Jill Sherman, Whitehall Editor
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Property experts gave warning yesterday that the Government’s “hasty” decision to extend home information packs (Hips) to three-bedroom properties next month may lead to a slump in the market.
Ministers announced that Hips and energy performance certificates (EPCs) would be mandatory for all houses put up for sale with three bedrooms or more – covering half the market – from September 10. No decision has been made about when they will be phased in for smaller homes.
Baroness Andrews, the Communities Minister, said: “Hips and EPCs can help families to save hundreds of pounds off their fuel bills and cut a million tonnes of carbon a year. They also have the potential to reduce the millions of pounds wasted by consumers when buying and selling a home.”
The Royal Institution of Chartered Surveyors said that since the packs were introduced for four-bedroom homes on August 1, the number of those houses put on the market had dropped dramatically. Jeremy Leaf, a spokesman, said: “We find it hard to believe that the Government is pressing ahead with this policy at such short notice without first conducting a proper market-impact study. Preliminary reports suggest a substantial reduction in the number of fourbed properties coming on to the market.”
From September 10 all homeowners will have to commission a Hip, giving details of land searches and title deeds, when they put their home on the market. In addition they will have to produce an energy performance certificate, which will rate their home on energy efficiency. The combined pack is expected to cost between £200 and £400 a property, although some estate agents are providing it free.
Initially the packs were to include a home-condition report, but this element was dropped last year, partly because of the extra cost. Later Yvette Cooper, the Housing Minister, was forced to delay the introduction of the packs for two months and then to bring in the policy in phases, because of a shortage of home inspectors.
Grant Shapps, the Shadow Housing Minister, said: “The announcement that this pointless red tape is going to be imposed on three-bedroom homes from September means many more people will now face extra cost and bureaucracy when they buy or sell their homes.”
Representatives of the housing industry suspected that the Government had bowed to pressure from Hip providers, who were training thousands of home inspectors and energy assessors. Although fewer than a thousand were trained before this month, this figure has increased to nearly 3,000. Home inspector firms had been
threatening to sue the Government if it scrapped the policy.
The Association of Hip Providers has been pressing ministers to announce a September launch for three-bedroom homes and an October start for the remaining properties. Mike Ockenden, its director-general, said: “We are delighted that the decision has been made so soon after the introduction of four-bedroom homes on August 1. With some 3,500 assessors now accredited and ready to go, I would expect this to be extended to all homes very soon.
“I would now strongly urge the Government to extend the implementation to the rest of the housing stock, so that Hips can really start to do the job they have been brought in to do.”
Warren Bright, chief executive of propertyfinder.com, said that the new rules would drag half of all houses, about 55,000 transactions a month, into the Hips net. “There is no concrete data to suggest that the initial rollout was a success. In fact, most estate agents remain unconvinced that Hips are at all effective in smoothing the transaction process,” he said.
Made to measure
- All three-bedroom homes on the market from September 10 will need a home information pack, containing title deeds, land searches and an energy performance certificate (EPC)
- EPCs, which cost about £100, rate the energy efficiency of a home on the scale AG, with band A having the lowest fuel bills. They also rate on a scale of AG the home’s impact on the environment by measuring CO2 emissions
- Each rating is based on the performance of the building and fittings such as heating, lighting, insulation and double glazing. The certificate also takes into account the age, location, size and condition of the home
- The average British home is in bands DE
- The certificates are commissioned by the seller from an accredited energy assessor Source: Department of Communities and Local Government
Source: Department of Communities and Local Government
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If it was implemented in the correct manner then it would be a far better way of selling a house, it seems to me that the people moaning about the introduction of the hip packs are the surveyor and alike that are going to be done out of the vast number of return visists to pre surved properties, which is a waste of the buyers money. if one survey by the seller is all that is needed and everthing is out in the open from the start where's the problem. if the buyer wants to have a more indepth survey done before purchase then there is nothing stopping them. i think the public perseption of the HIP has been clouded by the individuals that are going to be loosing money as a result of them being introduced
Steve, Birmingham,
It always amazes me why everyone thinks Scotland has such a good system for selling. Unless it has changed since the eighties it works like this: Prospective buyers each have their own survey and submit an offer through their lawyer to the sellers lawyer. The buyer has no idea of other offers so could loose the property for a few quid or pay far too much. Acceptance of an offer is made via lawyer to lawyer in letter and is legally binding. So you do that time and again untill you get lucky or pay too much. Good for surveyors. I found a profit in renovating the homes that I lived in but found it so hard to purchase with this system that after two I moved south and found the current system in England so simple. If your house is not selling, maybe you shouldnt have went with the agent who gave you the highest value, drop the price. It takes two months to complete on average, big deal. Try selling your home first, rent for 6 months looking to buy as more of a cash buyer.
kenny, hove,
May lead to a slump? My daughter works in a solicitors and reports that house sales have fallen off a cliff and the poor HIP inspectors who left good jobs and paid to train are in dire straits. I myself would like to downsize and let a family buy my large house but it is never going to happen while these ill conceived HIP's are around. I suspect I am not alone.
Ron, Bedford, U.K.
I support HIPS but the (flawed) EPC came through our agent for £223, including floor plans. Not many 4 bed houses of 220sqm. offer heating and hot water bills under £600 p.a. but the house was assessed at just 'D'.
Frank Readhead, Cambridge. CB25 0HT, Cambridgeshire
Hips will for a while remove speculitive sellers the type that dont complete after the buyer has had costs often way over the £300 quid of a hip.
It will not be long before the cost is within the cost of employing an agent they need to provide the complete service, then the cost will drop and the market will allow the type of seller that does not complete will be back with us.
We need in England a system that stops these sellers from being able to pull out without any cost to them.
mike don, Leicester,
I was going to put my house on the market but the though of paying for HIPS when I might not get a buyer has made me forget the idea
Joe Blogs, London,
This is really an unnecessary extra piece of paper. If it really had some worth it might be different.
The government should be looking at the house buying process in England, which is a nightmare. Where buyers can put in an offer, without spending a penny, holder other sellers to ransom and so on. The government's energies should be looking at the house buying process more than tinkering around with energy survey and so on. Streamline the buying process like Scotland. But then again there are too many vested interests, solicitors, mortgage brokers ........................
KEITH HILLMAN, PHETCHABURI, THAILAND
I am an estate agent on the South Coast. An energy assessor came in the office yesterday to carry out an inspection. We chatted and he said that he was about to pack it all in.
Apparently, to date, he has done so few surveys that he has now got to go out and get himself a proper job.
So far, this was our first HIP form and the assessor is chucking it in through lack of business!
One less assessor in a marketplace where there is apparently a mega-shortage of qualified staff!
Another fabulous Labour idea.
Simon , Brighton, Sussex
I agree with James comment as £300 compared to cost of buying a house in the hundred thousand range become irelevant. If the £300 is such a problem for sellers then they will just add this onto their sale price, and buyers are not going to turn down buying a house over £300. Even if the HIPs shows negative results for the house in the energy saving report, in this market people are still willing to buy. The interest rates and shortage of houses are giving the sellers the advantage when selling their house. I believe the number of people coming into this country to work has increased which has fueled the demand.
Sunil, London, UK
I think one reason for the sudden impulse on the part of the government to include 3 bedroom houses, to artificially support house prices by reducting potential seller pool, thereby avoiding the market's natural tendency to correct itself after the exceptional gains overe the years..
Why? Dropping asset value loses elections. Remember the negative effects of the last downturn on the government then in power.
J Wilks, Keysham,
Europe says you're having energy performance certificates, Labour says you're paying. - Intrusive, expensive, bureaucratic - all stock Labour and EU traits. If buyers required them they'd buy them - they dont.
Be interesting to see what happened if everyone withdrew property from the market for a month, wont happen though - you'll all moan then cough up, as usual....
Paul , harlow, england
What he said, yeah!,
Len, London Town,
Am I missing something here, Property "experts" are complaining about an extra cost of £300.00 when buying something costing over £200 000.00? (if out of london). I really don't see how that will cause a slump.
james, london, uk
There was going to be a slump anyway don't blame it on H.I.P.s
Nick Dixon, Sutton Coldfield, England
When I bought my house, my surveyor said that it was energy inefficient. Did I care? No - it was the last thing I was bothered about. I cared about the road, transport links, the size of the property for the money, the neighbourhood, garden, proportions of rooms etc. The energy efficiency can mostly be fixed by the purchaser. And if not - just pay a bit more for your gas and electric - it didn't bother the last owner of your house, did it? So it can't be so very unaffordable for you. My gas and electric bills are quite high but I can live with it. A HIPS pack wouldn't have changed my mind.
Luci, London,
Ha ha ha ha,
And now the blame is on HIPS for the impending meltdown in house prices? Not greedy trough like ones....
What will they think of next?
It has of course got nothing to do with the fact that people have simply borrowed too much and those properties will go through the usual economic boom and bust cycle (no matter how much Mr. Brown, Prime Minister Unelect, tries to move the cycle).
Oh and Steven Blunt , the reason for duplication of work is that it is impossible to act for buyer and seller. This is called a conflict of interest which is something I wonder Estate Agents know much about (even if they regularly do play one off against the other).
Pete Balchin, Solicitor , Bristol, UK
I am an estate agent and I generally agree with the overall theory behind a HIP. The house buying process needs to be quicker and simpler but unfortunately the Government have really missed a trick. It will not speed anything up as most lenders do not trust the sellers coveyancing and are requesting the purchaser does their own, as it has always been. This is a wasteful duplication and I wonder how many tonnes of carbon are produced by this pointless duplication of work.
It will not stop people changing their mind or pulling out due to issues with a survey, as they scrapped one of the best ideas in there.
The EPC will be required under EU regulations, but this should be supplied seperately for less than £100. Trying to get the HIP through on the back of this is yet another Government ploy to push through an ill-planned and unnecessary policy.
As I said, I do agree with the theory but once again the Government has put money-making before common sense. Go back to the drawing board!
Steven Blunt, Ashford, Kent
As a Chartered Surveyor, I am pleased that the RICS has now wrested control of it its policy on HIPs from a group of its own members who supported HIPs for their own financial benefit. Now we we learn that the same groups have successfully lobbied inept New Labour.
HIPs are a waste of money and do nothing to address the uncertainties of house purchase in England. If the government had wanted to do that, it would have elbowed its useless civil servanyts out of the way, cancelled their worldwide 'fact finding' tours and driven to Edinburgh to see how stress free and certain house purchase can be.
The attendant Energy Performance Certificates are not about the environment as they bear no relation to the modest requiremnents of EU law but are to be used as a basis for taxation.
ian, bristol,
As a Conveyancer for over thirty years,the Hips will never work
in its present format.The burden of proof that the property, title
are in order has always been on the buyer not the seller.The only
requirement that is necessary is for the lender when issuing
a mortgage offer that it is conditional for an "Energy Performance
Certificate" to be produced on completion,and the seller to produce it with the contract for sale to the Buyers Solicitor.End of story.
Local Authority searches are only valid for a 2 month period!
Are sellers able a afford renewing searches every 2 months?
Eirian Williams, Llandysul,Ceredigion,
HIPs are a waste of time, another ludicrous policy brought in by the same government that has put the rights of murders above that of decent law abiding people. Its about time that the government started looking after the tax payer not making things more confusing and more expensive. Bring back Margret Thatcher.
John , London,
This is a typical Labour policy. It increases the burden on ordinary house-owners while creating beaurocratic jobs for the sort of people who read the Guardian. We do not need HIPS or any other such contrivance. Buying or selling a house is essentially a private transaction between vendor and purchaser and is no business of Government. Whoever thought up this ludicrous scheme?
Adrian Gilbert, Tonbridge,
It is an absolute nonsense to suggest that the HIP's will speed up house sales. If they really wanted to do that then with 'registered properties' in particular it could be made almost as easy as selling a car. All backed up some kind of insurance and survey. maybe.
Why don't they. Well they wouldn't wouldn't want to upset their rich buddies in the house selling racket would they. i.e. estate agents and solicitors.
I actually did my own conveyancing last time. Relatively easy on registered properties! Believe me you would be sickened by the fees charged for such a small amount of work. It's all basic clerical work that almost any literate clerk with a few 'O' levels could do. And those 'searches' that seem so mysterious; just standard forms sent off to various esablishments that come back with standard answers.
K Macca, Stourbridge, W. Mids
For good or ill the governent has to push ahead with HIPs because the core element, the Energy Performance Certificate, is required by Article 7 of EU Directive 2002/91/EC:
"Member States shall ensure that, when buildings are constructed, sold or rented out, an energy performance certificate is made available to the owner or by the owner to the prospective buyer or tenant, as the case might be."
Some 80 percent* of our new laws are now decided on this basis: EU treaty obligations incurred by ministers and civil servants, and requiring no more than the continuing acquiescence of our elected representatives in Parliament.
* On the reasonable assumption that our position is similar to that of Germany, where between 1998 and 2004 23,167 legal acts were adopted, of which 18,917 were of EU origin.
Denis Cooper, Maidenhead, England
RE: "I found it difficult to see how a reduction in supply would cause a 'slump'?"
This article was written by a journalist, not an economist.
Brian Cottager, Birmingham,
These packs are just another tax. I saw one of the inspectors on the news last night and didn't like the way he seemed to be looking forward to charging his captive audience for a service they don't want. If you give a group of people a monopoly on providing a "service" that homeowners will be forced to purchase it will inevitably attract the worst sort of predator who will abuse their position to maximise profits.
We have no choice in this matter so look forward to being treated in the same way that you are by obnoxious airport officials and town hall jobsworths.
The reports don't even tell you if the house is susceptible to flooding. Complete waste of money.
Simon , Chatham, Kent
Jeremy Leaf of RICS might also consider when claiming HIPs has caused a dramatic drop in the numbers of 4-bedroom houses coming on the market, other factors such as the holiday season and higher interest rates. He might be surprised to find that August is traditionally a quiet month for new instructions on all properties. When he returns to work in September he might also be surprised to find that Home Inspectors are taking away his traditional residential surveying business, providing buyers with Home Inspection Reports. At long last the RICS surveying monopoly has been broken and consumers can get an objective report from an accredited surveyor backed by government certified standards. And unlike a RICS surveyor, Home Inspectors are CRB checked, and continuously monitored.
Richard Oppe, Chichester, West Sussex
Can Dave and the boys commit themselves to repealing this nonsense or will they think this calls into question their 'green credentials'. Come on Dave get the government off our backs.
Ian Burgess, Bristol,
This government is a mendacious , self serving, mediocre bunch of cheats and morons, just like this new stealth tax they have cleverly thought up.
Lulu, Dorset,
When you buy a fridge or washing machine you get a features document. So why should this not be available for expensive homes. Also this is going to rightly show how energy inefficient the old homes are and the transparency will result in a reduced carbon footprint for the UK
P Negi, Surbiton,
I find it difficult to understand how £300 is such a problem when the sale nets more than £100,000's of pounds. What's the problem, the information has to be dug out anyway, better earlier than later when unnecessary money has been spent and the seller withdraws.
What is the problem????
a jansen, watford,
Does Baroness Andrews truly believe HIPS and EPCâs will save families âhundreds of pounds off their fuel billsâ?
Where does she think the thousands of pounds come from to bring houses up to the energy saving standards she expects? Not the Government, but the very families / home owners she professes to want to help.
Is it also her intention that a house sale CANNOT proceed without the house meeting a satisfactory energy saving standard. Ridiculous!
No doubt the Government will receive its 17.5% VAT plus a share of the profits earned by the surveyor/inspectors.
The only profiteer from this ill-conceived policy will, once again, be the Government.
No surprise there then!
Malcolm, Windsor, Berks
HIPs are not going to help speed up the conveyancing process. Yes, by all means let a buyer see title information etc but it willl not speed up the process. Many purchases are delayed because soem paperwork is not available, and until building societies stop telling their customers to throw their title deeds away because they're not needed then delays will happen.
And please when will this idiot government stop banging on that HIPs are anything to do with energy-saving etc - they're nothing to do with that. The EU directive has really got nothing to do with house selling and why they are linking the two together is beyond me. I know they will never be honest about anything but the EPC is a EU directive, and was never meant to be linked to house selling in the first place and the fact that when a report is made on a property and it can't be changed if it's wrong - that's the worrying factor! That's what should concern people.
S Foxcroft, MARKET HARBOROUGH, ENGLAND
Agree with Edwina Rigby entirely, another cash-cow and penny squeezing excercise by the govt The basis of this article, however, is complete nonsense and lacking of any economic rationale. £300 makes up a miniscule proportion of a houses value (less than 0.1% of the average 3-bed+ UK house). Even if supply were to drop off slightly due to the seller's reluctance to incur the cost of the HIPS, prices would be forced upwards not downwards, AND sellers will discretely look to pass this small cost on to the buyer intp the purchase price. Overall, no rationale to the argument at all. Is this what they call "experts" in this country?
Tom Baker, London, UK
The extra work for professionals ancillary to the property industry could certainly help smooth any transition from
a robust sellers market to a moribund buyers market, if that is a future outcome of changes to the financial environment.
dr venables preller, Warminster, UK
Providing clear information to buyers makes the market more efficient and saves people time and money when moving house. The alleged reduction in four-bedroom houses coming onto the market is caused by people redefining their houses as "three bedrooms plus large study". Once three-bedroom houses are included in the rules, four-bedroom houses will re-appear.
Andrew Montgomery, Oxford, UK
This is yet another useless quango thought up by some upper class layabout to provide a well paid part time job for friends and the government fell for it. Where were these cushy numbers advertised?. I sincerely hope that the Tories will abolish it when they get in power.
gordon, macclesfield,
Opposition to HIPs and if the Tory abolishes Inheritance, they might look a reasonable again. This silly HIPs will conribute to Labour's and Brown's downfall.
george, london, uk
Now the estate agents have an excuse for a drop in the housing market instead of looking at their overpricing of properties!!
Tony Brown, london,
Hips are good, as it prevents vendors from placing property
on the market that isn,t really for sale.
After all , we usually go with the lender that gives the highest
valuation. New property coming on always makes the old
stale overpriced property look better value.
mark, Bedford,
the whitehall " good ideas club" strike again
guy, hamburg, germany
Without meaning malice against the newly trained 'inspectors' I would suggest that if we the public are so against HIPS then we defer selling our properties for a few months and see wre that leads to!
Maybe its about time that we the public started to re-assert our rights to be heard and have a say in how this country is run. This is another example of needless bureaucracy from a government that chooses not to listen.
Tony Southamtpon, Southampton, UK
The correction is coming anyway. This is just a potential excuse. There is no shortage of supply, just overpriced low quality boxes and that is what will disappear from the market to begin with. It's all about sentiment and that is on the turn.
Guy, salisbury, England
Another bloody scandalous rip off by a mendacious and grasping Government. why don't they just confiscate our property and put us all in concentration camps?
Edwina Rigby, Blackburn, England
The system of selling houses in this country is generally very tedious and cumbersome. The government would have been far better to look at the processes of selling in general.
sylvia dean, Barnstaple,
if it puts estate agents on the dole fair play
david james, gosport, uk
I found it difficult to see how a reduction in supply would cause a 'slump'?
mike, oxford, england