The Conservative party has made no pretence about its desire to \u2018scrap\u2019 Home Information Packs (HIPs) should as is likely it gain power in spring of next year. Is this a credible policy which can be backed with intellectual argument or is it simply an easy way of trying to win the populist vote?<\/p>\n
In this article I will look at both sides of the argument and will, despite my vested interest in seeing the HIP<\/a> retained, try and provide a balanced analysis of the issues.<\/p>\n I start with recording below an e-mail which was recently forwarded to me in response to a letter sent by a DEA<\/a> to the Conservative Leader\u2019s office:<\/p>\n David Cameron has passed your email onto Grant as the Shadow Housing Minister and he in turn has asked me to get back to you with his thoughts.<\/p>\n Governing means deciding and we’ve always been very clear about HIPs and voted against them from the outset. It’s not therefore that surprising that we will abolish them.<\/p>\n I fully appreciate how difficult this is for you and share your anger about the money you and others have spent on training. I believe that this Government has led you up a garden path by introducing a needlessly bureaucratic, expensive and largely pointless piece of legislation and I 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.<\/p>\n We will of course look at ways to ease the transition for those who are already trained or training as HIPs inspectors, but we will not be keeping the current system.<\/p><\/blockquote>\n This clearly leaves one in doubt where the Party\u2019 policy currently stands. Indeed, it mirrors what was said to me at a meeting I attended earlier in the year with the Party\u2019s Shadow Housing Minister, Grant Shapps. He made it clear HIPs were to go but the EPC would be saved though it would not be required before the property is marketed.<\/p>\n In short they see the Home Information Pack (HIP) as a:<\/p>\n On the face of it and without closer analysis do these reasons stack up? Even if they do, the real question which needs to be considered is whether it would still in the best interest of the consumer be wise to \u2018scrap\u2019 a system without having an alternative plan for reform?<\/p>\n The introduction of HIPs was shambolic, that there is no doubt. However credit must be given to the Government for making changes to the home selling and buying process, the first changes since 1925!<\/p>\n It\u2019s easy to pick holes and attack. but much harder to come up with ideas on how an antiquated system can be improved for the benefit of the consumer.<\/p>\n So let us look at the conservative arguments.<\/p>\n No.<\/p>\n There is no evidence to support this view. Other more significant factors are more likely to be the cause such as the shortage of mortgage funds and rising unemployment.<\/p>\n Apart from the cost of the EPC<\/a> which the Conservatives are looking to retain, there is no extra upfront expense to the home seller and purchaser. Furthermore, the Conservatives are proposing an increase in the Stamp Duty threshold which would be a far more effective means of encouraging people to market their property.<\/p>\n I also wonder whether the Conservatives have given any thought on how their policy will affect the market come early next year. If, as expected, the election is held in May or by 3rd June at the very latest, a Conservative Party pledge to scrap HIPs would be likely to cause vendors to hold off putting their houses on the market until after the election, during what is normally the busiest period of the year. Recovery in the housing sector is already fragile and this would stifle further recovery to the detriment of the whole economy.<\/p>\n No.<\/p>\n If HIPs are scrapped the seller will still need to commission the EPC and property searches and the cost of this will be no cheaper than a HIP! At present the only extra cost to the selling process is the EPC as all of the other documents in the HIP would be required with or without the HIP!<\/p>\n The anti-lobbyists comprise some estate agents and lawyers. They have all done well out of the boom years under the old regime and see no reason for change. They have little regard to the consumer\u2019s best interests.<\/p>\n Over the summer, Ipsos MORI conducted a survey of over 2,000 consumers actively involved in the home buying and selling process. The results are due to be published shortly. I can at this time tell you that the headline findings show a positive consumer attitude towards improving the home buying and selling process through the provision of upfront information.<\/p>\n Another way of looking at the arguments is to consider what the consumer would be left with without the HIP. In short we would be left with:<\/p>\n AHIPP is encouraging the Conservatives not to \u2018scrap\u2019 without first providing time for reflection, review and consultation. They are being asked to:<\/p>\n The wider economic ramifications of abolishing HIPs should not be ignored.<\/p>\n The industry has now been up and running for over 2 years and has already become firmly embedded within local and national economies.<\/p>\n Continue reading the article, next page.<\/a> The other main theme running through any consideration of the benefit or otherwise of the HIP is the Green issue.<\/p>\n Energy Performance Certificates<\/a> (EPCs) are an integral part of the pack and are having a positive impact on the behaviour of consumers towards energy efficiency in their homes resulting in tangible carbon emission reductions.<\/p>\n EPCs are vital to the UK meeting its climate change obligations and research demonstrates that consumers are using the recommendations in the EPC to implement energy savings measures. Conservative plans to move EPCs to the end of the home buying and selling process would have a disastrous effect on the progress made to date and would be in breach of European law relating to the energy efficiency of homes. From a practical perspective Mortgage lenders have previously tested providing energy reports with their mortgage valuations but consumers totally ignored them.<\/p>\n Domestic energy consumption and efficiency are key areas which the UK is looking to improve upon in order to meet its climate change targets. Given that over 25% of UK carbon emissions are produced by domestic properties, it is vital that the benefits of the EPC are fully exploited.<\/p>\n The inclusion of EPCs in HIPs is demonstrably delivering the benefits for which they were designed:<\/p>\n It is also important as part of this analysis to consider how HIPs are viewed by other interested parties. It\u2019s essential that the Conservatives consult with stakeholders and other interested parties before making a final decision on the fate of the HIP.<\/p>\n At the Land Data Great Housing Market Debate in April 2009 a panel of experts, during discussion and debate on Home Information packs, unanimously agreed that \u201cwhile packs had been poorly implemented they should not be scrapped but instead adapted and improved\u201d \u201cOf all the Tories’ pre-election promises, the one I find the most bizarre is the obsession with abolishing Home Information Packs. Granted, the property market is on its knees with the lowest number of house sales for decades. But having said that, I have seen not a jot of evidence that HIPs have anything to do with this and I have not heard of a single seller – or buyer – who believes that the packs have been even a marginal factor. In fairness, the Conservatives did say that they would abolish HIPs even before they were made compulsory and the way they were introduced by this government can at best be described as a shambles. However, I have always been, and remain, totally unconvinced by the Opposition’s case against them (the LibDems are also anti), especially now that they’ve been around for over two years now and no one has died yet. Most packs cost under \u00a3400 and include a mandatory energy report. This would now have to be carried out anyway whenever a property is sold and would cost at least \u00a3150 on its own. So I cannot believe that the packs can possibly be a major factor in the sale of houses, many of which are worth 1,000 times that. Moreover, the main objectors to HIPs from the property world itself have always been the estate agents and the Law Society, while the consumer watchdog Which? has always been in favour. Who would you rather trust?\u201d \u201cThe current home buying process is one that fails consumers. While efforts have and continue to be made to improve it, while this market failure exists, Which? does not support the abolition of Home Information Packs (HIPs). Which? still believes the principle of a HIP is a good one. We support consumers being better informed about what is likely to be the biggest purchase of their lives – their home. This applies in particular to first time buyers who need better independent information. But HIPs in practice have been of limited value. The inclusion of the property information questionnaire was welcome but there is still much work to do to improve the home buying and selling process and to raise standards. In short, though HIPs were supposed to speed up house sales, reduce stress and hassle by empowering consumers and save consumers’ money, the jury is still out.\u201d \u201cEPCs have the potential to be valuable tools in raising awareness of the energy performance of homes and in encouraging change. It is key that \u2018first day marketing\u2019 of EPCs remains in place. The EPC label should feature on the front of the particulars of properties for sale and\/or rent to enable people to become much more familiar with the energy ratings of homes and therefore, associated running costs. The EPC rating should also be required to feature in all marketing material, including estate agents\u2019 windows, press and internet advertising for sales and lettings.\u201d We are firmly behind EPCs playing a major role in the home buying process and, therefore, they should be a priority in all vendor pre-purchasing surveys. Indeed, they are essential part of the important process for moving forward the UK\u2019s existing housing stock towards zero-carbon ratings by 2050. To place EPCs at the end of the priority list would be a retrograde step. The Law Society is currently consulting on proposals for a membership scheme that would explore “the development of completion-ready packs (taking HIPs to their logical conclusion)”. The National Association of Estate Agents do not appear supportive, but I question whether their view is representative of all their members, and furthermore whether their view would change if the first day marketing regulation was once again suspended.<\/p>\n Continue reading the article, next page.<\/a> Not all conservative party members advocate the abolition of HIPs. Some say the HIP should be retained but on a voluntary basis. I can understand why they say this but I wonder how many of them have actually thought this idea through. One of the major benefits of the HIP is the positive impact this is having on the reduction of time it takes to proceed to exchange. If in say a chain of three only one of the vendors had made use of the HIP the transaction would not as a result of this be any quicker as it will only be as fast as the slowest part to the chain.<\/p>\n Making the Home Information Packs (HIP) voluntary would also lead to the return of the abortive sale and the loss of the associated costs.<\/p>\n We have looked at what the Conservatives say and have addressed their arguments. I have already touched upon some of the stated benefits of the HIP but I thought it would for the sake of completeness be helpful to summarize the main arguments for retaining the HIP:<\/p>\n So having looked at, and considered the arguments from an intellectual angle, rather than form a political one, where does all of the information and evidence point?<\/p>\n To \u2018scrap\u2019 the HIP without a replacement would send us back into the dark ages and therefore one thing is for certain this should not be viewed as an acceptable option.<\/p>\n Apart from destroying overnight a well established and high value industry what would \u2018scrapping\u2019 the HIP achieve? Surely such a policy can no longer be viewed as a \u2018vote winner\u2019 with the Conservatives so far ahead in the polls? It\u2019s not going to win them any further votes. The only argument that could conceivably be advanced with a degree of credence is that the Home Information Pack is stifling the market. There is no evidence however to show that this is so. No economist has come forward to support this view; all we have are estate agents with vested interest saying it is putting sellers off. Surely this in not enough evidence to justify the total scrapping of regulations, which after a shaky start, are beginning to deliver, and delivering well. Ask yourself if you were in control of keeping or retaining HIPs would you base your opinion solely on what some estate agents are saying? You would almost certainly take on board the views of all interested parties, particularly the consumer. The imminent publication of the Mori Poll results will signify the production of the only truly independent survey of the consumer and will without be doubt be a piece of evidence which even the hardest opponent to the HIP would find difficult to ignore.<\/p>\n At the meeting with Grant Shapps he agreed to review his position on the production of evidence to show that the HIP is producing benefits and in particular is helping the consumer. It will be interesting to see what his view will be on considering the results of this poll and also the feedback I know he has and will continue to receive from his fellow MPs following their meetings with DEAs and HIP supporters around the country.<\/p>\n One thing is for certain, until the Conservatives are elected, nobody knows for certain what they will do. To do nothing at this stage and hope for the best is a dangerous and unadvisable policy. Whatever your view may be I would urge you to contact and engage with your local conservative MP or the prospective conservative candidate.<\/p>\n By David Pett, Solicitor and Director of Hipshomes Limited<\/p>\n","protected":false},"excerpt":{"rendered":" The Conservative party has made no pretence about its desire to \u2018scrap\u2019 Home Information Packs (HIPs) should as is likely it gain power in spring of next year. Is this a credible policy which can be backed with intellectual argument or is it simply an easy way of trying to win the populist vote? In […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,4,11,52],"tags":[169,228,46,21,229,230],"class_list":["post-1034","post","type-post","status-publish","format-standard","hentry","category-epc","category-home-information-packs","category-news","category-property-conveyancing","tag-benefits-of-hips","tag-hip-law","tag-hip-legislation","tag-hips","tag-scrap-home-information-packs","tag-scrapping-hips"],"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/www.hip-consultant.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1034","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.hip-consultant.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.hip-consultant.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.hip-consultant.co.uk\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.hip-consultant.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=1034"}],"version-history":[{"count":49,"href":"http:\/\/www.hip-consultant.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1034\/revisions"}],"predecessor-version":[{"id":6154,"href":"http:\/\/www.hip-consultant.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1034\/revisions\/6154"}],"wp:attachment":[{"href":"http:\/\/www.hip-consultant.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=1034"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.hip-consultant.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=1034"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.hip-consultant.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=1034"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}So why do the Conservatives wish to see an end to the HIP?<\/h3>\n
\n
Is the HIP restricting the supply of property to the housing market?<\/h3>\n
\nThe cost of the HIP which is around \u00a3300 plus VAT can in any event be deferred using interest free credit with Lloyds Bank and Close Brothers, active lenders in this market.<\/p>\nDo HIPs add to the cost of selling?<\/h3>\n
\nIn all probability the price of EPCs and property searches would increase. Indeed, the price of property searches since the introduction of HIPs has come down by around a third.<\/p>\nIs the HIP of benefit to the consumer?<\/h3>\n
\nIt is in their interests to ensure that reforms to the home selling and buying process are kept to the minimum.<\/p>\n\n
So what is the alternative?<\/h3>\n
\n
\n
\nThe Home Information Pack (HIP) Industry:<\/p>\n\n
\n
What is being said about Home Information Packs HIPs and by whom?<\/h3>\n
\nKate Barker, former MPC member
\nDavid Miles, Chief Economist, Morgan Stanley
\nMichael Coogan, Director General, CML
\nHugh Pym, Chief Economics Correspondent, BBC
\nGrenville Turner, Group Chief Executive, Countrywide<\/strong><\/p>\n
\nMira Bar-Hillel, Property Correspondent, London Evening Standard<\/strong><\/a><\/p>\n
\nMark McLaren, Which? Public Affairs and Policy<\/strong><\/p>\n
\nColin Butfield, Head of Campaigns, World Wildlife Fund<\/strong><\/p>\n
\nAndrew Leech, Executive Director, National Home Improvement Council<\/strong><\/p>\n
\nLaw Society, Improving Residential Conveyancing, June 2009<\/strong><\/p>\n
\n
\nInterestingly, and perhaps a telling factor, the NAEA has chosen not to carry out a survey of its members on this subject. I find it ironic that estate agents are purporting to support abolition when on the admission of a number of their profession it has been the revenue earned on the sale of HIPs which has helped keep businesses afloat.<\/p>\n\n
Conclusion<\/h3>\n