Lack of HCR weakens HIPs
In its Fifth Report, the Select Committee on Merits of Statutory Instruments has concluded (amongst other things) that: "...without HCRs as a mandatory element of HIPs, HIPs might imperfectly achieve their policy objective"
The function of this committee is to outline areas of possible concern which may be worthy of further scrutiny in the House of Lords.
The report also attaches the written views of industry representatives from which it has considered in its conclusions.
Lots of points are raised, here are some that caught my attention.
13 years for EPCs on all homes
On the Energy Performance Certificate (EPC), the Council of Mortgage Lenders (CML) claim it will take more than 13 years before all homes have them undertaken - I suspect that is a little on the conservative side but it does beg the question as to how long the career of a DEA might last!
...delivering EPCs through HIPs means it will take more than 13 years before all home owners have received one.
CML response - Merits of Statutory Instruments - Fifth Report
They also propose an alternative route to market for the EPC:
We believe that a possible solution would be for HIPs providers to market a de-coupled EPC product that would enable home owners to access both the current rating of their dwelling and the cost of effective improvements report that could guide their investment at any time throughout their ownership of the property.
Er... is there anything that prevents that from happening anyway?!
HIP impact impossible to assess
To anticipate next year's inevitable protestations, it might be worth making a mental note of something else the CML state: "An expected decline in property sales next year will make it virtually impossible to assess the effect on the housing market".
The HIP Trap
Michael Garson - a practicing Solicitor and chair of the Law Society Property Section as well as elected member of the National Association of Estate Agents - come out all-guns-blazing against the current HIP implementation. But he does make some very valid points.
In addition to lucidly highlighting the lip service paid by Government to the various promises made along the way (which are too lengthy to go into here), he hits on something I've been recently banging on about; the Home Information Pack trap:
There is another threat yet to materialise and this is the impact of the HIP in a falling market where both the seller (strapped for cash) and lenders (needing to foreclose) require a pack and there is tension or conflict over the type of pack required and its cost with the potential to affect the price achieved and timing of the sale. This has yet to be considered.
Incomplete HIPs and "unregulated providers"
He also claims that: "In many cases transactions proceed to exchange without a pack being complete because of delays or because unregulated providers put processing work on hold so as to avoid expense."
Whether this is because of the recent low-cost HIP providers entering the market, is not stated (although possibly implied?), it's nevertheless worrying.
HIP providers not helping conveyancing process
The Law Society echoed a concern voiced by Peter Ambrose (The Partnership Ltd) on this week's podcast and which (again) alludes to the low-cost HIP providers:
...although provision was included to permit a legal opinion on the property, it is clear for a number of reasons that very few HIP providers are able or willing to include such an opinion.
It also goes on to say that because some HIP providers are literally complying only with the absolute minimum requirement needed to market a property, they contribute next-to-nothing to the conveyancing process:
The result is that HIPs are at present limited to the marketing of a property (i.e. the statutory requirement that has to be complied with in order to advertise a property for sale) and are not a significant or indeed almost any part of the formal conveyancing process which for the time being is continuing much as before.
Tags: hips, government
