|Trevor Kent 9th
must be terminated, but don't just take my word for it (despite the fact
my word's been consistent since 1997 on this subject) no, read the
recent comments by two very august bodies - The
Council of Mortgage Lenders and the Royal
Institution of Chartered Surveyors . Then write to
your Labour MP and say 'forget my vote, I'm not paying £500 for an
Energy Inspector to nose round my home before you give me
permission to put my house on the market'. Or write to your Conservative
MP and say 'thanks for pledging to repeal HIPs because you know they're
rubbish, my vote's yours come the election'.
|Trevor Kent 6th
government are indeed launching their 'dry-run' of Home Information
Packs this week through a joint initiative from the
Department for Communities and Local Government (the old ODPM) and
their Association of Home Information Pack Providers (AHIPP). "Despite
the fact that the intended roll-out of mandatory HIPs will cover the
whole of England and Wales from June 2007," says Trevor Kent
former president of The National Association of Estate Agents,
" only six relatively prosperous towns in England have been
selected, and even in these only a few convenient postcodes have
been identified for trial".
last week Trevor Kent attended the 'launch' meeting intended to
attract support for the dry run at one venue - Northampton.
"nearly two hundred attendees accepted the government's wine and
finger buffet as far as I could see," he said, " but
all but a handful appeared to be HIP providers, Home
Inspectors (the new surveyors who will visit every home to draw up
the HIP) and conveyancers - all potential big earners
from HIPs". Only a dozen or so estate agents, whom the DCLG were are
relying on to serve up the guinea pig sellers on a
plate, identified themselves at the meeting. "Agents will not
co-operate with the government in a trial
of what they believe to be nonsense legislation" Trevor Kent
observes, "especially when they've already seen one climb-down
with the withdrawal of Home Condition Reports from the Packs, there is
just no trust whatever left in the DCLG to do a
seeking to monitor the progress of the dry runs can contact
Chris O'Dea 020 7944 4400 ext 19511 at the DCLG for Cambridge and
Huddersfield, Maxine Walker extension 19342 for Newcastle and
Northampton, and Tracey Hayworth on 020 7944 3646 for Bath and
Southampton. Pertinent questions might be on the lines of "even
when they're free how many prospective sellers have accepted
a HIP on their home?", another enquiry continues
Trevor Kent might be "are the prospective buyers even
bothering to read the reports before offering on the houses they
fancy?". The final stab that might just herald the end of
Home Information Packs could just be to ask en passant, "do
you think, in the light of your trial run experiences, that 3m people
a year will spend £500 a time on a HIP and wait three weeks off the
market whilst it's being prepared ?". Armed with
the answers from the poor old foot soldiers charged with
implementation in the field, a final foray with their Commander in
Chief Yvette Cooper might just elicit the response so many millions
are pleading for, the white flag of surrender before more blood is
020 7984 8121
020 7984 8100
Packs so unpopular, Labour is giving them away (and you pay)
million of taxpayers’ money being spent to ‘save Ministers’
Government is today launching a “dry run” of the
controversial Home Information Packs in six locations across
England . The Packs, in a slimmed down form, will be
compulsory from June 2007. Sellers face repeated £200 fines
for trying to market or sell their home without a Pack.
today Conservatives are today exposing:
Government is spending £4 million of taxpayers’ money to
provide “incentives” for the consumers to use Packs.
all of the six trials, home owners are being offered a free
pack, paid for by the taxpayer.
contrast, from June, home owners will face a £500+ fee to buy
a Pack. The Government has refused to say how much the new ‘half-HIPs’
will cost including VAT.
trial is entirely voluntary. But from June, home owners will
be fined £200 by town hall officers for trying to sell their
home without a pack. The fine will be repeated for continuing
Spelman, Shadow Local Government Secretary, said:
so-called dry run is a sham. The controversial Home
Information Packs are so unpopular that the Government is
having to give them away – with the taxpayer left footing
the bill. In no way will a free trial provide a proper model
for the potentially damaging effects to the housing market of
these flawed Packs. The Labour Government is simply wasting
£4 million of taxpayer’s money to save Ministers’ faces.”
MILLION ON GIVING AWAY HOME INFORMATION PACKS
Pickles: To ask the Secretary of State for Communities and
Local Government in what ways sellers will be encouraged to
take up voluntary home information packs during the dry run.
Cooper: Home information packs (HIPs) will be promoted by
participating estate agents and local information campaigns.
To get the trials going and to test the HIPs, there will be a
limited number of free packs and reduced cost packs, for
sellers who want to try them out, as well as full cost packs.”
31 October 2006, col. 278W.
Cooper: We will promote the voluntary take-up of HCRs, and
have allocated £4 million to support their take-up and
testing of home information packs.”
16 October 2006, col. 1027W.
OF THE PACKS FROM JUNE
Government has refused to say how much the new 'half' HIPs
will cost. Previously, they estimated £600 - £700 + VAT for
a HIP including the Home Condition Report (HCR). The HCR was
to cost £300. Without the HCR, an Energy Performance
Certificate will still have to be paid for. This suggests a
price of £500-£600 including VAT.
refuses to say how much they will cost…
Gove: To ask the Chancellor of the Exchequer whether VAT will
be levied on (a) all and (b) some of the items
within home information packs.
Primarolo: The extent to which VAT will be payable on the
costs incurred by a prospective house seller in compiling a
home information pack will depend on what is included in the
pack, and on how the person chooses to compile it. It has not
yet been finally determined by the Department for Communities
and Local Government what the full contents of a pack will
comprise, pending evaluation of the ‘dry run’.
10 October 2006, col. 726W
Gove: To ask the Secretary of State for Communities and Local
Government what the cost of an energy performance certificate
is expected to be including VAT; and whether the cost is
expected to vary according to the size of the property.
Cooper: The price of an energy performance certificate will be
set by the market and not by Government. We expect these costs
to vary according to the size, type and location of the
property. Trials are planned to take place during November
2006 to assess the indicative time and costs of producing
energy performance certificates.”
16 October 2006, col. 1026W.
FINES FROM JUNE
Pickles: To ask the Secretary of State for Communities and
Local Government pursuant to the answer to the hon. Member for
Meriden (Mrs. Spelman) of 2 October 2006, Official
Report, column 2535W, on home information packs, what period
of time must elapse before a vendor could be fined £200 again
for an on-going breach.
Cooper: Where enforcement officers decide to take action
following a breach of the home information pack duties, they
will have the option of serving a penalty charge notice. The
penalty charge is set at £200 in the Home Information Pack
Regulations 2006. It will be for Trading Standards Officers to
make the appropriate judgment regarding enforcement of the
24 October 2006, col. 1793W.
AREAS - WITH THE FREE PACKS
6 November 2006, the Government, in partnership with industry,
is rolling out area trials in six areas, Bath , Cambridge ,
Huddersfield, Newcastle , Northampton and Southampton , aimed
to help test both the Packs and full Home Condition Reports.”
with properties in the BA1-BA3, BS31, BS39 and BS40 postcode
areas will be eligible to benefit from a Government funded
incentive. The current incentive is a FREE Home Information
with properties in the CB1-CB5 postcode areas will be eligible
to benefit from a Government funded incentive. The current
incentive is a FREE Home Information Pack.”
with properties in the HD1-HD9 postcode areas will be eligible
to benefit from a Government funded incentive. The current
incentive is a FREE Home Information Pack.”
with properties in the CB1-CB5 postcode areas will be eligible
to benefit from a Government funded incentive. The current
incentive is a FREE Home Information Pack.”
with properties in the NN1-NN5, NN8 and NN9 postcode areas
will be eligible to benefit from a Government funded
incentive. The current incentive is a FREE Home Information
with properties in the SO14-SO19 postcode areas will be
eligible to benefit from a Government funded incentive. The
current incentive is a FREE Home Information Pack.”
|Trevor Kent 26th
WE TOLD YOU
SO MINISTER, AND THE FIVE BEFORE YOU
The welcome recent call from the Council
of Mortgage Lenders (a body that both Mr Blair and Mr Brown DO sometimes
take notice of) to abandon Home Information Packs is timely indeed,
but will it be heeded?
It had been immediately preceded by a Royal Institution of Chartered Surveyors claim
that the introduction of Packs by the government must be
halted, a view supported by the Conservative Party. The National
Association of Estate Agents and individual commentators such as I have,
of course, been brave enough to say this for years.
The Department of Communities and Local
Government had recently disbanded their own Stakeholder
Group of industry 'advisors' , no doubt because the DCLG could no
longer stomach further 'drop HIP advice' from
professionals who understand the property market, advice hitherto
so distainfully ignored
The department's own official so
called 'Dry Runs' planned to test HIP implementation in six
English towns in the first week of November, appear doomed
before they begin with estate agents refusing their support.
The final nail in the hoped for coffin
for HIPs was an admission on 23 October by the
DCLG that their own MORI/BRE Baseline Study of 3000 estate
agents' sales in May and June had been a fiasco with participants
'only in the hundreds'. Thus legislators will not have their
required reliable picture of the market prior to HIPs to
judge whether the packs had improved the transaction
experience after introduction in June 2007.
Someone in government ( perhaps Housing
Minister number six) needs to take this dying initiative by the scruff
of the neck and put it down as quickly and
humanely as possible, before further millions are wasted. It
will, of course, be too late for private individuals who have, in some
cases, sunk their life savings into preparing to be HIP
surveyors. They have already suffered from the political
incompetence and business naivety of a totally discredited
government , it will be the public's turn next, unless Home
Information Packs are quickly consigned the the Graveyard of
failed Labour initiatives - that's if there's still room for the
11th October 2006
A few hours in advance of the House of Lords
debate on Home Information Packs (Wednesday 11th October 2006) I was able to advise the Conservative
team critical of the policy, lead by Michael Gove MP in the Commons and
Baroness Hanham in the Lords, that I believe a recent 'Baseline Study' of the property market ordered by the
Deputy PM has been a failure.
On 21st April 2006 Kevin Roper of the ODPM
wrote to 3000 estate agents inviting them to assist in research to
'evaluate the current buying and selling process of homes in
England and Wales'. He claimed that the 'aim is to provide a benchmark
against which to measure the impact of the national roll-out of Home
Agents were asked to fill in a brief
transaction form for each property that completed, or was withdrawn from
sale, between 15th May and 9th June 2006. They were also asked to
'fill in a feedback form at the end of the study'. Alex Chester at
the Building Research Establishment was offered as the query point
and MORI was said, by Mr Roper, also to be involved in the study.
As a long-term critic of the proposed
introduction of Home Information Packs, I was naturally keen to learn of
the progress of the creation of this 'Baseline'. Over the
last month I have attempted to get progress reports from every party involved
- but to no avail. No one in government, the BRE or MORI would talk
In desperation I had letters published in
Estate Agency magazines asking agents to let me know how they got
on with their participation LINK
The readership is collectively about 15000 agents. To date I have
had no letters from agents advising me that they had been involved.
I strongly believe that the Office of the
Deputy Prime Minister (now the Department for Communities and
Local Government) must have quietly withdrawn the study to save
embarrassment. Yet, at the same time, they fanfare their
investment of £4m to enable a group of commercial companies (already
standing by to make millions out of the introduction of Packs) perform a
'dry run' of HIPs for them. Theirs is sure to be an objective
Home Information Packs are a disaster in the
making, criticized on every hand by property professionals in every
discipline of the industry. Yet, Labour ploughs on
and without the help of the House of Lords
LINK TO DEBATE and other critics
such as I, 3m people a year will be soon be paying an
average of £500 to put their homes on the market from June 1 next
year. This legislation must be repealed forthwith.
21st September 2006
HIP's BROKEN - DON'T MEND IT
Home Information Pack was invented in 1997 by Labour to apparently cure
ills in the house sales market. They
suggested that 3m homeowners a year would be happy to pay for a survey to
be done on their home, searches collected, energy efficiency checked,
title deeds inspected and all this information given to anyone who wanted
it (at a cost to the seller of £1000). The Government also
believed that these sellers would be happy to be fined £200 a day if they
tried to nail a For Sale board up before they had bought their 'Pack'. Fat
and commentators assumed, following the Housing Minister's announcement on July
18th, that HIPs were no more.
This is still far from the case.
The DCLG have dropped the need for the 'survey' to be included in
the Pack but still insist the rest of the rubbish will have to be produced
by sellers on and after 1 June 2007.
implementation, the Government is committed to evaluating a so-called
'dry run' to assess whether the Packs will work for the public. Today they
have announced a £4m subsidy will be given to a group of
companies already set up to make a business of producing HIP reports. They
seriously expect these companies, who stand to make millions when HIPs are
finally introduced, to report in an unbiased fashion on how HIPs
plan brings to mind MORI being asked to enquire of 1000 turkeys whether
they think a plan to abandon Christmas would be a good idea" says
are no surveyors to prepare the Energy Performance Certificates, there are
no buyers who will be interested in reading their reports,
and their solicitors will not wish to rely on old searches provided
in the Pack.
“Frankly the HIP is, and always has been a complete farce - a
total waste of money and likely to cause house-price inflation” says
Trevor Kent, former president of the National Association of Estate
profession involved in house sales has called on the Government to abandon
HIPs, yet they plough on regardless.
This is breathtaking arrogance, a true 'we known your business
better that you do attitude' and, after today's announcement, a case of
'we'll put your money where our mouth is to prove it', as well."
HIP business”, concludes Trevor Kent, “just has to be stopped and my
guess is that the penny will only drop when the Government discovers that
the public will not allow themselves to be part of this dry-run - EVEN
WHEN THEIR HIPS ARE PROVIDED FREE'.
Kent is former president of the National Association of Estate Agents
and has been a fervent anti-HIP campaigner through the reigns of five
Housing Ministers. He is still an independent single office estate agent
and regularly broadcasts on property .
OFFICE OF FAIR
consumer protection in door-to-door sales
OFT today welcomed the Government's announcement that it will legislate
to provide cooling-off periods on goods and
services sold to people in their homes, even when the sales
representatives have been invited to visit.
the law stands consumers have the right to cancel within a seven day
period when a sales visit is unsolicited, but an OFT
study found that 94 per cent of consumers were unaware of these
cancellation rights. Under the new proposals consumers
will also have the same protection when buying goods from representatives
irrespective of whether they have been
formally invited into their home.
changes will complement the forthcoming 'Unfair Commercial Practices'
legislation which will take positive action on aggressive
sales techniques used by representatives. This includes pressurizing
consumers into buying a product or service,
by outstaying their welcome in consumers' homes, or falsely claiming they
will get a better deal if they sign up immediately
to prevent them from buying elsewhere. Jonathan May, Director at the
protection in this way means that consumers shopping from home can be
confident that they are protected from
unscrupulous doorstep sellers.' More information and advice on doorstep
selling can be found by downloading the
leaflet at www.oft.gov.uk
statistical summary of the responses to the Doorstep selling consultation
has been published. For a statistical summary
of responses to the doorstep selling consultation can be found on the DTI
website - www.dti.gov.uk MEDIA enquiries:
020 7211+ Corinne Gladstone 8899 Terence Gibbons 8900 Lara Gorman 8133
Nick Spears 8901 Jonathan Marciano
Out of hours:
mobile: 07774 134814 fax messages: 020 7211 8961
press notices: Ext. 8993
enquiries: 0845 7224499 firstname.lastname@example.org
and consumer information leaflets are available free from:
Issued by :
OFT Press Office
SHOULD BE ALLOWED TO SINK WITHOUT TRACE
misapprehension to believe HOME INFORMATION PACKS are no more since the
government announced that the 'survey' element would no longer be a
constituent part. HIPS are, at the moment, still to be introduced for
home sellers from June 1 2007 in their reduced form.
has, however, been unleashed on HIPs today which will hole the already
creaking hulk below the waterline, and it's come from friendly fire.
agents and Home Information Pack Providers are still bound by
law to take an average of £500 off every intending house seller 14
days in advance of marketing in order to prepare the 'reduced HIP'. Many
will sign up the sellers on their first visit to the home for sale
when 'measuring up and advising on price'. If the sellers cannot pay cash
for their HIP, a finance agreement will be offered.
The DTI has
today announced that it is to legislate that all occupiers will soon be
entitled to a 'cooling -off period' of 7 days during which time they
will have the right to cancel any goods and services sold to them in
their homes by invitation. The OFT confirmed today this will include those
sales people selling mandatory HIPs. Thus 'Home
Inspectors' will now have to wait another seven days, for a
possible cancellation, before beginning to prepare the Pack.
is that, thanks to one department of government not knowing what another is
up to, even more potential chaos now reigns for home sellers and
those who advise them. Trevor Kent, former president of the National
Association of Estate Agents and a critic of HIPs since 1997 when they
were first proposed, is exasperated by this latest news, "can anyone
seriously suggest that Home Information Pack Legislation can be
allowed to continue, when a home seller will now have to wait three weeks
before being allowed to market their home, and become law-breakers with a
£200 per day fine if they jump the gun and nail a For Sale sign up before
their Pack is ready?". Trevor added "Maybe the
DTI and the OFT already know 'reduced HIPs' are still a
nonsense and, perhaps, they are trying to tell Mesdames
Ruth Kelly and Yvette Cooper at the DCLG so. I only hope they're
listening. They must grasp the nettle and consign HIPs to the
deep without further delay, before they themselves sink into oblivion as a
direct result of this blind folly ".
is a former President of the National Association of Estate Agents. He
has laboured tirelessly and without remuneration or vested interest (other
than being an estate agent) to warn the public of the perils of Home
Information Pack implementation.
WHAT NEXT? If
professionals and the public are rejoicing in the belief
that HOME INFORMATION PACKS (HIPs) ARE NO MORE following the Minister's
announcement printed beneath, then they are under a serious misapprehension.
THE FACTS What the
government has said (unless there is a further U-turn) is that HIPs
will still be mandatory on 1st June 2007, but that sellers will
not, at the moment, be forced to pay for and include the 'survey'
element known as The Home Condition Report. Sellers
will, however, still be required by law to buy Searches and pay for a
surveyor to visit their homes to prepare a Energy
THE COST? What sellers
will still have to pay for this newly proposed 'reduced HIP' will depend
upon the size, age and complexity of their homes, together with the cost
of Searches for their area (which vary greatly by region). A HIP
provider will also have to have sight of their Title Deeds and have
an Energy Surveyor close at hand to keep travelling charges down.
It is quite possible a 'Reduced HIP' for an average 3 bedroom semi will
cost £350 + VAT. A South of England 4 bedroom commuter home
could cost £700, a luxury home nearer £1000, and you've
still paid even if you don't sell.
THE LAW? It is not yet
clear whether the public and/or estate agents will still be liable to a
£200 a day fine if they don't buy a 'Reduced HIP' when a property goes
on the market (Yvette Cooper the Housing Minister had certainly planned
this to be the case with the 'Original HIPs' ).
USEFULNESS OF 'REDUCED HIPs'?
The Consumers Association, the only body to have supported HIPs from
their dastardly conception on a table in 1998 by John Prescott, now say
of mandatory 'Reduced HIPs', they are a "half-baked compromise
...... little value but of real expense to consumers and WHICH? cannot
therefore continue to provide support." Michael Gove, the
Conservative Shadow Housing Minister, has called for "Government to
abandon the whole scheme". Buyers will not be interested in
the 'thermal efficiency' of the house they want to buy, their solicitors
won't be interested in Searches once aged a few weeks, and
buyers will have to pay for new ones. Mortgage Lenders will have
no use at all for the 'Reduced HIP'. A complete waste of time and
THE HOME-OWNING PUBLIC AND
ALL ASSOCIATIONS, INSTITUTIONS AND CONGLOMERATES INVOLVED IN THE
PROPERTY TRANSFER INDUSTRY SHOULD CONTINUE TO PRESS FOR 'REDUCED HIPs'
TO BE HUMANELY PUT DOWN AND BURIED ALONG WITH THE ORIGINAL
PACKS. RESURRECTION OF THIS IMBECILIC SCHEME SHOULD NOT BE ATTEMPTED
IN WHAT EVER MANIFESTATION, EVEN BY A GOVERNMENT WHO SEEMS TO THINK
There are 23 million home-owners in England
Wales and Scotland (yes, Scotland is due their own style of HIP soon
too), if you think what I think, you should 'X' them
out come the election .
5th August 2006
BEGINNING OF THE END ??
MINISTERIAL STATEMENT BELOW
DEPARTMENT FOR COMMUNITIES AND
Home Information Packs
Minister for Housing and Planning (Yvette Cooper): I
am today setting out further details of the Government’s implementation
strategy and dry run for Home Information Packs (HIPs).
aims of the HIPs programme
aims of the government’s reforms to the home buying and selling process
are three fold:
to provide home owners with important energy efficiency information
about their homes to help them cut fuel bills and carbon emissions.
This is vital as homes account for 27% of Britain’s carbon
emissions. Energy Performance Certificates will provide clear
information about the energy efficiency of homes and how that can be
improved. The Energy Saving
Trust estimate that following the advice in Energy Performance
Certificates could save the average home owner up to £300 a year on their
fuel bills The government believes it is important to implement these as
early as possible given the importance of reducing carbon emissions.
to benefit consumers by cutting waste and duplication, speeding up
home sales and reducing the number of failed transactions, which at
present cost consumers around £350m a year in wasted costs.
to encourage and support long term transformation of the home
buying and selling industry by introducing greater transparency and
competition to drive down costs and incentivise better service and clearer
redress for consumers.
three main components to Home Information Packs: searches and other legal
documents; Energy Performance Certificates; and the home condition surveys
that make up the other component of a full Home Condition Report. It is essential that all aspects of Home Information Packs
are properly tested before full implementation.
We need to be sure that consumers understand, value and can utilise
the information that HIPs provide; that the assumed benefits will be
realised; and that the different operating systems underpinning HIPs will
As part of
our ongoing programme of implementation, we have already successfully
tested over 14,000 HIPs with searches, but largely without Home Condition
Reports, in the dry run so far. Over
the course of the summer we propose to undertake further consumer research
on Home Condition Reports; to study in greater detail the 250 HIPs that
have been produced to date with some kind of survey; and to look to see
what more we can learn from experience in other countries where HIPs have
been introduced successfully or are currently being proposed.
From the autumn the emphasis of our implementation programme will
switch to the testing of Energy Performance Certificates and Home
Condition Reports. Working
with the industry and with consumers, we are proposing to support a series
of area based trials and we will test proposals such as allowing sellers
to start marketing their homes if they have already commissioned their HIP
rather than having to wait up to 14 days. There will be independent
assessment and monitoring of all aspects of the dry run.
It is also
important that reforms are introduced on a timetable and as part of a
programme that maximises the benefits for consumers and the environment.
part of the development of the dry run we have engaged in detailed
consultation with a wide range of stakeholders and have gathered
substantial information on the progress of implementation so far. As a
result, we have concluded that there would be significant risks and
potential disadvantages to consumers from a mandatory “big bang”
introduction of full Home Condition Reports on 1 June 2007. In particular:
Further testing is
needed to ensure that Home Condition Reports deliver the assumed benefits
for consumers and that the operating systems that support them work
smoothly. Design work on the
dry run has made it clear that this cannot be completed in time for the
results to be taken into account in by 1 June.
A recent report from
the Council of Mortgage Lenders identified the real possibility that some
lenders might not be fully geared up to use HCRs until 2008-09.
In particular the industry’s plans for bringing in Automated
Valuation Models means that many lenders will not have them in place by
June 2007 and so will continue to seek separate mortgage valuation surveys
where they could have relied on a Home Condition Report.
There are concerns
about the number of inspectors that will be in place in time for June next
because of our commitment to addressing climate change we do not want to
jeopardise the successful introduction of Energy Performance Certificates
at the earliest possible opportunity by pursuing the ‘big bang’
mandatory introduction of full Home Condition Reports at the same
that progressive market-led take-up of full HCRs could strongly benefit
consumers. Bearing in mind
our commitment to the early introduction of Energy Performance
Certificates, combining an Energy Performance Certificate and a full Home
Condition Report at the same time is likely to offer significant
additional benefits to buyers and sellers.
In particular, sellers offering full Home Condition Reports should
be more likely to benefit from swifter sales and suffer fewer transaction
failures, as accepted offers are much less likely to be re-opened as a
result of new information coming to light. In addition, once Automated
Valuation Models are in place, Home Condition Reports should mean buyers
get cheaper and swifter valuations and mortgage offers. We therefore
believe that there will be a significant incentive for consumers to top up
their HIPs voluntarily to include full Home Condition Reports and that
this is a product that the market can and should deliver.
have concluded that:
HIPs will be
introduced with searches and other key documents from 1 June 2007.
Certificates will be included in HIPs on a mandatory basis from 1 June
We will work with
the industry to facilitate market-led take-up of full HCRs. As part of
this approach, we will explore with the sector a wide range of options to
enable a successful and innovative market for HCRs, including options for
supporting the provision of necessary systems, effective demonstration
projects for HCRs, and will consider the case for pump-priming funding.
This market-led approach has the added benefit of giving industry
more flexibility to innovate and adapt to consumer preferences.
This means that the
remaining aspects of Home Condition Reports will not be made mandatory
from June next year, but HCRs will be authorised documents that sellers
will be able to include in their packs
Mandatory HCRs will
remain on the table if the industry fails to make a success of the roll
out of HCRs
As part of
the next phase of reform of we will also be setting out our plans for an
ombudsman scheme for estate agents to strengthen consumer protection as
well as further proposals to review competition and transparency in the
industry to the benefit of consumers
that these arrangements will ensure that Home Information Packs are
implemented in a way that maximises benefits for consumers and the
environment and successfully enables the long term transformation of the
home buying and selling market.
The Conservative Party has formally
announced their intention to scrap Home Information Packs when elected.
Their Shadow Housing Minister Michael Gove MP has recently given the
government a number of 'grillings' in the Commons over their misguided
policy on HIPs. A recent Early Day Motion will give you a flavour of what
the Tories think. The support of 132 MPs across all three parties is
impressive, particularly bearing in mind 'Front Bench ' Members cannot add
their names to EDMs - see
7th June 2006
Press Association release - SEE Trevor Kent's comment directly below
Government's Home Information Pack plans
Home Information Pack plans have caused controversy
The Government has been challenged over
its plans to introduce Home Information Packs across the country.
By June 1 next year all homeowners will
need to arrange for a pack to be prepared, costing more than £700,
before putting their homes up for sale.
But Michael Gove, for Tories, asked if
ministers would declare it a success regardless of the outcome and told
Housing and Planning Minister Yvette Cooper she was "all too well
aware that every industry expert insists on the need for an appropriate
dry run before we press ahead with this intervention in the
"But so far only 200 of the 4,000
promised home inspectors have actually qualified. No specific
geographical areas have yet been earmarked for dry runs, despite what
your predecessor promised in 2004.
"We have no clear and unambiguous
and independently audited criteria for judging the success of these dry
"Can you actually tell us what the
benchmark for success in the these dry runs will be or will ministers
simply award themselves a pass mark irrespective of the results?"
But Ms Cooper, responding at Commons
question time, said Mr Gove had been an advocate for those in the
industry who opposed the packs because they made money out of the
current system and warned him against becoming
"the parliamentary spokesperson for the National Association of
Estate Agents who may have their interests in this process".
"We have made clear for many months
that we will introduce a dry run right across the country so that we can
test the component parts of Home Information Packs and it is important
that buyers and sellers should be able to see improvements and
efficiency in the current system."
She urged the Tories to listen to the
Consumers Association and "buyers and sellers right across the
country" because they are "wasting loads of money in the
current system and I don't think that's fair".
Press Association 2006
RESPONSE TO ABOVE
TREVOR KENT LEADING ANTI-HIP CAMPAIGNER & FORMER
PRESIDENT OF THE
"How dare Housing Minister Yvette
Cooper stoop so low as to suggest her Tory Shadow counterpart Michael
Gove MP is becoming the 'parliamentary spokesperson of the NAEA',
" says Trevor Kent, the Association's former
president. "as if the next government would make a major
policy decision such as to scrap HIPs just on the say so of a single
small professional body with a personal interest. ".
"Ms Cooper's problem is that she has
inherited from five previous Housing Ministers a
chalice brim full of bile and prejudice and she's not woman
enough to grasp the nettle and tell her boss to drop the whole
caboodle right now, before her brew poisons the whole of the property
industry. Her's and her predecessors' only policy continues to be
to belittle all constructive criticism ." he continued.
Kent claims that the government has known
since 1998 that their proposed Home Information Packs have
been ruled as unworkable and un-necessary by
every branch of the professional property industry. The
initial introductory Department under John Prescott firstly
sought votes by suggesting HIP introduction would 'end gazumping' ,
having been persuaded gazumping was a rare occurrence they then
suggested HIPs would be the saviour of the first time buyer -
(apparently rampant property price inflation had nothing to do with
first timers' inability to buy, no it was the fact that sellers didn't
tell buyers what might be wrong with their houses, that was the
Thus her gadereen rush to introduce
HIPs and the turning of a deaf ear to warnings from The Law
Society, the RICS, the CML, the BSA, indeed just about everyone who
knows what they're talking about, not just the NAEA. The
only support the government could find was from Which? the magazine
publishers. To compliment their smoke and
mirrors deception that HIPs will be good for us, the
government even encouraged the creation of a 'new industry' -
Home Information Pack Providers and gave their newly formed
Association a leg up - to the extent of seeing one of their
own staff (already provided to the ODPM 'on secondment' by HBOS)
joining as Deputy Director General.
" I suggest Ms Cooper looks to her
own house before changing the way others sell theirs," concludes
Trevor Kent, "HIP introduction on June 1st 2007 will lead
to property market melt-down of undreamed of proportions
and produce 3m very disgruntled voters in each and every
year 'till the Tories do the sensible thing".
Former President of The National Association
of Estate Agents
KENT'S PRESS RELEASE - 10th April 2006
'DRY-RUN' OF HIPS - 'A WHITEWASH'
Trevor Kent, former president of The
National Association of Estate Agents, and a fervent Anti-Home
Information Pack campaigner, has poured scorn on the
announcement from Yvette Cooper MP at the ODPM that
they are to institute a dry run to evaluate the Packs'
efficacy. The Housing Minister recently said that the
dry run will "make sure that all aspects of the Packs are
properly tested before being fully introduced next year".
"What arrant nonsense this is"
says Trevor Kent, " the ODPM's so called dry run is being
conducted for them exclusively by companies already totally
committed mentally and financially
to the introduction of the new scheme. With multi-million
pound investments already made by these participants with
the prospect of securing a share of the estimated 1.75m HIPs a
year (at an average cost per report of £1000), who's going to
say to the ODPM ' well actually our dry run findings reveal
HIPs aren't needed and won't work' ?".
Introduction of HIPs has been a Labour
Manifesto pledge since 1997, but opposition has snowballed as
professionals have realised the government is, at last, taking
serious steps towards implementation despite their dire
warnings. Trevor Kent suggests there is no public support
for the introduction of a legally enforceable two week delay
before being 'allowed' to put one's home up for sale. He also
feels that owners will not be prepared to pay £1000 + for their HIP
to be prepared by faceless Home Inspector/Conveyancer conglomerates
and then see intimate details of their home and wealth posted on
the internet and recorded in government departments for who knows
what future snooping.
"If Ms Cooper wants a serious and
objective report on whether Home Information Packs stand a cat
in hell's chance of working and being accepted by the public, then she
should include some of the 1000
branches of independent estate agents who wrote to her recently to
tell her 'they won't' . Or she could include some members
of the Law Society's property division who recently said 'HIPs
should come with a health warning'. Even the Council of
Mortgage Lenders have ' grave doubts' now, and the Royal
Institution of Chartered Surveyors are less supportive than
they were," Kent adds.
The Conservative Party have pledged
to repeal Home Information Packs if they are returned to power at the
next election , and Ian Liddell-Grainger MP is to introduce a 10
Minute Rule Bill immediately the House returns after the Easter
recess, calling for their immediate abolition. In the meantime Trevor
Kent continues to chant the mantra that 'Sellers Packs Legislation
Is Not The Answer' - and if there is to be a dry run to
find out that he's right, then it should be fairly and objectively
to hit where it hurts
Tentative first time sellers will suffer most with the introduction of
Struggling first time sellers are likely to be hit the hardest by
Government plans to introduce Home Information Packs (HIPs) to the
housing market in June 2007, according to research by the National
Association of Estate Agents (
those currently in the first time seller bracket (24 to 34 year olds),
76 per cent said withdrawal costs incurred via the HIP would discourage
them from putting their homes on the market.
A massive 80 per cent of respondents in the survey’s 16-24 age bracket
also stated that such costs would, in theory, deter them from putting a
home on the market.
any home put on the market with an estate agent can be withdrawn from
sale – if it does not find a buyer, or the owners need to stay put for
whatever reason – without incurring any costs.
From June 2007, when HIPs are introduced, homeowners will have to
pay the fee for their HIP when they remove their home from the market,
regardless of whether the property has sold or not.
executive of the
Peter Bolton King says; “Those on the lower rungs of the housing
ladder clearly need all the help they can get in order to find their
feet financially. This is
the age at which children come along, and families are most likely to be
looking for more space.
the anticipated cost of the HIP set at between £600 and £1,000, plus
VAT, and high levels of stamp duty to contend with, many first time
sellers may find that the next step up the ladder is simply too much of
a stretch for them, and be forced to stay put.
This will, of course, impact on the rest of the housing market,
slowing it right down and causing frustration for first time buyers and
those further up the housing ladder alike.”
survey also found that a significant number of experienced sellers were
deterred from putting their homes on the market by the potential
withdrawal costs of HIPs, with almost 68 per cent of those aged 55+, 69
per cent of 35 – 44 year olds and 71 per cent of 45 – 54 year olds
Halifax First Time Buyer Annual Review published in January 2006
confirmed the average age of the first time buyer is now 33 years old.
This research for the NAEA was carried out online by Tickbox.net between
a nationally representative sample of 1295
adults aged 16 plus.
is a leading market research organisation, carrying out consumer,
corporate and niche market surveys online amongst a 50,000 plus member
is a member of the BMRA (British Market Research Association), follows
the codes of the MRS (Market Research Society) and is fully registered
and compliant with the Data Protection Register, as well as being the
preferred research supplier of the PRCA (Public Relations Consultants
The National Association of Estate Agents (
) is the
’s leading professional body for estate agency personnel, representing
the interests of approximately 10,000 members who practice across all
aspects of property services both in the
and overseas. These include residential and commercial sales and
lettings, property management, business transfer and auctioneering.
National Association of Estate Agents is dedicated to the goal of
professionalism within high street estate agency. Its aim is to reassure
the general public that by appointing an
member to represent them they will receive in return the highest level
of integrity and service in both sales and lettings. Each
member is bound by a vigorously enforced Code of Practice and adheres to
professional Rules of Conduct. Failure to do so can result in heavy
financial penalties and possible expulsion from the Association.
KENT'S PRESS RELEASE - 20th February 2006
A nervous and almost shifty-looking Housing
Minister, Yvette Cooper, failed to impress on 'Tonight with Trevor
McDonald' on 20th February, when asked to justify the billion
pound introduction of Home Information Packs due next year.
"Critics queued up to pick holes in her system that will force
home sellers to write a cheque for £1000 or more, and wait
two to three weeks before being allowed to put their homes on the
market" reports Trevor Kent, former President of The National
Association of Estate Agents and one of the country's most
vociferous critics of the scheme.
Kent continued " The programme
confirmed that I am not a cranky lone voice in the wilderness as the
ODPM has suggested, by highlighting heavyweight criticism from
important bodies in the home-sale industry such as the Council of
Mortgage Lenders, the Law Society and the NAEA".
Cooper and by implication, her boss John
Prescott, seemed to be able to find only one reason why three
million people a year should have to lash out good money for a HIP -
"First time buyers should be aware of the risks and protected
from abortive costs if a property turns out to be in poor
condition". Yet everyone knows, except her it seems, that
first time buyers are a fast disappearing breed due to house price
inflation, and all experts accept that HIPs will exacerbate
inflation dramatically, making it harder still for them to buy.
" A Home Information Pack will be
between 100 and 200 pages long and will contain some very personal
details of intending sellers' homes, wealth and life-styles. It will be
available not just for prospective purchasers of the home for
sale to inspect, but also goodness knows what governmental
departments and quasi-official snoopers to delve in to, as
each report will be centrally recorded" concludes Trevor Kent,
" this crazy, expensive, unnecessary rubbish must be stopped, and
Former President of The National Association
of Estate Agents
31 January 2006
Information Packs should carry Health Warning
The Law Society has warned that a
crucial “health warning” must be carried on all Home Information Packs
In its response the draft HIP
regulations, the Law Society has suggested that the warning should reinforce to
the buyer the risk of taking on substantial liabilities and commitments without
the benefit of independent advice.
Kevin Martin, Law Society President,
is concerned that without the warning there will be serious risks to the
consumer: “HIPs contain important
legal documents on which professional advice must be obtained. Without
appropriate warnings there is a real risk that a buyer could be pressurised into
buying a property without independent advice.
Buying a home is often the biggest single purchase most people make.”
Commenting on the need for the packs
to be dated and authenticated, Kevin Martin, said: “Currently there is no
provision within the regulations for information within the HIP or the HIP
itself to be authenticated or confirmed by the seller. This is a serious defect.”
Mr Martin said: “It is essential that HIPs will, in fact, bring the benefits to consumers
that the Government claims. Packs
should be seen as part of
the conveyancing process and not just a component of the marketing process. They
should contain the best possible information to assist buyers and their
solicitors to move transactions forward as quickly as possible.”
MARKET OF NEARLY NEW PROPERTIES COULD SUFFER WITH ADVENT OF HIPS
NAEA predicts lengthy delays during resale of new build property
National Association of Estate Agents (NAEA) is cautioning the Government that
the introduction of Home Information Packs (HIPs),
designed to speed up house buying, could in fact cause frustrating delays for
many people trying to sell a property which still has time to run on its new
According to the Council of Mortgage Lenders*, most new properties are covered
by a guarantee scheme to protect buyers against any major structural faults
which may develop in the first 10 years after the property is built.
The anticipated delays will probably arise from the Home Condition Report
(HCR) element of the HIP, due to be mandatory from June 2007, and its
application with regard to new build properties with an exisitng
HCR requires a survey by home inspectors on all property for sale to bring to
light any flaws before it goes onto the market, which could affect a property’s
Stewart Lilly, chairman of the
and New Homes Groups explains: “If the HCR highlights any wear and tear on
the property at this stage, the seller will naturally be inclined to get these
fixed before it goes on the market, in order to achieve the best price.
A claim on the 10 year warranty can take up to nine months to deal with,
depending upon the severity of the problem.
During this period the homeowner may not be able to market the property
as for sale, causing extreme frustration. It may also have an impact on
copies of new homes warranties are issued each year, as a result of the original
being mislaid by the property owner. These
normally can take a while to re-issue through the system.
As Stewart Lilly explains; “The advent of the HIP will undoubtedly
increase the volume of requests for copy documents which the warranty providers
have to deal with, as people will need the warranty certificate to complete
their HIPs. This
means that many sellers of new build properties under 10 years of age may have
to wait a bit longer to actually put their homes on the market, as by law a
property will not be able to be marketed without a complete pack”
Peter Bolton King, Chief Executive at the NAEA, concludes: “This is yet
another delay with regard to HIPs that the
Government has not considered. We
will continue to lobby on this issue on behalf of consumers until all these
points are cleared up.”
& views news
clock is still ticking!
Time is running out for the successful introduction of home information
packs (HIPs) in June 2007. There are still many unanswered questions,
and the government has yet to publish a detailed timetable setting dates
for resolving the key issues.
Among all the uncertainty, lenders have continued to give a clear and
unequivocal message. The
introduction of HIPs will not alter the need for a reliable valuation,
which is a fundamental requirement for prudent lending and provides
security for lenders and borrowers.
Once all the outstanding issues have been resolved, firms operating in
the housing market will need 12 months to build their systems and ensure
that these are given a real and robust test. The government has assured
everyone working in the industry that it will not introduce HIPs until
it is absolutely clear that they are going to work.
The industry needs more information about the potential market impact of
HIPs. There are good reasons for expecting a glut of properties on the
market before June 2007 – as sellers rush to avoid paying up to
£1,000 for a pack – and a shortage thereafter. The government need to
do more to assess the possible impact.
We also need a detailed cost-benefit analysis of the effect of HIPs.
Yes, there will be benefits from a more efficient method of buying and
selling property – but the benefits need to be measured against the
significant costs for the industry and consumers.
We will continue to work with the government to introduce HIPs as
efficiently and effectively as possible. But if the implementation plans
are flawed or cannot be completed in time, the government must be
prepared to re-consider its proposal for introducing HIPs in June 2007.
contrast to all the uncertainty about the government’s plans, there is
a clear message from lenders:
not change the fundamental requirement for a reliable valuation of a
the clock is still ticking!
Home information packs:
Valuation: a key issue
the proposed introduction of home information packs (HIPs) now only a
little over 15 months away, there is still too much uncertainty about
the government’s plans. Three months have elapsed since the government
announced its revised implementation date of June 2007 – yet we have
still to see a detailed timetable of events leading up to the planned
launch date. The need for that timetable is now more pressing than ever,
so that everyone understands when they are still able to shape the
rules, and when the rules have been cast in stone so that systems can be
built in confidence that there will be no further changes.
contrast to all the uncertainty about the government’s plans, there is
a very clear message from lenders
HIPs. The reality is that they will not change the lender’s
fundamental requirement for a reliable valuation of a property providing
security for a loan. A valuation provides an independent, reliable,
indemnified and timely assessment of a property’s worth. It is an
immutable requirement for prudent lending, protecting both lender and
home condition reports (HCRs) contained in HIPs will not be an automatic
substitute for the valuation that lenders need for every transaction.
Over time, robust HCRs that can feed seamlessly into lenders’
information systems may reduce the number of physical inspections that
lenders need to make. Where this can happen, consumers could benefit
from lower costs, which would help to offset the charges they will have
to pay for HIPs.
the majority of cases, however, lenders will still need a valuation
report, for which there will be a separate charge. In particular,
lenders are likely to need a valuation report for:
both low- and high-value properties;
properties in rural locations or other areas where comparing the value
of another property is difficult;
properties built using non-traditional or unusual materials or methods
older properties, or ones where the buyer wants to borrow a large sum
relative to its value;
borrowers with credit risk or other problems.
Home condition reports
do not have figures for the numbers of properties that fall into all of
the above categories. But we do know, for example, that some 40% of all
mortgages for house purchase have a loan-to-value ratio of 80% or more.
In these cases, lenders are likely to require a separate inspection,
regardless of the HCR.
November 2004, former housing minister Keith Hill gave an ‘absolute
assurance that we will not bring this system in until we are absolutely
clear that it is going to work’ ”
it will be for individual lenders to decide when they can rely on HCRs
and when they require an additional valuation, bearing in mind the need
for responsible lending. Some may decide not to use HCRs at all, but
continue to carry out valuations as they do now. Others may look at
paper copies of HCRs to help decide what type of valuation to
commission. And some lenders may want to use automated systems to sift
electronically, perhaps choosing to use AVMs for properties with good
condition ratings. Partly as a result of the uncertainty over government
plans for HIPs, the extent to which individual lenders will rely on a
combination of HCRs and AVMs is not clear at this stage. But some idea
of the different approaches the industry may adopt emerged at a seminar
we held in January, looking at the operating environment when HIPs come
into effect. The chief executive of Hometrack, Mark Witherspoon,
confirmed that AVMs were not seen as a replacement for traditional
valuation techniques, and argued that lenders were more likely to use
them for remortgaging decisions than house purchase. Graeme Winser, the
chief executive of UK Valuations, pointed out that while the accuracy of
AVMs had improved dramatically over the last 18 months, further
improvement would be more difficult to achieve. And others pointed out
that AVMs could work well for some properties but were less reliable
when applied to newly-built homes.
the industry needs
number of other factors will determine the extent to which lenders can
rely on HCRs. In particular, any databank of HCRs must have a single
point of access to minimise the technology requirements. There should
be no charge for lenders who want access to the databank. Use of HCRs
will still depend on how reliable they prove to be. The government
therefore needs to encourage the development of a home inspector
certification scheme as soon as possible, and commit to contributing
start-up costs if necessary. And to realise the full potential of its
plans, the Government must liaise with the Land Registry on
complementary initiatives like the introduction of e-conveyancing.
support the government’s broad objective of improving the home-buying
process. We have therefore sought to work with the government to ensure
that outstanding issues that could jeopardise the launch of HIPs are
addressed. To ensure that HIPs are launched as successfully as possible,
the Government now needs to:
Publish a detailed timetable of key dates leading up to the
implementation of HIPs, allowing everyone who will have to work with
them, including lenders, to plan how their industries and their
individual businesses can prepare. The timetable needs to cover issues
like the setting up of an HCR databank, the introduction of qualified
home inspectors and the setting of standards for technical and business
processes. We advise the government that it should be working towards
implementation between October 2007 and January 2008, because of the
amount ofwork still to be done and the need to avoid the busiest times
of the year for the housing market.
Publish its plans for a ‘dry run’ of the system. We believe that the
dry run should provide a real and robust test of the process from start
to finish. It cannot begin until a scheme for certifying home inspectors
is in place, for such a scheme is crucial in delivering confidence both
in professional standards and in the quality of HCRs. In November 2004,
the former minister for housing and planning Keith Hill gave an “absolute
assurance that we will not bring this system in until we are
clear that is going to work.” If the dry run shows that the
implementation plans are flawed or cannot be completed in time, the
government must be prepared to re-consider its proposal for introducing
HIPs in June 2007.
Publish its plans for addressing the potential market impact of the
introduction of HIPs. Everyone with a stake in the property market,
including individual buyers and sellers of property, could be affected
by the proposals. It is difficult to predict exactly how the market will
react to HIPs but in the months leading up to their introduction there
could be an over-supply of property as sellers try to avoid the costs of
packs, while first-time buyers hold back for them. But, after they are
introduced, the market could be weak with fewer sellers and less choice.
The government needs to do more work on the potential market
consequences, so that everyone can be better prepared.
Undertake a rigorous cost-benefit analysis of the introduction of HIPs.
There will be significant costs for lenders, although the government
seems reluctant to acknowledge that there will be a financial impact on
the industry. Other sectors will also incur costs, and so will
consumers. Lenders acknowledge that there will be benefits from a more
efficient means of buying and selling homes, but they must be measured
carefully against the costs.
recent seminar heard how the introduction of the Danish equivalent of
HIPs had affected the number of transactions in that country. The chief
executive of the Danish Association of Estate Agents, Palle Ulstrupp,
said that packs had deterred speculative sellers of property and that
there were consequently up to 25% fewer homes on the market since their
introduction. He also said that there was a fundamental mistrust by
buyers of HCRs commissioned by an estate agent marketing the property.
will continue to work with the government to implement HIPs as
efficiently and effectively and possible. The best chance of delivering
this is to ensure that the outstanding issues are addressed and that
firms have at least 12 months to build and test the systems that will
fulfil the government’s objectives. At the same time, we will continue
to express lenders’ concerns about the proposals. Where those concerns
echo the views of other professionals in the industry, they must still
be communicated to the government. Earlier this month, for example, the
Home Builders Federation (HBF) echoed our call for a proper trial to ‘road
test’ HIPs. And he would endorse the HBF’s concern that consumers
should not become “unintended losers” of a scheme originally devised
to serve their interests.
Well over 500 influential estate agency proprietors
with some 1500 offices between them , including Trevor Kent
of course, recently subscribed to the sentiments in
this Press Release issued in February 2006
AGENTS FIGHT FOR CONSUMERS' INTERESTS.
professionals tell government "You've got it wrong" over plans
for compulsory Home Information Packs.
powerful group of estate agents, joined by chartered surveyors and
solicitors has written to Housing Minister, Yvette Cooper MP calling on
her to drop plans for the introduction of Home Information Packs (HIPs) in
June 2007. The group say HIPs will be "detrimental to the consumer;
could dislocate the property market and will fail to significantly improve
the home buying process."
heads of firms representing over 1,650 offices in England and Wales are
warning government that HIPs will cost home sellers and buyers over £600
million pounds every year in extra costs yet will fail to deal with the
problems of delay, frustration and abortive cost in home buying.
letter's signatories include household names such as Knight Frank and
Savills, but it is not only top firms that are up in arms. Hundreds of
smaller firms and local agents from all over the country, dealing in all
price ranges, have signed up too.
estate agent, Nick Salmon, a fellow of the National Association of Estate
Agents leads the group and says that HIPs will have very serious
consequences for the public.
government is about to con the consumer that HIPs is a magic cure for the
problems incurred in home buying whereas in fact it will be an expensive
disaster for everyone except the commercial enterprises that have set up
to cash in on this new, annual billion pound market. There will be a 30%
reduction in the number of properties put up for sale each year as sellers
are deterred by the £700 to £1000 cost of a Pack. That reduction in
supply will cause massive house price inflation."
and sellers will be disappointed and angry to discover that the expensive
HIP will leave them still facing most of the problems currently inherent
in the property buying system including gazumping, gazundering, and
chains. The government are forcing us over the edge of a precipice
by pushing this through and it is the consumer who will pay. This is
'Prescott's Penalty' on the housing market and it must be stopped."
would all like to make home buying easier but the government is deaf to
any constructive criticism levelled at HIPs. So now the property industry
is coming together to protect the interests of the consumer and calls upon
the Housing Minister to shelve the implementation."
plans a new disaster for house sales
John Prescott, the man who
doesn't pay his council tax, will soon face another major embarrassment.
This is the chaos he will unleash by introducing a serious new complication
to homebuying, due to cost homeowners £1 billion a year - all because he
wishes to disguise his need to obey a Brussels directive.
From June 2007, it will be
illegal for anyone to offer a house or flat for sale without paying up to £2,000
for a 100-page "Home Information Pack", prepared by a certified
inspector. This "HIP" will contain details of legal and council
searches, and a "Home Condition Report", checklisting the kind of
details obvious to a fairly rudimentary visual inspection. (Buyers will
still need to commission a full structural survey and valuation.)
This is a flimsy cover,
however, for the real motive behind Mr Prescott's HIP scheme - his
obligation to comply with EC directive 2002/91 requiring every home put on
the market to have an "Energy Performance Certificate", based on a
formula which measures the size of a property against recent fuel bills.
The more closely surveyors,
estate agents and lawyers look into Mr Prescott's scheme, the more horrified
they become, not just by its pointlessness, but by the damage it is likely
to inflict on the property market. According to his officials, it will
require up to 7,500 inspectors, each needing 18 months' training. The latest
figure for inspectors in the pipeline is only 1,800, so when the scheme
comes into force in 18 months, less than a quarter of the required number
will be available.
Nevertheless, anyone caught
by trading standards officials selling a home without an HIP will be liable
to a summary penalty up to £500. The shortage of inspectors means that,
unless Mr Prescott is allowed a postponement from Brussels, delays of
months, even years, will be inevitable, creating havoc across the domestic
The initial cost of
commissioning an HIP will be incurred by the estate agent, to be added to
the bill when the property is sold. Although the Government's estimated cost
for an "average" property is only £700 including VAT (quite
onerous enough for sellers on low incomes), in many cases the cost will be
as high as £2,000, and perhaps even more. Few vendors will wish to pay such
sums more than once, particularly when the cost of copying a 100-page report
for each prospective buyer could be £15 or more. Gone will be the days of
offering a home through more than one agent.
One horrified observer of
this "disaster waiting to happen" is Philip Collings, formerly the
IT director for Railtrack, who has just launched a website (www.hipfreehomes.com),
explaining some of the more glaring flaws in the scheme. He points out that,
of the £1 billion a year it will cost to run, the Government will take £87
million in VAT, and that the details of each property will have to be
registered on a Government website, making it easier to carry out
revaluations for council tax.
But Mr Collings also believes
he has spotted a loophole in the scheme, by which homeowners could avoid
having to pay for HIPs. Although he is not revealing the details yet, for
fear of counter-action by Mr Prescott, he is inviting property owners who
are likely to sell within two years to register their interest on his
website, so that in due course he can sign them up, for a modest fee, to an
arrangement which he believes could save them thousands of pounds and months
Despite opposition from almost everyone devoted to the house buying and
selling industry (including many surveyors who have spoken to me
privately) the Government presses on with the HIP, but for what ? Votes -
unlikely, prestige - unnecessary, bloody mindedness - possibly, or perhaps
there is another agenda to do with future tax raising and cost
saving ? It has been suggested that the Quango
"hubs" to be set up to collate
and centrally record the
Home Inspection reports may be used by the Government to produce the
report on housing stock insulation required by the Kyoto agreement.
also felt in some quarters the Government will also use the data base to
carry out a revaluation for Council Tax or other tax raising initiatives (and all paid for by
What we do
know is that the Government misguidedly forges ahead and has presented
draft regulations for the preparation of HIPs, you can study these on this
link to the ODPM
Despite a previous slamming by the Select Committee,
and a mauling by both Houses of Parliament in debate the Government still
the folly of their ways. We are left with a law that will make it
an offence from 2007 for ANYONE to put their house on the market without
having first bought a survey of their home (for the buyer to look at),
a contract style property report, local searches, guarantees and planning
permissions. So, no for sale board, no advert, no phone call to a hot
prospect - nothing for at least 3 weeks whilst someone prepares your HIP
(Home Information Pack). The Government say one of the monopoly HIP
providers will do all this for you at 'no up-front cost'. What of
the cost however, if granny dies and you decide not to sell, or you lose
the one you're after (probably because of the delay in getting yours on
the market because of the need for a HIP), who pays the £1000 then?
You've guessed it - you. Most HIP providers plan to enter intending
home sellers into a credit agreement to ensure payment of the £1,000+ for
Read the Office of The Deputy Prime Minister's
latest on HIPs by hitting the link to ODPM
then read what The Times thinks of the ODPM's plans
below. Finally consider whether you wish a 20 page survey of your
home to be recorded on a Whitehall computer and available for the public
and Government agencies to read (at your cost) and the loss of your
right to market your home on the day you chose.
ANYONE selling a
house will have to spend up to £1,000 providing an
information pack for buyers as part of a shake-up of
the housing market to be published by the Government
has learnt that John Prescott will finally publish
draft laws creating home information packs (HIPs),
amid mounting concern that the measures will
destabilise the housing market and increase
significantly the costs of moving. The Government
maintains that its plans will reduce the cost of
buying a house, particularly helping first-time
regulations leaked to The Times, from spring
2007 anyone selling a home will have to provide
potential buyers with a sheaf of documents including
evidence of ownership, local authority searches and a
new “home condition report” before they can put
their house on the market. Opposition politicians and
industry groups said yesterday that the plan would
create a new army of unregulated pack providers who
could exploit buyers and sellers. There are also
concerns that buyers will have no confidence in the
home condition report provided in the pack and will
pay to have a full building survey done themselves.
information packs will be a breeding ground for
cowboys happy to ignore problems, or worse not
qualified to identify them,” Sarah Teather, the
local government spokesman for the Liberal Democrats,
said. “Most buyers will simply not trust the report
of a home inspector paid by the seller and will end up
paying for their own survey.”
admitted that they were uncertain about the market
impact of the new policy, which could lead to a glut
of houses for sale before 2007 followed by a scarcity
of property after the policy comes in.
watchdog Which? supports the policy in
principle but is concerned that there is insufficient
redress against rogue estate agents or control over
the content of home information packs. Inspectors who
provide surveys will be required to have liability
insurance, because they will be held responsible for
serious errors, but no provider has yet come forward
and the Government may have to step in.
the Shadow Secretary of State for Local Government
Affairs and Communities, said that the packs would do
nothing to stop gazumping or to speed up the process
of buying a house. “Instead, sellers will be saddled
with an extra cost of up to £1,000; lenders will
probably demand their own assessments; and many buyers
will want their own survey instead of the one they are
given,” she said. “Labour’s sellers’ packs
will simply put up the cost of selling a home, create
more red tape and ultimately undermine a fragile
regulations show that the Government has decided to
press ahead with a medium-level home condition survey,
against advice from the Royal Institution of Chartered
The survey, costing
an average £350, goes into greater depth than the
current valuation carried out by a mortgage lender,
but is not as thorough as the homebuyers survey and
valuation or a full building survey.
spokesman for the institution, said that the home
condition survey was just a tick-in-the-box exercise,
rating the condition of each element of the structure.
A spokeswoman for
the Office of the Deputy Prime Minister said that
inspectors would have to be trained for at least 18
months. Existing surveyors would also have to train
before they were allowed to carry out inspections.
surveyor said: “Because the certification
requirement for inspectors is the same whether you are
an experienced surveyor or the man in the street, as
anyone can become a home inspector, there is every
chance that a seller who fears something is wrong with
his home will commission the latter to do his survey.”
July 29, 2005
Who will pay for Home
Information Packs are all very well, but who is
actually going to pick up the bill for them?
HOME INFORMATION PACKS
(Hips) have been back in the news this week, after the
Government announced the progress it has made in the
training and certification of Home Inspectors — a
crucial element to the success of the entire project.
The announcement seems to have been a bit of a wake-up
call for the industry as a whole, which is curious,
given that Hips have been in train since 1997.
When this Government came to
power, it decided to reform the way in which houses
are bought and sold and the original thinking behind
this was to call a halt to gazumping. Once it was
established that gazumping actually had very little
impact on the market, it was decided to begin a
root-and-branch review to discover how many sales fall
through, and why. The research pointed to 28 per cent
of all transactions falling through after terms had
been agreed: and, further, that almost half of these
were because of problems with the valuation or survey,
at an average cost to the buyer of £1,000.
“If you look at England and
Wales compared with housing markets in other
countries, we are at twice the European average in
terms of the amount of time it takes to buy or sell a
house,” said Yvette Cooper, the Minister for Housing
and Planning. “The estimated cost of failed
transactions is about £350 million.”
While many areas of the industry
have welcomed Hips, and companies such as Rightmove,
the property portal, have already invested millions in
their technology infrastructure, those who have yet to
start a business plan are in danger of missing the
implementation date of 2007. This is more critical
than it sounds: once this comes into force, it will be
a civil offence to market a house without a pack.
Not everyone thinks
that Home Information Packs are going to make the
house-buying process smoother, however. Trevor Kent, a
former president of the National Association of Estate
Agents, believes that the cost to the seller of a pack
will be about £1,500 — almost double the current
average cost to a buyer of getting a survey done, plus
all the local searches and associated costs —
although the Government estimates the cost to be about
£650, and he questions how often the Home Condition
Report (HCR) — the survey element — will need to
be updated. Although Keith Hill, Ms Cooper’s
predecessor, told The Times in March that he
envisaged the HCR would have a shelf life of six
months, the Government now says there will be no time
limit on the HCR while the property remains for sale,
the only requirement being that it has to be carried
out no more than three months before the house is put
on the market.
Mr Kent is also concerned about
those estate agents who may seize this chance to offer
a “one-stop shop” for sales, mortgages and Hips.
He says that they may follow the lead of realtors in
the United States, who, he says, raised their fees
from 6 per cent to 8 per cent on the back of such a
monopoly. Of course,,, the main concern to independent
agents — of whom Mr Kent is one — is who will pay
for these packs up front. “I think there is a market
solution to this which is about promoting competition
as well,” Ms Cooper said. “It would be wrong for
us to end up being protectionist about this and to end
up saying we are not going to introduce improvements
that will benefit all consumers because we want to
protect bits of the industry that can respond.”
While you might think
that Mr Kent is being unduly alarmist about agents’
fees heading north, there is one concern about Hips
that has not really been addressed. The Government
wants to have the packs available at the very
beginning of the marketing process — which is fair
enough: if you can see that a property needs work that
is beyond your budget, you are not wasting yours or
the sellers’ time (and your money) by going to view
it and getting a survey.
However, most people
get details of five, six or more properties that seem
to fit the bill before whittling the list down,
are we going to be staggering out of agents’ offices
laden down by so many information packs? I have a
draft pack on my desk which is almost an inch thick.
And what about those who do their browsing online? Are
packs going to be sent out in the post too? Our local
sorting office won’t deliver anything heavier than a
Estate agents with lots
of properties on their books are going to be piled
floor to ceiling with Hips, and although this prospect
may rise a smile, are prospective buyers going to be
charged to take away packs? An agent might not want to
pay for, say, 35 copies of a pack on a property, so
will just prepare one — and then get the office
junior to photocopy it each time a buyer wants to see
a copy, charging you, what — £1 a pack for the
privilege? If the Government really is serious about
making the whole buying and selling process more
transparent, then isn’t this the perfect opportunity
for proper regulation of estate agents to be
introduced, along with Home Information Packs?
Door opens for
New laws on property
sales will mean huge demand for reports, many done by
newly trained inspectors SURVEYORS are to lose their
monopoly on inspecting homes for sale as part of a
shake-up in the law on buying and selling houses.
Ministers will announce
today that they are to open up the role to other
professionals as part of the introduction of
compulsory reports on homes before they are put on the
Yvette Cooper, the
Minister for Housing and Planning, told The Times that
Home Information Packs will be a legal requirement in
England and Wales from 2007. A new army of
inspectors will have 18 months to seek qualifications
under the scheme, which will be modelled on the CORGI
(Council for Registered Gas Installers) registration
system for gas fitters. Ms Cooper said: "A
lot of people effectively already have the skills and
experience and it's just simply making sure they are
properly certified and qualified." Only
chartered surveyors may currently do surveys because
they involve a valuation for the mortgage
lender. But the new report will not require a
valuation and will open up the role of home inspector
to a wide range of industry professionals, who will
undergo a "conversion" course, as well as to
people with no experience.
The Government would
like to attract more women into the profession and is
hoping that a certification scheme will silence
critics who have called it a "burglar's
charter". Inspectors will undergo checks on their
competence and personal history, including any
criminal convictions. They will also be required
to have insurance because they will be personally
liable for errors in the report. The number of
inspectors needed is expected to be about 7,000: more
than 1,000 candidates have registered. Only one in ten
buyers currently pays for a survey, so the increase in demand will be enormous.
More detail will be announced when Ms Cooper meets
estate agents' representatives, solicitors' leaders
and mortgage lenders to discuss how the Government
will implement the Home Information Pack. Ministers
want a "dry run", which would introduce the
packs in one area in the middle of next year, to iron
out problems before they become compulsory early in
2007. The cost is projected to be between £800
and £1,000 and will be met by estate agents or
inspection firms at the outset, then recovered from
the seller on completion, along with estate agents'
and solicitors' fees. The National Association of
Estate Agents is against this, arguing that it will be
a crippling financial burden on independent agents who
may have 100 properties on their books.
Kevin Martin, who has
just become President of the Law Society of England
and Wales, said that the information packs will be
costly and of doubtful benefit to buyers. There was
also no evidence that this would speed up the
house-selling process, he added, saying "buyers
will want to have their own surveys".
SALE TODAY OR NOT GONE TOMORROW
SAYS ESTATE AGENCY COMMENTATOR TREVOR KENT
plans to introduce controversial Home Information Pack (HIP) legislation
will deprive home owners of the right to sell when they want to.
Properties will not be allowed to be put up for sale until a pack is
prepared. The mechanism involved could delay marketing for weeks.
Kent is a member of an anti-pack campaign group, which asked a
representative number of estate agents the following question 'On
obtaining instructions to sell, what percentage of clients demand, or need,
immediate marketing? ‘. Respondents said that 89% of home
sellers expect their property to be put on the market with no delay at all.
Findings also suggest that, whilst getting on to the market quickly
was less important for top price range properties, it was 'very important
for owners of medium and lower priced homes' - the mass market in
say that, currently, they start marketing immediately they have confirmed
their terms and the property details are approved.
They instantly put up sale boards, text buyers, place advertisements
on the internet and make telephone calls to 'red-hot' applicants.
Trevor Kent says this process is not understood by government
officials, who seem obsessed with having the Pack in place before an estate
agent can so much as 'whisper' that a property may become available for
sale. Selling before a Pack
will be illegal, the pack will cost upward of £1000 and might take 3 weeks
owners making an offer for another property will demand that the marketing
process for their present home begins immediately or they will risk losing
out as a prospective purchaser for their next one.
In a recent government trial of one component of the pack by the
Building Research Establishment (the survey) they found there was difficulty
in getting sellers to take part because they themselves would not accept a
'delay in the start of marketing' which the trial required.
Kent says ‘Property professionals, who deal with home sellers every day,
are constantly warning the government that there will be much public anger
if they are forced to delay marketing by up to three weeks.
Civil servants argue that the time delay whilst preparing the pack is
well spent because it means an eventual sale is 'more likely to stand up'.
Professionals do not agree, pointing out that the small risk of
transaction failure, already down to less than 15 per cent of deals, is
small beer compared to making 'First Day Marketing' illegal.
government is ignoring its own research which shows that buyers are not
interested in seeing a Pack before viewing a property. There is simply no
justification for delaying marketing and taking away the right to sell while
the Pack is being prepared. When
home owners wake up to the implications of this proposal there will be a
political backlash, especially when people find out that their enforced Home
Information Pack will cost them £1000 and delay the 'For Sale' board going
up by three weeks‘.
Despite protestations the Bill got through Parliament
and is now an Act. The Government plans to have a 'dry run' in July
2006, no doubt to see whether HIPs will work. In the meantime they
have to decide;
(a) What goes in them.
(b) Who can prepare them.
(c) Who can read the reports when recorded on
(d) How 10,000 new surveyors (or Home
Inspectors) will be trained, regulated and insured.
(e) Prepare the public for a 3 week
delay before marketing and a cost of £1,000.
(f) Teach the industry how to use HIPs.
(g) Ensure half a dozen major companies don't
monopolise the HIPs' marketing and with it the whole buying and
selling process and end up charging the public 6% agency fees as in
Mr Prescott, I wish you luck.
The Housing Bill,
containing the proposals for Home Information Packs, received its Third
Reading in the Commons on Tuesday 18 May. The full transcript can be read
in Hansard from this link on:
It is worth noting that to the fury of the Opposition parties the
government effectively guillotined the Bill by severely limiting the time
allowed for debate. One example, of many - Robert Syms MP: "The
Government are again forcing a diktat on the House and we wish to make it
clear that we oppose their manner of conducting business in the Chamber."
Lib Dem and Conservative speakers tried their best to obtain fundamental
amendments to the clauses relating to Home Information Packs (not least a
well argued effort to make them voluntary rather than compulsory) but were
consistently defeated by dogmatic Labour speakers who will brook no
criticism of their proposals - despite there being many, major concerns
from all the key bodies directly involved in the home buying process. The
Bill passed the Third Reading.
Perhaps the situation was best summed up right at the end of the debate by
Bob Spink MP : "The process will cost more, but we shall achieve
less. The Bill is a typical socialist measure (laughter). The compulsion
to produce the home conditions report will increase the cost of selling
houses. Hon. Members laugh now, but they may not do so in two or three
years, when their constituents knock on their surgery doors. It will deter
some sellers from entering the property market. The statutory requirement
means that home information packs must be in place before any marketing
can occur. That will unduly reduce the number of houses (for sale).
It's law now, but that doesn't mean it will work.
or 01753 885522
are comments, letters and articles devoted to the subject
MINISTERS PLEDGE TO IGNORE PROFESSIONAL ADVICE ON HOUSE SALES CHANGES
has set about the task of changing the
age old system of house sales, his plans have not been well received by
the industry, but he seems to be more determined to go ahead the more
concerns he hears from property professionals.
Over the last
five years, what was then, The Department of Transport Local Government and The Regions (strangely
not the Department of Trade or even the Lord Chancellors Department) has
investigated claims that the current system is too long drawn out, too
cumbersome and fraught with disappointment for those seeking to buy or
sell a home. Their five years
of consultations were firstly under the guidance of previous ministers
Nicholas Raynsford followed by Stephen Byers then tucked firmly under the wing
of Lord Falconer
who’s previous property “experience” includes the
disposal of the Dome, and then Lord Rooker at the newly created Office of
the Deputy Prime Minister.
plan the Government favours is to legislate that all sellers intending to
put their homes on the market must first prepare a “Sellers' Home
It is intended this document should include a survey of the
property, a contract of sale and answers to all legal queries which would
normally have been raised later in a transaction by a prospective buyer.
CRIMINAL It was intended by Lord Rooker
that it would be a criminal offence
to begin marketing a home before the Home Information Pack is available for
inspection by anyone wishing to buy. It would, however take at least
to prepare. (One in the Government's own pilot scheme took 52 days!) The
ODPM has subsequently indicated the penalty for marketing without a pack
will be civil not criminal.
seems little support for the proposals from any quarter within the professions connected with house
sales. A leading critic is
Former President of the 9,500 strong National Association of Estate
Agents, Trevor Kent.
He accepts sales can take many months, he also agrees that both
buyers and sellers often loose money and suffer disappointment when sales,
particularly those in “chains” fall through.
Nevertheless he believes the Government proposals to be totally
misguided and by and large have been high-jacked by Big
Business interests. He believes a number of massive firms seek to dominate the
lucrative buying and selling market with Home Information Packs and eventually lift moving costs to
levels enjoyed in the American market whose organisations have over-seen
costs rise to near 6% of transaction values.
& COST TO THE PUBLIC
Kent says “The reason estate agency in the UK provides a 1.5% service is because of competition.
The Government’s Sellers Home Information Pack would cost each intending seller between £700 and £1,500 (depending on
their sale price) to prepare – if big business can create a stranglehold
by initially offering to fund the cost of these “packs”, their
end charges will become horrendous”.
Owners will be forced to sign “sole selling rights” contracts
with a new breed of agency/conveyancers and even a sale to Mum will
involve massive fees.
A national meeting of 300 Estate Agents in
Coventry heard David Woodward from the
Office of the Deputy Prime Minister spell out the form the “Pack” will take, but Trevor Kent reports that both
Woodward and the Government had a rough ride from agents who
foresee the total decimation of the property transfer market and certainly
there was no support in the room for
2002 National Association of Estate Agents vote in General
Council to advise the Office of the Deputy Prime Minister that they
withdraw all support for the Governments Sellers Pack system as currently
proposed. There are 9,500 members of the NAEA.
2002 The Council of Mortgage Lenders, the influential body
representing 98% of the countries Banks, Building Societies and Insurance
Companies who lend money for house purchase, hold a one day conference
devoted to Sellers' "Home Information Packs". They announce they too doubt
the effectiveness of the proposed changes and urge the Government to
re-think their strategy.
THE LAW SOCIETY
conveyancing solicitors who undertake the bulk of the housing transactions
in England and Wales said of Sellers Packs 14/11/02 "The Law Society
also has grave concerns about the Government's plans to make a Home
Information Pack compulsory for people selling their homes. The Society
believes strongly that use of the pack should not be compulsory as this
would load significant extra costs on to people on low incomes who are
selling their homes. Commenting on the Pack proposals, Law Society Chief Executive Janet Paraskeva, said:
"Improving the home buying process is something to which the Law
Society is committed. However a compulsory sellers' pack containing
information such as a survey which will soon be out of date, and is
expensive to provide, is not the real answer. Electronic
conveyancing and the increased use of the National Land Information System
will substantially improve the home-buying process more effectively than
the provisions proposed."
The Bucks Free Press
can damage your house sale
reader contemplating the sale of their home in the future would be well
advised to spend a few moments contemplating their recent “extension and
do work on their houses with no permission at all – I’m sure they are
already aware they will face legal problems when they come to sell.
I am more concerned with those who have “done it right” by
getting Planning Permission and Building Regulations Consent, but have
forgotten to obtain a “Confirmation of Completion Certificate” from
their Council, following a final inspection.
Buyers’ solicitors’ demands for such documents can and do cause
serious problems, delays and sometimes lost sales.
Government intends to legislate soon that every seller should have a legal
“Home Information Pack” prepared, at the seller’s cost (many hundreds of
pounds round here) BEFORE an agent is permitted to begin MARKETING. Failure to have details such as Building Regulations
Completion Certificates to hand, may
mean the law would delay my nailing up a “FOR SALE” board for weeks
after a decision to go to market, as Home Information Packs will demand all these details
are available first.
Government’s proposed Home Information Pack also demands (with civil sanctions
for failure), that sellers should also provide a survey (at their own
cost) before they will be allowed to market their home.
I estimate the total average upfront cost for a Sellers Pack will
be well in excess of £1000 in South Bucks, and this does not include the
further expense of “updating” the Pack if you don’t sell in 3
readers believe such details and costs would damage their prospects of
sale I urge them to write to The Minister at the Office of the Deputy Prime
Minister, at Eland House,
Bressenden Place SW1E 5DU and tell him so.
I hope he replies to you - he won’t speak to me!
L Kent PPNAEA