Will Hips Help?
Will Home Information Packs see the light of day?
If you're a homeowner you will no doubt be watching the launch of the Government's Home Information Packs (HIP) with interest. Anyone selling his or her property from 1 June 2007 will need to prepare a pack, which at £450 is not cheap. But are they worth the effort?
Well a number of people apparently believe not. Indeed, the Council of Mortgage Lenders (CML) is amongst those that have criticised the packs. And let's face it: since the Government has made the Home Condition Report an optional requirement how useful are they to a buyer?
One of the main criticisms has been concerning the energy efficiency report, which now forms the key part of the packs. A trained Energy Assessor will be appointed to check how well insulated your home is and how efficient your gas boiler is. However, recent reports in the news have alleged (amongst other things) that there won't be enough people suitable trained to carry out the assessments required.
Now the Association of Home Information Pack Providers (AHIPP) has come back fighting, alleging that "recent lies surrounding HIPs are untrue, indefensible and a feeble attempt to misinform the public for private gain".
Points it has raised include:
1. Domestic Energy Assessors (DEA)
Although it has been reported that there will not be enough qualified DEAs, come June (it's been estimated that 2,500 are required) AHIPP has claimed that 1,000 are already trained, and a further 2,200 will be trained by June.
2. Estate Agents will rip-off the public
Although HIPs which don't include the Home Condition Report are estimated to cost around £450, many reports have claimed that estate agents will charge more than this (up to £1,000!) in an attempt to make some money.
AHIPP's response here was to say that HIPs will cost between £300 and £500, including the cost of the energy performance certificate, and sellers will not have to pay this upfront. Market forces should keep the pack prices competitive, and consumers and estate agents should only purchase HIPs from HIP compliant suppliers. Any agent with any involvement with HIPs will have to join a statutory redress scheme which will offer considerable additional protection for the consumer.
3. HIPs will impact negatively on the housing market
Many fear that the introduction of the packs will have a negative impact on the housing market, and a large number of people may be planning to put their homes on the market early in a bid to avoid needing one (and distort the market).
However, AHIPP reckons the packs will reduce the number of transactions that fall through, saving consumers time and money. And while selling early may distort the market slightly, July and August are quieter months anyway, so there should be little impact over the year as a whole.
The energy performance certificate does appear to have grown in importance -- especially when you realise that it didn't even exist when the packs were first mentioned ten years ago. And whilst I can see the usefulness of knowing how energy efficient a home is, are many buyers really going to pay the report that much attention in reality? Indeed, without a survey how useful will the pack be to buyers and how much time will they save at all? Will sellers simply be throwing their money away? We'll have to wait and see.
What's more, I spoke to one estate agent who told me his firm were thinking of charging £700. I feel sure there won't be many agents setting their HIP fee at the lower end of the scale, whatever AHIPP say. Agents will always find an excuse for increased costs, and apathy means that a good number of us will simply pay.
Any Fools needing a pack come June should remember to do their own research and compare prices carefully. You may just find you could save a couple of hundred quid by creating your pack privately -- apply for the searches yourself and pay a DEA to rate your property's environmental efficiency. And whilst this may not seem like much money when you're spending thousands on Stamp Duty, etc, it's still worth saving -- especially if by tacking this cost onto your mortgage you could be paying interest on it for 25 years.