HIP Payment Services are behind the scheme and boast that most of the big names in HIPs have already signed up.  They say that whilst the cost of a HIP is minimal compared with the overall costs incurred in selling a home the majority of consumers have indicated that they would prefer to pay for their HIP at the end of the process rather than paying "upfront"

Some estate agents had expressed concern that chasing customers for payments for HIPs would add to their overheads. Bearing in mind that typically estate agents are paid on completion directly from the seller's solicitors they do not have to invest in the "credit control" processes that other business do.  This deferred payment scheme may also lead to "valued added extras" being easier to sell to the customer too.

Ultimately this idea could also be helpful in making the whole HIP's process less objectionable to vendors by removing the number one objection – upfront costs.

According to the Communities and Local Government website the average HIP is taking around 5 days to compile, with major estate agents charging in the region of £300 plus VAT for a HIP.

Currently the packs are only required for homes with more than 3 bedroom, it is widely expected that the next move will broaden the scope to cover all houses in England and Wales, probably early in the new year.

The packs were intended to speed up and simplify the house buying system in England and Wales, however their introduction has been opposed by many industry professionals including estate agents and surveyors.

The [tag]HIP's[/tag] pack includes several items which have always been required to complete the house buying transfer, but they also introduce some new elements too.  The full home information pack should contain:

• Evidence of title
• Copies of planning, building regulations or listed building consent
• Guarantees for any work carried out on the property
• A local search
• An Energy Performance Certificate (EPC)

The initial introduction of the Hips was delayed by the government at very short notice, officially because of a lack of trained inspectors.  However many believe that the delay was due to the intense opposition to HIPs from within the industry.

The reports that are now required are very different to the ones originally proposed, amongst other items the Home condition Report (HCR) was dropped.  The HCR was meant to substitute the valuation report normally required by the mortgage company. This had to be dropped when the lenders all refused to accept the report as security for the mortgage.

The energy certificate is a required element of the HIP, and is supposed to grade houses and flats in a similar way to how home appliances are graded.  The report will indicate how much money can be saved by installing better insulation or a new boiler.

Whether or not the introduction of home information packs has had any impact on the market is difficult to say, there are conflicting sets of figures which can be used to illustrate either point of view.  But there can be no doubt that Home Information Packs will continue to cause controversy long after their initial introduction.

Despite opposition to the initial introduction of HIPs the government has decided to push ahead with the expansion of the scheme.  The Home Information Packs were originally scheduled to be introduced for all homes from 1st August 2007, but after a farcical u-turn in July only 4 bed houses were initially covered.

The original brief for HIPs was to find a way to improve the house buying process in England, not least to speed up the house buying system. However following an EU directive that all houses must have an Energy Performance Certificate (EPC) the government decided to add the requirement to the HIPs.  This would have worked had they no been forced to withdraw the Home Condition Reports (HCR) from the packs.  If you have a low tolerance for acronyms then  this whole matter could start sounding like double dutch (DD).

HIPs Being Introduced Gradually

Opponents to the introduction of HIPs had hoped that the government would take the staggered launch as a opportunity to review the whole matter and possibly make some positive changes.

Claims that an EPC will somehow help to reduce carbon emissions are somewhat strange given that the observations in the report are only advisory and carry no weight.  Not least given the age of most properties being bought and sold, it is strange to think that an Energy Efficiency Report will recommend that a listed building fits uPVC windows which is in direct opposition to listed buildings regulations.

HIPs can cost around £500 and take about 5 days to compile.  The finished report should include:

• Evidence of title
• Copies of planning, listed building or building regulations consents
• A local search
• Guarantees for any work on the property
• An energy performance certificate

One of the factors which delayed the initial introduction of HIPs was the lack of home inspectors, the government recently confirmed that there are enough inspectors to further expand the scheme.  So, it seems likely that HIPs will soon be required for all properties changing hands.

Apparently the plan is for a phased introduction of HIP's or Seller's Packs over the rest of the year, when the impact of the August introduction has been assessed. This has the potential to develop into a classic catch22 situation. HIP's and EPC's can not be fully introduced until there are enough qualified inspectors to carry out the job. Because of all the confusion over the introduction of [tag]Seller's Packs[/tag] the organisations responsible for the training and certification of inspectors has reported that new applications have dried up. Let's face it, who in their right mind would pay several thousand pounds for training only to be left in limbo?

Aside from the official line that HIPs will be required for all properties being marketed with four bedrooms or more from 1st August, very little else has been said about the future.  There is one piece of irony that should not be lost in all this mess. The Royal Institute of Chartered Surveyors (RICS) were the organisation who finally managed to stall the introduction of HIPs with the application to the courts for a judicial review of the way that EPC's had been introduced.  The irony is that RICS were one of the organisations who would have benefited financially from carrying out the training and induction of new inspectors. And, just to make life more interesting, hose reports issued after 1^st August will now be valid of 12 months instead of 6 months as originally intended.

So, what about this business of four bedrooms, is there a definition of a bedroom? Well actually no – Which means that theoretically there is nothing to stop someone marketing their property as a 3-bed house with study / computer room / dressing room.  The greatest penalty would probably come from the difficulty in marketing a 3-bed house with a 4-bed price tag.

What do you think? Did you put your property on the market to avoid the introduction of Home Information Packs?

Whilst recently there has been much talk about Home Information Pack training deficiencies, the debate over the value of [tag]Energy Performance Certificates [/tag]and the number of qualified Domestic Energy Assessors it should be remembered that campaigners have been lobbying against HIP's since they were first proposed in 2003. Many well qualified commentators have said that they whole process is such a mess that they can never come into force.

So what actually happened to cause the government to back down in such a dramatic manor, and at such short notice? The most damaging blow probably came last year when Home Conditions Reports (HCR) were removed. However the bill survived a late challenge from the Conservatives in early May, and was due to be debated again the the house of lords (although the outcome of that debate would not have been binding). The final and most deadly attack came from the Royal Institute of Chartered Surveyors (RICS) who mounted a legal challenge in the form of a judicial review. Faced with this, and emerging evidence that there were not enough Home Inspectors to carry out the task it would have been an act of madness to carry the scheme forward on 1^st June.

Spare a thought though, for the people who have invested considerable amounts of money in training to become Home Inspectors or Domestic Energy Assessors. Had HIP's gone ahead on 1^st of June for all properties on the market these people would be looking forward to a very profitable summer. Instead they are now in limbo, at best they can hope that they will be producing Energy Performance Certificates (EPC) for approximately 17% of the properties on the market.

What do you think about the introduction of Home Information Packs? Most importantly do you agree with the view that anyone who opposes HIP's is “anti-green”?

]]> http://www.property-funding.co.uk/29/hips-take-a-dive/feed/ 0 http://www.property-funding.co.uk/26/home-information-pack-pricing-details/ http://www.property-funding.co.uk/26/home-information-pack-pricing-details/#comments Mon, 30 Apr 2007 19:52:52 +0000 admin http://www.property-funding.co.uk/30/home-information-pack-pricing-details/ Some of the companies who have invested the most in the provision of Home Information Packs have started to release so of their pricing plans. LMS are believed to be the first to market with their offering. Their report will consist of an Energy Performance Report (EPC) and all the necessary local searches.

LMS's version of a Home Information Report will cost between £350 and £550 depending on the value of the property, plus an extra £75 for leasehold properties. Some of these packages will include access to systems such as Home Navigator which will allow homeowners to view satellite images of the area. As we get nearer to the start date for HIPs the competition is bound to heat up.

The original intention behind the introduction of  Home Information Packs was to speed up transactions within the UK housing market. The original idea would have seen the HIP include a Home Condition Report and Search details included by the seller when the property was put on the market. Two years later and the project looks a little watered down. In the summer of 2006 the Government had to concede that including the Home Condition Report (or basic survey) in the pack was not going to be viable, not least because the required 7,000 home inspectors could not be recruited and trained in time.

The Home Information Pack that will come into force this year looks a lot different to the original proposal.  The Home Condition Report has been replaced by the Energy Performance Certificate (EPC)  The EPC is intended to give consumers information about the energy efficiency of the property they intend to purchase.  Although this is a noble idea in itself,  it is difficult to see how it enhances the stated aims of the Home Information Packs, namely speeding up the house buying process.

So, from the 1st June 2007 sellers will be able to  market their homes as soon as the EPC and the key legal documents are provided. A HCR can be included if the seller wishes to commission one, but it is no longer compulsory.  Surprisingly, searches will not need to be included in the pack, they simply need to have been "commissioned".

A cynic may suggest that the biggest benefactor of the introduction of Home Information Packs will be Estate Agents, as they will naturally pick up most of the fees.  Considering that Estate Agents are the least regulated and least accountable parties involved in the house buying process (and also amongst the most complained about) it will be interesting to see how they perform.

Properties which go on the market before 1st June can stay "HIPs" free until March 2008, rather than the original October 2007 deadline, this was possibly intended to try and offset a surge in properties going on the market.

What do you think about the introduction of Home Information Packs? Are you intending to Market your property before the deadline?  Let us know what you think.

[tags]home information packs, hips[/tags]