HIP’s – result of debate in House of Lords

Dear Supporters

The House of Lords debate took place last night. For the government, Baroness Andrews sounded distinctly uncomfortable – as one might, defending the indefensible. She trotted out much of the same information we have heard so many times before but also confirmed the subsidies that will be paid to participants in the ‘Dry Run’. She also stated that trainee Home Inspectors will be not paid compensation.

There is no doubt that the government is heading for a fall with the ‘Dry Run’ as it simply will not test the pack under the circumstances that would prevail in a mandatory environment.

SPLINTA received an honourable ‘mention in dispatches’.

The following is the text of a press release we have issued this morning. Please circulate to your media contacts.

HIP DRY ‘A WASTE OF TAXPAYERS’ MONEY’.

In a House of Lords debate on 11th October, the government confirmed that £4 million of tax payer’s money is to be spent subsidising a ‘dry run’ of the discredited Home Information Pack (HIP) prior to its introduction in June 2007.

Government spokeswoman, Baroness Andrews stated: “Money will be used for communication and advertising, and we will be offering incentives in the form of a limited number of free packs as well as packs in which the mandatory element will be provided to the seller free of charge, leaving them free to pay for the HCR, and packs provided on a no-sale, no-fee basis.”

This subsidy calls into question the objectivity and validity of the dry run.

Nick Salmon FNAEA, head of the anti-pack campaign group, SPLINTA (Sellers Pack Law is not the Answer) said: “We question why tax payer money is being spent to subsidise private sale transactions. This subsidised voluntary trial of the HIP cannot accurately reflect the circumstances that would exist when the pack is made mandatory and giving away free packs will skew the trial results. It is a waste of taxpayers’ money. The government is about to repeat the error it made in a similar trial in Bristol five years ago. Despite assurances that the dry run results will be independently assessed we are very concerned that a commercial organisation representing the firms that stand to make money from the packs is running this trial. We would advise estate agents and sellers to steer well clear of it.”

SPLINTA has proposed modification to the HIP that would remove the need for the dry run and make the scheme practical and cost-effective for the industry and consumers. The Energy Efficiency Report (required under an E.U. Directive) would be made a voluntary document during the marketing of a property and only become mandatory at exchange of contracts. Agents and private sellers commissioning a HIP would receive a certificate from the pack provider stating that the order had been placed. In this way there would be no delay in commencing marketing (under the current regulations there could be a wait of up to 14 days while the pack is prepared) and sellers would not be forced to incur the cost of the Energy Report before a buyer had been found.

Nick Salmon said:  “We commend these changes to the government as they will allow the free market to continue to operate, reduce bureaucracy, and cause the least inconvenience and cost to consumers.”

The office

Just had to nip into in Staples in Newport, saw one of those “Executive Chairs” for sale – it immediately transported back to my previous “life” within Barclays Bank some twenty years ago – at that time It was only managers who were allowed chairs with arms, everyone else had to have ordinary chairs – How petty these big organizations used to be! – The office cat has just occupied the chair I was just sitting on (it hasn’t got any arms).

The engineer didn’t arrive to fix the printers yesterday – they forgot it would take a ferry trip to get here – now due on Wednesday.

At last over the last two weeks winter has arrived – sunny days & freezing nights.

With the full moon last night it was an ideal night for the Fireworks, we saw them at Arreton Barns, good show & a good crowd.
At work we are always busy, but on Saturday it was the quietest day for a long time. Busy again today though! We have so many houses agreed or sold that we are starting to get a bit short – judging by the way the other agents are advertising it seems they are in much the same situation. I don’t know if you know but there are 67 different estate agency offices on the Island, a lot of competition, that’s why I am so glad we are so very different.
Still awaiting an engineer to arrive today to fix one of the printers!

Home Information Packs (HIPs) – Press release from SPLINTA

From what I am hearing there is some confusion over the current state of play with HIPs and so I thought it would be useful for everyone if I summarise the position.

What is the law?

As the law currently stands, in June 2007 the mandatory HIP will come into force. It will contain the Energy Performance Certificate (EPC), with an energy rating designation (graded A-G) plus legal documentation including basic Searches, replies to preliminary enquiries, copy of the lease, service charge accounts, etc. The Home Condition Report will be a voluntary document, included if the client asks for it – and is presumably willing to accept liability for the cost.

Anyone can produce the legal documentation part of the pack but the EPC will have to be done by a qualified, accredited and insured person. Currently that will mean someone who is a Home Inspector (also qualified to produce the HCR) but in the coming months there will be a means of qualifying as a standalone Energy Performance Inspector (or similar title). This may well appeal to estate agents who wish to offer the EPC as part of their service.

Marketing, or any intimation to a potential buyer that a property is about to come up for sale, is not allowed unless the HIP is in place but if any required document for the HIP cannot be obtained within 14 days the marketing may commence, provided that a note of the missing document is in the pack and that efforts to get it continue. Clearly leasehold properties will be at a disadvantage as we wait for managing agents to respond with service charge information.

How should your firm proceed?

Firms have three main options. Do the work ‘in-house’; form alliances with local solicitor/conveyancers and surveyors/home inspectors; contract out all the work to a pack provider. It seems likely that the second and third options will be most widespread.

There are at least 140 firms acting as pack providers but there are already signs that this number will reduce over time via consolidation and merger. Some will provide ‘white label’ packs which can be branded with your own corporate identity. It remains our advice that no firm should sign up with any pack provider until much nearer June, when we shall have seen what other amendments are made to HIPs by government.

In the meantime there is no contradiction to your anti-HIPs stance in assessing a variety of pack providers, nor in sending staff on HIP handling courses (run by the NAEA).

Costs.

What you should be thinking about is how the pack will be funded. Will you absorb the cost (likely to be in the order of £500 – £750 on average, without an HCR)? Will you have a pack provider contract directly with your client? Will you bear the cost and charge the client  at completion? Be aware that there are implications regarding FSA rules if you start getting involved in credit agreements. Do you want to ‘own’ the pack to preserve a sole agency? There’s no right or wrong answer to these questions and in most cases the answer lies in commercial common-sense and what your competitors do.

What may change before June 2007?

A number of leading stakeholder groups are now openly saying that the ‘Half-HIP’ is not worth having and that government should go back to the drawing board. Whatever government may say publicly there is no doubt that they are under pressure over HIPs. It is now all about ‘green issues’ and very little to do with real improvement to the home buying process. A large question mark hangs over just how many Home Inspectors are really in the process of qualifying. The latest figure says 470 are qualified (but not yet accredited) but no-one seems to know how many of the alleged 4,000 registered to train are actually pursuing the courses. If there is a shortfall next June the launch will be delayed.

The AHIPP trials (which the government are supporting with £4 million pounds of our money) are really a gradual roll-out of HIPs to avoid a Big Bang in June 2007. When I asked AHIPP last week for the criteria that are being measured in the trials, they were unable to give any information. The media are alert to this and are generally highly sceptical of them. Few believe that a commercial organisation representing pack providers can deliver an objective study of the pack. The assurances that the results (what results, if they don’t know what they are measuring?!) will be ‘independently assessed’ gives no comfort.

SPLINTA is pressing government to make the EPC a voluntary document during marketing, becoming mandatory at exchange of contracts. There must be no impediment to First Day Marketing, which may mean that an agent could comply with the law by receiving an electronic certificate from a solicitor/conveyancer or pack provider to prove that a HIP has been commissioned.

These changes will happen if we apply the right pressure in the right places – and you can be certain that we are be doing just that.

I hope these notes are of help but please contact me if you need further information.

Kind regards

Nick Salmon FNAEA

Link to a Dr’s blog

Link to a Dr’s blog
Medecins Sans Frontieres
1) If you have heard of them & not sure what they do – “MSF is an independent medical aid agency committed to two objectives: providing medical aid wherever needed, regardless of race, religion, politics and sex; and raising awareness of the plight of the people we help”. 4-MPD is most dangerous drug in the world.

2) If you don’t know where Central African Republic (CAR) for a google map click here use the “Back” arrow button to get back

3) I came across the blog of one of the Dr’s (Dr A Goenka) in a remote spot in The Central African Republic. He only gets to update his blog every few weeks – telling you about the daily life in this war torn country, it makes our lives seem rather insignificant/easy – click here for the blog – use the “Back” arrow button to get back.
(MSF is one of the charities we sponsor)