs. We are consulting on the best way of tackling the problems of gazumping in the interests of responsible home buyers and sellers."

Upon election to Government Labour found following research that the current home sales process was wasteful and inefficient with around 28% of agreed transactions falling through between acceptance of the offer and exchange of contracts. As the then Minister of State, Jeff Rooker commented (28/12/2002): "Sellers' Packs will make the home- buying and selling process more transparent, faster and consumer friendly. They will reduce the stress and wasted costs suffered by hundreds of thousands of consumers each year."

Details of proposals for HIPs were published for consultation in "The key to easier home buying and selling' (DETR, 1998) and in chapter 4 of the Housing Green Paper 'Quality and choice: A decent home for all" (DETR, 2000a). This policy was confirmed in chapter 2 of the subsequent Housing Policy Statement "The way forward for housing" (DETR, 2000b). A pilot study in Bristol (ODPM, 2001) examined the practicality of HIPs although the number of packs evaluated was small. There was widespread criticism of the proposals but, despite that, the Government introduced a Homes Bill in 2000 that would have made a seller's pack mandatory. The Bill ran out of time as a result of the general election in May 2001. The Labour party reaffirmed its commitment to introduce a seller's pack in its manifesto and when re-elected consulted further on proposals for a HIP as part of a wider Housing Bill in March 2003. The Housing Bill was introduced in November 2003 and became an Act in 2004.

The Government faced a number of choices when it set about reforming the transaction process. These included the use of a binding contract over buyers and sellers, requiring lenders to provide faster mortgage offers and encouraging greater use of information technology to speed up the process. However, the Government took the view that ensuring buyers were better informed about the property they were purchasing would be the most practical way forward. A particular issue was the condition of the property. Only 20-25% of home buyers commissioned their own surveys before completing a purchase and it was felt that better information on condition in particular would improve price bargaining and make for a more efficient market.

The Government argued that HIPs would:

• Enable buyers and sellers to negotiate from an informed position;

• Increase openness and transparency, helping to make the process less adversarial and stressful;

• Help the parties commit more quickly to the transaction, shortening the period of uncertainty between acceptance of an offer and exchange of contracts;

• Increase certainty by avoiding unwelcome surprises which currently cause renegotiation and transaction failures after terms have been agreed;

• Reduce wasted costs resulting from high rates of failed transactions; and

• Help shorten the overall transaction timescale.

The Government's resolve to introduce legislation has been strongly tested. Although it was an original commitment was made in 1997 it was not until 2004 that legislation was introduced and passed.

It took this time as Government came across much resistance. This is not surprising given reform to the housing market has never over the centuries proved easy. However, it survived partly because the Government felt that despite the arguments being posed by solicitors and estate agents against reform, popular support remained very strong with the Department of Communities and Local Government, (or Department for the Environment, Transport and the Regions (DETR) as it was then), experiencing its biggest ever post bag of public support for the reforms when they were announced.

In March 2006 the government gave the go-ahead for multiple certification schemes. In June 2006 draft regulations were made setting out the detailed contents of Home Information Packs, rules governing the availability of packs, exceptions from the pack duties and arrangements for enforcement.[

Originally the HIP was going to be required from June 1, 2007. However, just ten days before that date, Communities Secretary Ms Kelly announced that they would be phased in from August 2007, and initially only for larger properties. Between 1 August and 10 September only homes marketed with four or more bedrooms were legally required to have an HIP. This was extended to cover homes with three or more bedrooms from September 10.

On November 22, the then Housing Minister Yvette Cooper announced that HIPs would be rolled out to include one and two bedroom properties as of December 14, completing the Government's phased introduction of Home Information Packs to residential homes marketed for sale within England and Wales.

A chequered history! However we are now here with an established industry through which the consumer is beginning to see and benefit from the delivery of the original objectives of greater certainty and transparency as well as shorter transaction times. After taking so long to get where we are it would be a travesty to be thrown back into the dark ages. We should learn from the lesson this history discloses, that is, irrespective of stakeholder self interest and the general lack of support for change within certain camps, at the end of the day it is the consumer that has and continues to be totally disillusioned with the home selling and buying process. The political party that tunes into this vein of feeling will be the party that has a greater chance of winning support for housing policy. At the end of the day the HIP informed consumer ‘gets’ the objective of the HIP and given the choice would retain the HIP providing it could be used as a basis for reform.

The HIPs experience could help solicitors cut costs and improve efficiency

My interest was drawn to the content of an article recently appearing in the Law Society Gazette by Catherine Baksi (www.lawgazette.co.uk/news)

The author in the article reports on the news that experts forecast an end to redundancies among conveyancing solicitors. Clearly good news for lawyers.

Paul Marsh, lead Law Society spokesman on property, is quoted as saying he expects low transaction volumes and seems to agree with me about the reasons for the problem, by pointing to anxiety over unemployment and ‘less appealing mortgage deals’ as the main contributing factors. He also expects the looming general election and the world cup as events that are likely to deter people from moving home.

Nothing new there, and it is refreshing to see a major stakeholder not using the opportunity to make the ridiculous claim (unlike some) that the cost of home information packs is also acting as a deterrent.

More interestingly however, is the advice Mr Marsh gives to his fellow solicitors telling them they need to do all they can to ‘........drive their costs down and improve efficiency’.

Good advice Mr Marsh, and one way of achieving this would, in my view, be to look at organising tasks within the conveyancing process and to delegate the more administrative tasks, such as form filling, to the army of energy assessors throughout the Country who are required, and who will continue notwithstanding a change in Government, to engage with sellers when carrying out the energy performance certificate inspection.

Furthermore, there is a need for a cost effective information technology solution, similar to the ones that currently exist within the Home Information Pack industry, which allows the seller solicitor to publish electronically documents and information to a viewing portal, so as to allow the buyer’s solicitor to view and download this material. This saves on paper; it avoids the delay of the DX and Royal Mail postal systems and is far more cost effective.

The same technology also allows the seller to upload documents and complete forms on line again saving time and money.

It’s a shame that the Law Society has not in the past chosen to give its support to the Home Information Pack Industry. If the Society had forged a closer relationship they would have witnessed the establishment of solid infrastructures as well as the introduction and implementation of sound and cost effective IT systems.

I am sure it’s not too late though, and I am sure the HIP Industry would be happy to share their experience and ideas with solicitors and work with the Law Society to find ways to improve efficiency and reduce costs.

Effectiveness of HIPs Survey to be Commissioned

News has today emerged of the Government’s intention to commission a study to evaluate the effectiveness of the Home Information Packs.

In answer to a question tabled by Grant Shapps, John Healey, the Housing Minister, explained:

‘We intend to evaluate the effectiveness of HIPs by updating 'The HIP Baseline Research Report' (http://bit.ly/6tiZyu), published in January 2007. We are currently in the process of commissioning the study through the established contract tender process, so the timing and cost have yet to be finalised. I expect the interim results could be available in summer 2010’

Bearing in mind the high cost of such a survey it is unlikely any future change in Government would lead to the cancellation of the inquiry, though it will remain to be seen whether the Conservative party would look to publish the results if they are successful in May. I suppose much depends on what the results reveal.

The move does reinforce the need for all those working within the Industry to make sure they do not overlook the importance of continuing with engagement with not only conservative MPs but also with those of the other main political parties. We need to make sure that both current and future governments are made aware of the benefits of the HIP.

The consequences to the Leashold Sector of the removal of the HIP

I am pleased to add to my blog an article that Sharon Crossland the founder of the excellent website http://www.leaseholdlife.info/ has kindly written.

The site is an information resource for leasehold owners, resident management companies and renting tenants. Sharon has written extensively for News on the Block, a publication specifically for flat owners, and has also written a number of articles for hipconsultant.co.uk. She has also been featured in the Observer on the importance of securing a good managing agent. Her experience and current role as acting intermediary between the Directors of her block's RTM company and their managing agent has led to her being accepted by the Institute of Residential Property Management as an Affiliate Member.

ARTICLE

I have been following the unfolding story of HIPs with a great deal of interest and came to the early conclusion that fundamentally they were a sound proposition. They came into the public arena in the guise of Sellers Packs in 1998 and transformed into HIPs in 2006 but their aim remained the same - to improve the conveyancing process. If anyone recalls how AHIPP laid out their stall they will remember that it was pretty well thought out. It's all somewhat irrelevant now though because if the Conservatives get into power at the next General Election they will probably be scrapped, at least in their current guise. The Shadow Housing minister Grant Shapps has made no secret of his hatred of them but he has yet to come up with either an alternative or any ideas on adaptation so where will this leave conveyancing, especially leasehold?

Of the two residential property tenures, freehold and leasehold (I am not including Commonhold because of its pretty non-existent takeup), leasehold has always been the more complicated tenure because of the involvement of additional parties and the complexities of the pre-contract enquiry information. The HIPs (No 2) Regulations broke down leasehold information into two sections – required (mandatory) and authorised (voluntary). There were fourteen questions in the voluntary section which were designed as a 'catch all' provision to allow sellers to disclose all, part or none of it, at their own discretion.

AHIPP were lobbying to get this voluntary information made mandatory and had arranged for the introduction of a Private Members Bill into the House of Lords in 2007. Unfortunately it was not pursued past a second reading due to other priorities at the time.

Sourcing leasehold information from third parties remained problematic in that managing agents were under no obligation to provide it either under the old system or the new and certainly not to a timeframe dictated by the seller. Pricing varied widely between agents as there were no statutory guidelines and a leasehold HIP was proving to be considerably more expensive than that of freehold. So at the beginning of 2009, the only mandatory document required for a leasehold HIP was that of the lease. There was however a new addition to the HIPs pack being worked on - the PIQ (Property Information Questionnaire) which was going to add some mandatory leasehold questions.

There has never been enough information on leasehold tenure provided early enough in the conveyancing process but I personally think that AHIPP have gone further to assist prospective leaseholders than anyone else. The fact that the lease was included as a mandatory document was helpful because buyers don't usually get to see what they have purchased and signed up to. This is due to the fact that the procedural element of assigning the lease is dealt with by the conveyancer, leading to buyers often finding themselves with defective leases (the other main cause of leasehold problems). The PIQ introduced some key mandatory leasehold questions which AHIPP thought was a good start and went some way to addressing the issue of putting leasehold information provision at the front of the conveyancing process, which it did. This issue was further assisted by the inclusion in the pack of the ARMA downloadable leaflet 'Living in Leasehold Flats' ensuring that yet more information would be getting out into the wider domain.

Whilst the issue of leasehold information provision is likely to be raised at a future meeting of AHIPP's legal and leasehold working group, which I hope will again focus on the voluntary information currently contained in the Regulations, the focus for the time being is on the future of HIPs should the Conservative win the general election. That is perfectly understandable but regardless of who wins, the leasehold sector cannot afford to lose this foothold on leasehold information provision. if it does, how on earth is any prospective purchaser going to be able to adhere to the guiding legal principle of buying residential property, that of Caveat Emptor' (buyer beware)?

Split within Conservatives on Green Issues

The lack of interest in preserving the home information pack, and the luke warm attitude towards the energy performance certificate within the Conservative Party has always puzzled me.

Why would a Party that continues to play the ‘green card’ at every given opportunity, be so determined to ignore rational argument about the contribution the HIP plays in bringing carbon emissions down by providing an effective delivery vehicle for the EPC?

Perhaps the answer is that the Conservative Party as a whole does not, despite the leadership green proclamations, see the green agenda as a high policy item. In an article that appeared in the FT on the 19th of this month Jim Pickard reported that the leadership is worried that Cameron’s backing for the green agenda is not shared across the Conservative party.

He reported:

“Reducing Britain’s carbon footprint” is the lowest priority (out of 19) of 144 PPCs, according to this Conservative Home poll. Anne Winterton in recent PMQs voiced the idea that heavy snow proved that climate change was a nonsense’

He added:

‘What’s fascinating is that the green issue is one on which both sides of the Tory party are prepared to take strong positions in public. Could it form the basis for a major falling-out if and when the Conservatives are in power?’

This revelation is startling and must throw further serious doubts on the Conservative Party’s green credentials. Perhaps we should all be writing to Grant Shapps and asking him why we should take seriously the assurances he has given about the retention and future role of the EPC, when it seems from this poll that he does not speak with the full support of his own party.

Can we trust this Party?

Are home information pack suppliers socially irresponsible?

I have just read an interesting blog entry  written by someone who operates as an energy assessor. Don’t get me wrong everyone is entitled to their opinion, and indeed I have a lot of respect for people who express their views, however the writer of this blog entry really needs to be less insular and to get out in the world and speak with others.

To begin with, the rant starts with a rather ludicrous suggestion that the cost of the HIP/EPC is having an impact on social mobility. The blogger actually goes so far as to accuse the HIP of ‘imprisoning’ some home owners. I have come across a wide range of reasons to support the abolition of the HIP but never have I come across such a comical observation.

The writer says referring to someone he knows:

‘He is now a prisoner in his own home, on the dole, and further hemmed-in by a lack of money to pay for a HIP’

How daft to blame the cost of the HIP and EPC for this situation. To begin with we all know that a HIP, including an EPC can be picked up for between £180 and £200. A large sum I agree, for some. However, is the cost of this really the determining factor when a home owner is thinking of selling? Surely jobs security, the availability of credit and the price of the property generally, are far more important?

Furthermore, if the writer’s friend has lost his job, and is looking to sale, yes he will have to find the money to pay for the HIP, but this is not the only cost he will have to meet as he will also need to instruct a solicitor to handle the sale. Before the HIP was introduced many solicitors would ask a seller at the point of instruction for a payment of account of between £150 and £200 to cover the cost of the searches. The ‘friend’ would still have needed therefore, with or without the cost of the HIP, to find the money to meet this requirement.

Social mobility is more to do with the availability of more affordable homes and or a move away from our obsession in this country with home ownership. We should perhaps look to the continent where far more people rent and are therefore able to move around without the hang up of sale associated cost.

The writer then turns his attention to the ‘tit for tat’ exchanges between the HIP proponents and those who support Mr. Shapps with his obsessive desire to rid society of the HIP. In particular his focuses on people like myself who he says often attempt to defend the indefensible.

He points out:

‘One survey metric the industry is unable to fight, but still insists on trying to disprove, is the lack of interest in HIPs from buyers. ..................... HIPs are for solicitors; punters don’t want to wade through 60-odd pages of legalese, for every property they visit’.

He adds:

‘One side says something and the other feels compelled to say the opposite, within days. It’s like a childish game of tennis; except the only people playing are the one’s with most to win or lose – they certainly don’t include folks like my friend, or the lowly DEA trapped in the middle of this mess’.

In response why should I and others be made to feel guilty for wishing to correct ant-HIP propaganda? There is so much misinformation out there and add to this political spin it is not surprising that the consumer is confused and holds a jaundiced view of the HIP. I make no apology for wishing to educate and speaking out on issues which I firmly believe in.

It is also untrue to suggest that suppliers of HIPs have not time for energy assessors or those in financial difficulties. There are many suppliers out there who value the contribution of the energy assessor and who do all they can to ensure the energy assessor is not overlooked! Remember also there are a vast number of energy assessors who double up as HIP suppliers and have used the HIP to help maximize their return on the delivery of the EPC.

As for doing more to help those who cannot afford to move I am not sure what more the industry can do apart from offering deferred type credit schemes, even though I accept these are not perfect. Is it, I ask, really down to the HIP industry to address this issue when as said above we have little influence ( apart from our individual right to vote) on the formulation of policy on economic factors such as unemployment, lack of high LTV credit, and lack of affordable housing.

And why pick on the HIP industry. Where do solicitors and estate agents feature? Surely the same argument applies to these professionals. Estate agents do not have to charge for the HIP, they could absorb the cost as part of their commission.

I agree however that the buyer may not have any interest in the HIP other than to pass it onto his or her solicitor once an offer on property is accepted. But hey what is new? A buyer has never been interested in the legal process – the only concern is that the transaction proceeds as quickly as possible. However the fact the buyer may not read or have interest in the HIP should not distract from the benefit the HIP offers to the buyer.

The writer considers that the lack of social responsibility as highlighted above also features within the constructive efforts of the Industry to come up with ways to improve the HIP accusing the industry of not thinking through the social consequences of their proposals. He writes:

‘Yet still the reformers remain blind to the HIP industry’s social responsibility in its proposals. As far as I can tell, they fail to recognize that markets do, shock, crash; and that people like my friend do actually, shock, and exist, because of these events.

And so consequently they fail to “stress-test” the implications – both financial and social – on house-prices, shock, actually dropping significantly’.

This is all well and good and makes good reading but the reality of the situation is as I say very different. The HIP industry is only a very small clog in the wheel. There are so many other far larger and more influential stake holders all with vested interest that would have to play a part in any reform. In addition to this we have the wider economic issues as set out above. Given all of this how on earth can one expect the HIP industry to carry out effective ‘stress tests’? The ‘housing crash’ remember, came about through decisions made by governments around the world despite carrying out before implementing such policy, sophisticated impact assessments! All the industry can do is to make suggestions and continue to engage with other stakeholders to ensure both economic and social issues are taken into account. It is incredulous to believe that the industry should be left with sole responsibility for everything that remains wrong about the hone selling and buying process and the housing market generally.

Not surprisingly the writer concludes his rant about how he sees HIP suppliers turning their attention when speaking about reform to the energy assessor and green issues. He comments:

‘In its desperation for strength in numbers, some voices within the HIP industry have even recently attempted to ring-fence DEAs into its camp, using the ploy of “green-washing” HIPs, and arguing that any abolition would not only be dangerous to the livelihoods of energy assessors (appealing to self-interest), but also the environment (politicians eyeing-up the green vote)’.

In writing above I have in making reference to the ‘HIP Industry’ viewed and continue to view energy assessors as part and parcel of those operating within it. The EPC is integral to the HIP and will continue to be in the future – they come from the same stable of thinking i.e. the early delivery of information and documents that will help a prospective buyer acquire knowledge of a property before committing to the transaction. I accept that there could be more done to improve the format in which this information is conveyed but for it to be suggested the HIP and the EPC should be viewed separately is nonsensical.

Energy assessors have always featured largely within the industry and unless they stand united with the HIP suppliers there is a real risk of the industry becoming fragmented and vulnerable. It is my belief that many energy assessors recognise that if the HIP goes it will not be long before the EPC finds itself consumed by large energy retailers and the like.

Furthermore, it can be shown with certainty that the HIP has provided an excellent and effective vehicle for the delivery of the EPC and with it the consequential green benefits. Again why should we be guilty of making these points and in so doing trying as best we can do preserve the jobs of all those working in the industry. Perhaps this is where the industry is delivering its social responsibility, making sure we and thousands of others do not land up like the ‘friend’ of the writer.

So in conclusion I believe the writer is completely off beam to suggest the removal of the HIP is the key to improving social mobility. Instead of knocking the industry that has probably provided the writer with a reasonable income over the past year or so, his efforts would be better used pressing both present and future governments to look at the introduction of more affordable housing and schemes to make it easier for those less fortunate to move.

Grant Shapps confuses shortage of homes with shortage of 'affordable' homes

Grant Shapps writing in the Guardian (http://bit.ly/6rEvY1) has come up with a rather interesting new angle for making his case on why the Conservative Party is looking to bring in measures to address what her refers to as the ‘Britain's acute housing shortage’. Cleverly, he tries to tie the issue in with the apparent rise in fertility induced twin births.

According to figures released by Shelter (http://bit.ly/76L28) high housing costs are forcing couples to delay starting a family. Shapps argues that this has a knock on effect with fertility given the late age at which some women look to take the decision to begin to start a family.

There may be some truth in this, but where Shapps argument falls over is when in the article he jumps from the focus of the problem of the lack of affordable property to talk about making it easier for ‘first time buyers’. These are two completely different issues and require different policy decisions.

Confusing the two issues is surprising for someone who carries the title of ‘shadow housing minister’. Moreover where in the article is mention of the underlying economic factors of lack of credit and rising unemployment, and of how these are impacting on house prices and the supply of housing. One would expect any new government to be focusing on these major issues and detailing its policy intentions. Instead we have Mr. Shapps banging on about how policy measure on stamp duty and home information packs will help.

Talking about the steps the Conservative Party will take Mr. Shapps says:

‘there are practical steps which can be taken immediately and – if we win the election – one of the first things we will do is to exclude nearly all first-time buyers from paying any stamp duty at all. Next we'll scrap the pointless, but expensive, Home Information Packs and then we'll encourage more homes to be built with our pledge to match-fund the council tax received when an area builds more homes’.

I am not sure how a stamp duty exclusion and the removal of a £200 HIP (that will be transferred to the legal costs and probably lead to the increase of the legal costs) will help create more affordable homes for all couples. It just does not make sense and smacks of a class related policy decision. Stamp duty and the costs of moving only become relevant to a home buyer when they are able to put an offer in on a property that they can afford.

Perhaps those middle class homeowners who have money saved to bridge the large LTV on mortgages, who have an impeccable credit rating and who are both working in secure jobs may have some benefit from these small incentives, but it is incredulous of Mr. Shapps to argue, even with the support of some cuddly words about fertility, that this is all going to lead to a resolution of the problem we have in building and providing more affordable housing to all ‘first time buyer’ irrespective of class or wealth.

Government Latest on Home Inspectors and Home Condition Report

Sarah Teather, the Liberal Democrat Housing Spokesperson, has been busy over the past week or so asking parliamentary questions of the Secretary of State for Communities and Local Government. The answers received do not reveal very much new, though do highlight a lack of monitoring on the impact of EPCs as well as deficiencies on the tracking of issues relating to Home Inspectors.

In response to the question about the effect on the level of energy efficiency of buildings John Healey revealed the absence of data and was also unable to give figures on the level of non compliance within the commercial and domestic sectors.

There then followed questions relating to the plight of the Home Inspector. Ms Teather asked John Healey to provide information on the number of Home Inspectors who have paid for training, whether any assessment of job opportunities for Home Inspectors exists, how many Home Condition Reports have been commissioned, and whether any assessment has been made of the voluntary roll out of the HCR.

Mr Healey’s response was far from enlightening:

‘The home condition report (HCR) remains authorised for inclusion in the home information pack (HIP) on a voluntary basis and certificated home inspectors are accredited to produce domestic energy performance certificates (EPCs) which are a required component of the home information pack. No such assessment of the job opportunities of home inspectors has been made.

Communities and Local Government does not hold information on the number of people who have paid fees to train as home inspectors, or the number of people who have undertaken or are undertaking such training. The most recent figure supplied to us by the national EPC and HCR register operator, shows that there are 971 certificated home inspectors as of 4 January 2010. This figure may include duplicate numbers of those home inspectors who have registered with more than one certification scheme.

Although since the decision in July 2006 to make the HCR an authorised rather than required document, we continued to promote the benefits of including an HCR within a HIP. However, take-up has been disappointing with only 327 reports lodged on the central register since 1 August 2007 and it is clear that the product as it stands is not seen as the right one either by consumers or industry.

We still believe that consumers should be better informed about any property they are looking to buy before making what is undoubtedly one of the biggest purchases of their lives and that they want information about the condition of homes before they commit to buying them. As a result Margaret Beckett established the Working Group on condition information in the home buying and selling process to explore options for ensuring consumers receive appropriate information about a property's condition before they commit to buy, by building on existing products such as the HCR, and creating opportunities for all practitioners including home inspectors’.

Regrettably there is no indication of a probable publication date of the Working Group’s findings, though given it's existence there may perhaps be a glimmer of hope for the beleaguered Home Inspector.

Personal property searches are more reliable than council searches

The debate of whether official searches should be preferred to personal searches continues to challenge the minds of many of us, particularly as personal searches are now far more widespread than they were prior to the introduction of home information packs.  In fact the majority of property searches produced within the home selling and buying process emanate from personal search providers.

Before the changes to the HIP Regulations in April 2009 major differences existed between search reports prepared by councils and those produced by personal search agents.  The main difference was that the personal search company could if certain data was not readily available take out insurance to cover any adverse consequences stemming from that missing information.

Since April it is no longer possible to include insurance of this type when producing a search report for inclusion within a HIP.  This has meant that for all intent and purposes the HIP pack search is as good as an official search produced by the Council.

Even though both personal and official searches are back by indemnity insurance cover, there is still in certain quarters a stigma associated with personal searches, with many property professionals viewing a personal search as an inferior product.

There is no rhyme nor reason for this view to be held and a from a report released by the Property Code Compliance Board which regulates the personal search companies that subscribe to the Search Code, it seems that quality control issues rest more with official than they do with personal searches.

In October, November and December 2009 the PCCB carried out thorough investigations of its Code Subscribers to check on the standards of personal searches compared with official.

Frank Finch of the PCCB reporting on the findings of this investigation stated:

‘A total of 58 searches, comprising 900 questions were scrutinised, with errors being found in just 3% of answers and none of these related to the substantive allegations that data was either missing or inappropriate data was being used'.

Finch went on to comment on the errors by saying that they:

‘Appear to result from a lack of diligence rather than deliberate attempts to short-circuit the provisions in the Code. This is borne out by the fact that these failings featured in searches conducted by both personal search firms and local authorities in roughly equal measure.’

The fact this investigation shows that over half of all errors or omissions identified in the exercise related to local authority reports, suggests that Official searches are no more reliable than those provided by personal search companies.

Has the time not come for the myth surrounding the personal search to be put to rest and for all regulated searches whether supplied by an agent or the council to be viewed as ‘official’?   Your views would be welcomed. 

Estate Agent supports legal front loading on property sales

How spooky – within weeks of releasing their draft proposal for Reform - New Year, New Start, the Hip Reform Group (http://bit.ly/5PTgxw) , seem to have found a chain of estate agents who are thinking along the same lines.

In an article that appeared today in the Daily Telegraph by Caroline McGhie – ‘Selling houses: 10 ways to open doors to buyers’ (http://bit.ly/8V6sNp) we see a spokesmen for the prestige estate agency chain, Savills encouraging sellers to engage with solicitors at the point of marketing:

“Speak to your solicitor well in advance,” says Justin Marking of Savills. “My advice would be to complete a standard preliminary inquiries form before marketing. That way, key information can be with their solicitors within 24 hours of an offer being accepted. Also, get your lawyer to prepare a draft contract before a buyer is found, so you are in a position to exchange within 10 days.”

Good advice Mr. Marking! Perhaps we can call upon you and other like minded agents to make representation to Grant Shapps on how he has before him with the HIP a ready made and effective vehicle for bringing about well overdue reform to the selling and buying process.  

HIP Overshadowed by Fear of Unemployment and Lack of Credit

Factors affecting the supply and price of housing stock seem at to be the focus of much attention at a time when many experts are making predictions about what is likely to happen to the property market in 2010.

In a recent article that appeared on lovemney.com a team of experts were invited to put forward their views on how they see  house prices panning out over the next 12 months 

Interestingly, only one of the invited experts, Mr Peter Bolton King, of the National Association of Estate Agents, chose the opportunity to make mention of the home information pack.  Commenting on factors influencing house prices he could not resist the temptation to knock the HIP by saying:

‘…..recent price rises have been driven by demand outstripping supply in some parts of the market. Supply will remain stable in the run up to the general election. However, if more properties come onto the market - which may happen particularly if Home Information Packs are scrapped - prices are forecast to flatten, and in some cases, fall’.

Bolton King purportedly speaking on behalf of the estate agency community is a known opponent of the HIP despite the fact that many of his members are still out there raising large sums of revenue on the back of HIP sales, and using the HIP to tie un-expecting consumers into expensive retainers.

It would be refreshing to hear the NAEA coming forward with their own proposal for reform rather than attacking without foundation every move made that has any mention of making the home buying and selling process quicker and more transparent.

Fortunately not all agents follow the NAEA line of thinking.

It is also reassuring that the real experts in this field were far more tuned in and picked up on the true economic factors that they consider are, and will continue in 2010 to affect supply and pricing.

Here is a sample of the comments:

‘Ernst & Young ITEM Club, an economic forecasting company, predicts a dip in the first half of 2010. Hetal Mehta, Senior Economic Advisor at ITEM says the recent surge in house prices is a 'false dawn', supported by cash buyers and the shortage in property. Again, prices are expected to fall due to a dearth in available mortgage funds and tight lending criteria.’

‘The Halifax predicts prices will be flat in 2010.The mortgage lender isn't convinced the upward trend in 2009 will be repeated in 2010. Although lower rate mortgages and recent improvements in the labour market have fuelled prices in the short-term, the lender is unable to see a sustained recovery this year unless the economy strengthens, and the supply of properties for sale increases significantly.

‘Royal Institution of Chartered Surveyors (RICS) predicts prices will rise between 1% and 2% in 2010. Simon Rubinsohn, Chief Economist at RICS forecasts the shortage in supply will continue with stocks on surveyor's books remaining at historical lows. This could fuel further house price gains in the early part of the year. The imbalance between supply and demand is expected to narrow, resulting in a rise in the number of property transactions as stock gradually increases. Transactions are forecast to step up from a monthly average of 55,000 or 60,000 to 70,000.On the downside, first time buyers will face continued difficulty in finding mortgage finance unless assisted by parents. While cautious lending, a flat labour market and uncertainty in the economy will result in low house price growth.’

Lovemoney.com also courted the views of the consumer.   Their survey showed that the consumer expected prices to increase by 3 %.  They gave the reason for this as follows:

‘Confidence is rising among bullish consumers following a stabilisation of house prices during the latter part of 2009. However, rising unemployment is expected to temper stronger growth in 2010, while the ability of borrowers to raise a sufficient deposit is also seen as significant barrier’.

In conclusion there is little certainty amongst the views expressed on expected price increases/decreases, though the reasons for the stock shortage and prices fluctuation are far clearer. The fear of unemployment and lack of high LTV mortgages are clearly the only influential factors.   The HIP factor pales into insignificance when compared to these major economic factors.