Six and out
What did for HIPs? As the Government backtracks fast, Ross Clark spells out how it’s all gone horribly wrong…
It began with a promising sentence in the Labour Party Manifesto of 1997: “We are consulting on the best way of tackling the problems of gazumping in the interests of responsible homebuyers and sellers.” By last Tuesday, when Communities Secretary Ruth Kelly announced that the introduction of Home Information Packs (HIPs) will be put back from June 1 to August 1, and only apply to properties with four or more bedrooms until further notice, that simple pledge had evolved into a chaotic and hugely unpopular piece of legislation that promised to do exactly the opposite of what it originally promised: it threatened to slow down the buying and selling process and make gazumping all the more likely. 2Judicial
review Few government policies have succeeded in humiliating ministers as effectively as HIPs have done. This week’s announcement was the second climbdown: last July Ms Kelly was forced to postpone indefinitely plans for HIPs to include a Home Condition Report, or mini survey. But, in truth, the Government had little choice but to postpone HIPs. The Royal Institution of Chartered Surveyors (RICS) is so concerned by the implications for the housing market that it has forced a judicial review on Energy Performance Certificates (EPCs), the most controversial element of HIPs. A week ago, it won an interim order, forcing the Government to delay the legislation while the judicial review is considered. 3Energy
assessors It was becoming increasingly clear to the Department for Communities and Local Government that there would be insufficient “energy assessors’’ accredited before June 1 to ensure that all house-sellers would be able to obtain an EPC. According to the RICS, 4,000 energy assessors would have been needed: and yet Ruth Kelly last week admitted that a mere 520 have so far been accredited.
How many of the 3,200 assessors who have passed their exams and the 2,500 currently training will hang around is an open question. If potential assessors are turned away from what had promised to be a lucrative career, there is no guarantee that there will ever be enough to make HIPs run smoothly. The Government has not set a date at which it hopes to extend HIPs to properties of three bedrooms and fewer – and has given up, for the moment, even mentioning Home Condition Reports. 4Strength
of opposition The Government’s embarrassment over HIPs has certainly been no victory for the Conservatives who, eager not to undermine their green credentials, have avoided criticism of EPCs, and confined themselves to rather vague objections to HIPs. Rather, it is a triumph for the professional bodies that have been consistently critical of the plans over a number of years. When chartered surveyors were first invited by the Government to help develop HIPs in the late 1990s, it may have seemed as if they would treat it as a huge job-creation scheme. Yet the clearer the plans became, the more concerned the RICS became, culminating in its judicial review.
The National Association of Estate Agents opposed HIPs on the grounds that they would interfere with the property market – in particular, dissuade the 20 per cent of sellers which it says market their properties “speculatively’’, and don’t finally decide to move until they receive an offer on their home. The Council of Mortgage Lenders, meanwhile, repeatedly warned that its members would not accept Home Condition Reports, and would continue to insist on carrying out their own valuations before making mortgage offers. This fatally undermined the original purpose of HIPs: to speed up the house-buying process. 5Wobbly
purpose During the long incubation of HIPs, their stated purpose has subtly changed. There is much less talk now of speeding up the home-buying process and rather more about improving energy efficiency – through EPCs, which grade homes like fridges into bands A to G according to their energy consumption and are supposed to contain useful advice for homebuyers on how to save money.
Thanks to an EU directive, the Government is obliged to set up a system for assessing homes for energy efficiency. But there was no obligation for the Government to incorporate this into HIPs. 6Energy
Performance Certificates (EPCs) Evidence has emerged that EPCs in their current manifestation are of little use when it comes to period properties. Older houses assessed for more than one EPC have produced wildly differing results. The result you get depends on the assumptions an assessor puts in, which is why one supposedly standardised procedure gives very different results.
Utter rubbish: Clark puts the paperwork where it belongs