Repeal HIPs and return to the drawing board Print E-mail
Sunday, 20 August 2006
Peter Bolton King, Chief Executive at the National Association of Estate Agents, is calling on the Government to abolish the introduction of Home Information Packs (HIPs) by repealing part 5 of the Housing Act. He calls on the Government to recognise that what is left of HIPs is unworkable now the Home Condition Report (HCR) is not mandatory, and work with the Association to find other ways of improving the property buying and selling process.

He recommends all aspects of HIPs apart from the energy rating certificate, which is a requirement of European legislation, should be revoked.

Peter Bolton King comments: Whatever anyone might think about the whole concept of HIPs, it is nonsense to make only part voluntary. The majority of the remaining compulsory documents are, at best, often unnecessary before a sale is agreed and, at worst, unintelligible without legal interpretation or likely to become out of date.

In any case the advent of quick E Conveyancing removes much of the need for the legal part of a HIP anyway. The Government should now take the bull by the horns and make the decision to repeal the introduction of HIPs and return to the drawing board.

The Association remains totally committed to work with Government to improve the buying and selling process for the benefit of consumers. I would again ask the Government to sit down with us and consider how this can be achieved.

The Associations full report follows:

NAEA calls on Government to repeal all elements of HIPs, other than energy rating, and go back to the drawing board.

Following the Government's change of plans with regard to Home Information Packs, the NAEA has now had an opportunity to consider the situation further.

The decision to postpone the mandatory introduction of the Home Condition report is to be welcomed given the real ongoing concerns over the lack of Home Inspectors, the overall lack of readiness and the potential effect on the market and economy.
This leaves a proposal to have a voluntary Home Condition Report (HCR) and a compulsory reduced HIP with an Energy Rating and other documents such as leases, searches, land registry documents etc. Along with many other parts of the industry, including some of the major surveying firms, we do not believe that the majority of the public will be prepared to pay for a voluntary HCR.
It is suggested by Government that as consumers will have to still pay for an Energy Rating Certificate, they will also be prepared to pay a relatively small extra amount for the full HCR. We however believe that the likely costs being quoted for the Energy Rating are too high and in reality the gap between this and a full HCR is much larger. This will deter consumers from having anything more than the bare minimum required.
We note that the Government reserve the right to revert to a mandatory HCR should the industry not be successful in implementing it on a voluntary basis. However without the support of the existing network of surveyors and considerably more Home Inspectors, this will prove impossible to achieve. It is difficult to believe that, future potential inspectors will take the risk that the Government will not change their mind again. There is already clear evidence of individuals and firms changing their policy regarding the training of additional Home Inspectors.
The Government's decision does now raise a big question. The NAEA have always believed that the way that HIPs were to be introduced was not the way to improve the home buying and selling process. However, without a compulsory Home Condition Report one has to seriously question whether the rest of the HIP, other than the energy rating, is worthwhile.

With no contract, and no legal summary, the remaining documents in the HIP were always going to be difficult for the consumer to understand. The Government's stated reason for bringing in HIPS was that if potential purchasers were armed with all the information fewer sales would fall through. However there is little evidence that sales fall through because of legal, title or search problems and as such there is absolutely no need to insist on this information being made available prior to a sale being agreed. In any case, the speed of conveyancing will shortly be improved by the introduction of E Conveyancing and the Land Registry's Chain Matrix system again negating the need for information up front. There is no point in having information that may well become out of date during the period of sale thus causing additional unnecessary expense to the consumer.

This leaves the question of the EU requirement for an energy rating certificate. The Government must now urgently agree with Industry who will be carrying out the compulsory energy rating check. This is shortly to be expanded to cover not only houses being sold but also those being rented and commercial properties. The Association supports the idea that there should be a separate stand-alone qualification to cover this and will work with Government to hopefully rapidly bring this about. Qualified Home Inspectors will not be interested in spending their lives doing just this. We believe that the requirement can easily be achieved via accredited Estate Agents at the time they are placing a house on the market.
Bearing this in mind the Association calls on the Government to accept that what is left of HIPs is now unworkable and to work with us to find the many other ways available to improve the property buying and selling process.
The Government should now accept the situation and immediately take steps to repeal Part 5 of the Housing Act.

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