Home Information Packs – benefiting consumers
The Government today announced a package of measures to help ensure consumers are seeing the vital information in Home Information Packs and are receiving a higher standard of service in the home buying and selling process.
The new measures include: developing a new set of standards with industry on what consumers should expect from property professionals in the home buying and selling process; further building on the quality of information in the packs; working with industry to ensure that consumers are fully seeing and benefiting from the HIP, including the EPC, early in the process; extending until the end of the year the provisions enabling consumers to market their home as long as they have ordered and committed to pay for a HIP, and the provision requiring the lease to be included in the HIP for leasehold properties.
The latest figures on HIPs show that consumers are already benefiting from the introduction of Home Information Packs. More than 700,000 homes now have energy ratings as a result of HIPs, helping home owners to save money on their fuel bills and cut carbon emissions. Greater competition in the property searches market is also leading to reductions in costs with some local authorities reducing their search fees by up to £120.
Housing Minister Caroline Flint said:
“Home Information Packs are already bringing benefits to consumers. Property search costs are falling and new information on energy efficiency can help cut carbon emissions and enable prospective purchasers to get a better idea of the likely costs of energy bills.
“But we want to do more to improve the HIP and the home buying and selling process for consumers. Developing a new set of standards for industry is an important next step in further ensuring all consumers get the highest quality of service when buying or selling a home. We also want to ensure all consumers are seeing the vital information in a HIP early in the process so they can fully benefit.
“Alongside the development of a new industry code, we will continue to work with the industry to promote higher and consistent standards of practice on the delivery of HIPs.”
Today’s announcement includes:
Work to develop a new set of standards for industry involving leading bodies such as the RICS, NAEA, and the Law Society. This aims to bring together best practice within the industry into a single set of standards that all consumers can expect from property professionals in the home buying and selling process, including redress arrangements, the provision of Home Information Packs and delivery of local searches.
Work with the industry to ensure that agents and HIP providers understand and act on the requirement to prepare the HIP as soon as the EPC is produced, so that it is available to potential buyers early in the process.
Develop in partnership with the property professionals, the means for capturing consumer friendly information for inclusion within the HIP, such as property fixtures and fittings, access and boundries. This will draw on the lessons learnt from our Area Trials.
New regulations coming into force for new homes
he Housing Act 2004 (Commencement No.11) (England and Wales) Order 2008 was made on 13 March and comes into force on 6 April 2008. This completes the application of HIPs to all new build properties. The HIP duties currently apply to all types of property sale, including the sale of new homes but excluding homes built under the most recent Building Regulations (i.e. Regulation 17C of the Building Regulations 2006). We have previously announced the intention to extend the HIP duties to these properties from 6th April, when the requirement under the 2007 EPBD Regulation for all new homes to have a SAP-based EPC on construction come into effect, and the Order achieves this.
Key facts
From the 6 April 2008 all new homes will require an EPC and Recommendation Report when physically complete.
The EPC will be based on the SAP rating which is currently required to comply with Building Regulations. This demonstrates that new homes meet the targets for energy performance that are part of the Building Regulations.
The EPC must be produced by an Energy Assessor who is accredited for On Construction Energy Assessment. The EPC is based on SAP rather than RdSAP which is used for existing homes.
When the home is physically complete, an EPC should be produced and given to the owner of the home. Building Control will not issue a completion certificate until they are sure this has been done.
If you are marketing a home off-plan, you will need to have a PEA (Predicted Energy Assessment) in the HIP to provide to potential buyers. Once the home is physically complete the PEA in the HIP should be replaced with an EPC and Recommendation Report.
PEAs should be based on the predicted SAP rating for the home. This will be available from calculations done at the design stage and is a number between 1 and 100. A spreadsheet template is available to be able to represent the rating in a graphical form for potential buyers.
Each building within a development will require its own EPC (although reports can be cloned for identical dwellings and will not need to be inspected individually).
Hips reduce speculative marketing
The government’s home information pack scheme (Hip) scheme has begun to make an impact on the property market, with a fall in the number of speculative sellers in decline.
According to AA Legal Services the Hip scheme has “undoubtedly reduced speculative marketing” – potentially to the benefit of the market.
“Hips naturally focus the mind of the seller before marketing their property,” said James Molloy, product manager for AA Legal Services.
“We hope that now only those who have a genuine, considered desire to sell their property enter the market at the front end, and Hips have undoubtedly reduced speculative marketing.”
Hips were made compulsory for all properties from December 14th, completing a three-stage rollout process.
And their impact is likely to be positive in the long term, according to the AA.
“There are many commentators who will argue that speculative rather than deliberate marketing provides for fluidity of supply in the market that ‘oils the wheels’ of the property market, and that view undoubtedly has some merit.
“But it is also true such lack of commitment has contributed to, in my view, an unacceptable level of aborted transactions in the pre-Hips era,” explained Mr Molloy.
Before the scheme was introduced as many as one in three property sale chains were broken, according to the Financial Times.
This may, now, be about to change.
“It will ultimately be for economists to provide the fullest answer, but my view is that where we see a reduction in broken chains, a large contributing factor is the introduction of Hips,” concluded Mr Molloy.
AHIPP comments on the Communities and Local Government Annual Report released today
Mike Ockenden, Director General, Association of Home Information Pack Providers (AHIPP), comments on the Communities and Local Government Annual Report released today:
“The CLG Select Committee report issued today clearly supports the message that AHIPP consistently emphasised over the latter months of 2007- that the roll out of HIPs could have happened far quicker than actually occurred. We cannot change the past, however and with HIPs clearly not having the detrimental impact on the market that many forecast, it is time to move on.
“Now that the full roll out is completed, we look forward to working with Government and other stakeholders on improving the pack to make it ‘exchange ready’. This means that a buyer who has an offer accepted can pass the pack to his or her lawyer who can rely on the contents and move quickly to exchange of contracts.
“In particular this must include making the Home Condition Report (HCR) mandatory. Ministers have repeatedly said that if the voluntary take up of HCRs is not effective then it remains on the table to make them mandatory. HCR take up has been minimal on a voluntary basis and Ministers now need to deliver on their assurance to make them mandatory within a HIP.”
Roll-out of Hips puts properties on the market
Buyers rushed to beat the introduction of Home Information Packs (Hips) as more and more properties came onto the market before the December 14th deadline, it has been claimed.
The latest research from the National Association of Estate Agents (NAEA) has revealed that the number of properties on agents’ books during November had increased.
Members of the organisation reported an average of 77 properties for sale in November, compared with 65 in October.
However, the number of sales agreed per agent was down in November, on average nine sales were reported per agent compared with ten during October as the festive slowdown continued.
First-time buyers increased their share of the market from 9.2 per cent in October to 10.1 per cent during November as more suitable properties have come onto the market as sellers looked to conclude a deal before the full roll-out of Hips.
Stewart Lilly, NAEA president, said: “The market place over the past year has certainly been turbulent. Increasing interest rates, the global credit crunch and the phased implementation of Hips have all had an unsettling effect.
“However, it now seems that there is some light at the end of the tunnel. While it is likely that prices will remain static in 2008, the potential for further interest rate decreases will fuel consumer optimism and hopefully help to restore confidence in the market,” he added.
Energy Performance Certificate – The Home Information Pack
According to the new law which would be introduced in April 2008, all the commercial buildings that are above 500sqm would need to get an Energy Performance Certificate. The certificate states the energy efficient of your home. The ratings are given on a scale of A to G where ‘A’ rate is given to the residence with the highest efficiency while the homes with the ‘G’ rating have the lowest efficiency.
The Energy Performance Certificate also helps you to know the impact your house may be having on the environment. The homes with good energy efficiency do not pose a threat to the environment while a residence with low energy efficiency has adverse effect on the environment. This is because the latter would emit a lot of carbon in the atmosphere.
If you are buying or selling a house then you need to get a home information pack. This home information Pack would consists of important documents and other useful information for the buyer and the seller. These Home Information Packs includes the Energy Performance Certificates, information regarding the property and other useful documents.
If you are selling a property to someone then you need to provide the new buyer with the Energy Performance Certificate. You can contact an accredited Energy Performance Certificate specialist who can analyse the property and provide you with the certificate. For this you can contact Wilbourn Associates who are the leading environment consultants in UK. They have the required accreditation and would help you in obtaining the certificate.
The Energy Performance Certificate assessors would survey the property and pay detailed attention to the factors that affect the energy efficiency. These factors would include the lightening, boiler system, air-conditioning system and other such factors. The information thus collected would be inputted in the computer. The computer would evaluate this information and give a report based on it. This report would carry information about the energy efficiency of the house. The Energy Performance Certificate advices you on making certain improvements also by which you can conserve more energy.
The Energy Performance Certificate would also carry the date, location and the construction details of the house. It would also include the information regarding the fittings used in the house.
The Energy Performance Certificate is important as it helps us to keep a check on the level of energy consumed. It will include some suggestions for the resident that can help him to control the amount of energy consumed. These suggestions and advice are also helpful as it would help you to keep a tab on your electricity bills also. Thus, if you need assistance in obtaining an Energy Performance Certificate, you can contact Wilbourn Associate at www.environmental-surveyors.com who can help you with it.
Hidden costs in “free” sole-agency Hips
Following the full roll-out of Home Information Packs (Hips) last week, the BBC’s money Box programme has pointed out that house sellers who sign up for a free or discounted Hip with their estate agent could be liable for a charge, if they withdraw their property from the market or change agent.
Estate agents maintain that the charges, which are frequently between £400 and £500, reflect the costs that have been incurred in preparing the Hip.
However, the average price most vendors are being charged for the packs is between £300 and £400 for a freehold property.
According to the moneybox programme, one estate agent was offering a HIP for around £200 in return for sole agency, but an additional fee of £300 to £400 would be charged if the property was withdrawn from the market or placed elsewhere.
AHIPP, the home information pack providers’ group, believes that the fees being charged by estate agents are justified and Trading Standards has confirmed that estate agents are free to set their own withdrawal fees, as long as the client is aware.
The Estate Agents’ Ombudsman has stated that any vendor whose estate agent has not listed the pack as having a separate fee in the agency agreement may not have to pay a withdrawal fee.
Peter Bolton King, the chief executive of the National Association of Estate Agents believes that the fees should be proportionate and not be used as a profit making device.
HIPs get full roll out
Home information packs (Hips) will be required for all properties being sold in England and Wales from 14 December, the government has announced.
Since September, all properties with three or more bedrooms have required a Hip before they can be sold.
The packs have proved controversial, with many critics claiming that they have made it more difficult and expensive to sell property.
The government insists the packs are bringing benefits to consumers.
The average cost of a Hip is between £300 and £350.
Green rating
Housing Minister Yvette Cooper said the roll-out of Hips would help first-time buyers by providing them with more information.
Energy performance certificates (EPCs) will give homes an efficiency rating of A – G.
Buyers whose homes score badly will receive extra help from the new Green Homes Service announced this week by the prime minister.
“Hips and EPCs are already helping consumers to save hundreds of pounds off their fuel bills and are cutting search costs too,” said Ms Cooper.
“All home buyers will be able to benefit from energy efficiency advice, with those receiving low green ratings of ´F´ and ´G´ especially targeted for support and grants,” she added.
For the Conservatives, shadow housing minister Grant Shapps criticsed the decision, saying it would make buying and selling houses “more costly and bureaucratic”.
“This latest move will dismay hard-working families, because it increases instability in an already fragile market,” he said.
“Rather than burdening people with yet more red tape, Gordon Brown should have the courage to abolish what is widely regarded as a flawed and ineffective law.”
Leasehold problems
The decision to extend Hips to all properties follows an independent review carried out by Europe Economics.
This found “no evidence of any impact on transactions or prices” beyond a “predicted” and “marginal” short-term impact on new listings.
The report also concluded that any delay to the planned roll-out due to “changing housing market conditions” would cause “greater market difficulties and uncertainties”.
But the government acknowledges the owners of leasehold properties have faced difficulties.
In some cases it has been difficult to obtain leasehold documents quickly, and “disproportionate charges” have on occasion been requested.
At the moment sellers must commission a Hip before they can put their property on the market, but have a 28-day window for it to be finalised.
The government has now said it will extend for six months the current exemption which lets leasehold documents be provided after the 28-day deadline.
It will also delay the introduction of new rules meaning a property cannot be put on the market until the Hip has been completed.
This change had been due to take effect on 1 January 2008, but will now not apply until 1 June 2008.
´Between a rock and a hard place´
The government´s decision to extend Hips has been criticised by the Royal Institution of Chartered Surveyors (Rics).
Rics and the National Association of Estate Agents (NAEA) believe the introduction of Hips has already reduced the number of larger properties on the market.
Rics housing spokesman Jeremy Leaf argues widening the scope of the scheme will have a negative effect on those people trying to get onto the property ladder.
“Rolling Hips out to one and two-bed properties could find first-time buyers caught between a rock and a hard place as accessibility to the market would go off the scale,” he said.
“If the Housing Minister genuinely wants to improve the plight of first-time buyers, she should not continue with this flawed policy,” he added.
But the extension has been welcomed by the Association of Hip Providers (AHIPP).
“The independent research by Europe Economics dispels suggestions by RICS and NAEA that Hips are having a detrimental impact on the market place,” said AHIPP deputy director
Delay to ‘First Day Marketing’ deemed necessary
Paul Broadhead, Deputy Director General, Association of Home Information Pack Providers (AHIPP), comments on the speculation surrounding ‘First Day Marketing’ of Home Information Packs (HIPs):
“I remain confident that we will see Home Information Packs (HIPs) extended to one and two bedroom homes by the end of the year.
“If the Government were to extend ‘First Day Marketing’ past 1st January 2008, for a limited period, this would seem a sensible approach, whilst the fully rolled out system beds down. However, this should only be a temporary measure. For HIPs to do their job properly, all the information must be made available to potential buyers from the offset.
“In the long term, rather than halt house sales, HIPs will aid the house buying and selling process, ensuring a more efficient and more transparent system for all involved.”
AHIPP comments on the warning from RICS
“The latest HIP allegations from RICS appear to have disregarded the many benefits that the packs will offer first time buyers – the most vulnerable of buying groups. With more information upfront and the costs incurred in gathering and providing information such as searches transferred to the seller, first time buyers will find their first step onto the housing ladder a more affordable and more informed one.
“What RICS appear to have forgotten is that first time buyers stand to benefit the most from the introduction of HIPs. With the vendor responsible for acquiring the HIP, costs will be eliminated and buyers will be able to make a more informed decision from the offset.”
“Research amongst our own Estate Agency members suggests that whilst the supply of property on the market is lower than usual at this time of year, the actual stock on Estate Agents books is not. This would suggest a lack of buyers in the market place, and as most buyers are sellers they are unlikely to put their home on the market if they are not thinking of moving.”
“I would urge the government to listen to independent commentary from the UK’s largest Mortgage lender who last week commented on the continuing downward trend since the end of 2006, and to economists that sit on the Bank of England Monetary Policy Committee that make no mention of home information packs contributing to the current market slowdown.”