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Homeowners are being advised to be cautious about marketing campaigns by estate agents in the run-up to the introduction of home information packs (HIPs), which will be compulsory for anyone selling their property from June 1.
The government has faced a cacophony of calls to abandon – or at least delay – the introduction of the packs, the most important element of which is an energy performance certificate that will rank homes from A to G, depending on how well they generate and conserve heat. Plans to include a compulsory, far more comprehensive home condition report were scrapped last year after complaints that buyers would not trust it and mortgage lenders would not take it into account. Its inclusion is now voluntary.
Last week, a Conservative bid in the Commons to block the packs’ introduction was defeated, but another challenge looms in the House of Lords this week. The Royal Institution of Chartered Surveyors (RICS) has sought an urgent judicial review, claiming that the Department for Communities and Local Government, the branch of government responsible, failed to carry out proper consultation before introducing HIPs.
Concern has centred, in part, on the handling of trials of the packs in Bath, Bristol, Cambridge, Huddersfield, Newcastle, Northampton, Wales, Southampton and London, in which they were available for free.
The government claims that the lessons learnt were incorporated into regulations released earlier this year. It has yet to release the full results of the trials, however, and RICS says its attempts, with the National Association of Estate Agents (NAEA), the Council of Mortgage Lenders and the Law Society, to meet the housing minister, Yvette Cooper, and discuss their concerns were repeatedly rebuffed. It also claims that the government breached its own legislation by slashing the time available to examine the regulations.
Many estate agents, meanwhile, have launched marketing campaigns to rush people into putting homes on the market with them before June 1 – so they will not need a HIP for six months – or to lure them with the offer of free packs. (HIPs are expected to cost more than £350.)
Paul Marsh, deputy vice-president of the Law Society, has expressed concern. “Sellers could unknowingly sign up to a sole-agency agreement if they opt for a free pack,” he says.
Hamptons International, one agency offering a free pack, says that anyone who signs up, then decides to use a rival agency instead – or even take their property off the market – would have to reimburse them. “If a buyer wants a free HIP, they sign a sole-agency agreement with us,” says Ian Westerling, a regional sales director for Hamptons. “They cannot use another agent. That is part of the proposition of us offering a free HIP.” Peter Bolton King, chief executive of the NAEA, says he expects other agencies offering free packs to behave similarly. “If an estate agent is funding a HIP, then before they release that pack, they will want paying for it,” he says. “We could see a return in sole selling rights and a reduction in multiple-agent instructions, as people won’t want to pay for several HIPs.” But, he adds: “Whatever the contract terms are for withdrawal, the agent has to make that sort of thing perfectly clear at the beginning.”
Others warn that sellers should not let themselves be seduced by the offer of a free pack when choosing how – and with which agency – to market their property. Much more important will be how effective the agency they choose will be at selling it at a good price. Such is the hype, however, that the looming deadline appears to be concentrating the minds of sellers.
Research released by RICS last week showed a rise in instructions to sell property for the second consecutive month, after the longest decline in seven years, as buyers apparently rushed to beat the deadline.
“This is causing a big surge of property into the market, dragging potential house sales from June and July into May,” says David Stubbs, the institution’s chief economist. What will happen after June 1 remains the great unknown. Stubbs predicts a “drought of property for sale” if, as many expect, there is a shortage of trained energy assessors. This would considerably slow down the rate of new instructions, since agents would not be allowed to market a property without an energy performance certificate in place.
Dominic Agace, executive director of the agents Winkworth, warns against exaggerating the likely effects of the new rules. “We are talking about £350-£400 as part of a much larger transaction,” he says. “Stamp duty alone stretches to thousands. Issues such as interest rates will have a much greater effect.”
Stubbs agrees: “Britain remains an inexpensive place to buy or sell property – in terms of transaction costs – compared to our European neighbours, America or Australia.”
- Besides an energy performance certificate, a HIP must also include: full title deeds and maps of the property boundaries; local-council and utility-company search documents; details of leasehold arrangements in the case of flats; a new homes warranty if the property is less than 10 years old; building consents and planning permissions, as appropriate.
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HIPS packs will not stop gazumping - there is no provision within the packs to stop this practice. The Survey Report is no longer compulsory within the pack, but would you really trust someone else's survey anyway? Under EU law, all houses must have an energy performance certificate by 2009. This should have been done years ago - how long has the Government been in 'power'? Surely our own Government should have recognised this was essential, why did it take an EU directive to make it law?
Please someone tell me why the present Government deems a HIPS pack necessary! It would seem that this is YET another way for certain companies to cash in on the unsuspecting property market.
Angie, Swindon, UK
Is it possible for a home owner to assemble the HIP themselves by carrying out the searchs and hiring a DEA to produce the EPC?
Surely that would save the home owner most of the costs of producing it?...
charlie, bristol, avon
The RICS is undoubtedly a fine organisation and one trusts they will charge in to the rescue in this half-baked and underplanned HIPS imposition. Has this country gone mad?. Refuse inspectors, light-bulb inspectors - what the dickens will be next?. I was always led to believe the Gestapo had been terminated at the end of WW2 in 1945.
Piggy Kruger, Bridgwater, UK
HIP's are just another way for the government and estate agents to rip people off. Noone is going to accerpt a HIP as gospel as to condition of a property. I certainly wouldn't, how can we trust such a document when it will be so easy to forge, falsify etc....
Robert Brayshaw, Otley, UK
Do we need someone to hold our hand from the cradle to the grave ? Surely much of the information should be obtained durung the searches carried out by a solicitor when buying a house. The energy effeciency of a house and appliances can be assessed by the buyer if utility and insulation bills are made available for a minimum of one year. perhaps as a legal requirement.
Take responsbilityy for life but remember Buyer beware
thinking man , Galilea, Spain