HIPS – when will the politics stop?

publication date: Nov 18, 2009
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

I feel sorry for anyone dealing in HIPs. The idea is sound, have as much information as possible about a home before you make an offer, this way less sales are likely to fall through after the offer stage. But, even before they were introduced, the Royal Institute of Chartered Surveyors (RICS) mounted a legal objection, which was overcome. Now there is a major battle on with the Conservatives determined to scrap them if they come into power. Not only have they become a political football between Labour and Conservatives, they are also a dividing the property 'industry experts'.

What people don’t realise is if they do scrap HIPs, we are still likely to need the Energy Performance Certificate, so sellers costs won’t really be reduced. All that will happen is they will have less information to give to buyers.

All this is happening when poor sellers still have to pay out for them. What it ensures is that people buy the cheapest version, so there isn’t that much useful information in them. So when a good pack is produced, buyers ignore it, make their offers then realise too late, if they had read the pack they may not have made the offer in the first place. Meanwhile buyers'/sellers' agents etc., have all incurred unnecessary costs.

In my view, both the industry and politicians should concentrate on what needs doing to make them effective, rather than arguing whether we should have them or not – while they are a legal requirement.
Here’s the current HIPs arguments that are raging:-

1. The searches done by some local authorities (none in Notts, but Leicester has been implicated) aren’t compliant with regulations, ie they just aren’t accurate enough. So one organisation is advising companies NOT to buy from these local authorities.

2. Shadow housing minister Grant Shapps has said the Tories will scrap HIPs completely, but retain the need for an EPC.

3. A recent OFT report said they were struggling to police HIPs and that 24% of estate agents weren’t complying with the rules (eg having a HIP ready when the property is marketed or having the right information in the pack).

4.  Those that paid out for training to provide HIPs are looking to take the (government I think) to court over offers of work that haven’t come to fruition.

5. Exchange ready HIPs are possible, so that if the HIP is produced, then a buyer can just go ahead and buy, not wait for all the legal paperwork to be done.

The biggest complaint is that people have to ‘pay upfront’ for the HIPs, but they don’t. They can pay once the property is sold, or they can now even get a ‘no sale, no fee’ version.

This means all the thousands of people that trained to carry out HIPs and the companies that sell them, will lose jobs and work. Many of these are people that were in the forces and were sold these as good jobs. There is work out there for energy assessors, but because companies and the politicians are squabbling like children over HIPs, no-one is looking for a good alternative, upgrade or how to make sure that there is still work for the thousands of people that trained to do them.

In my view it’s pretty shameful all round and quite childish. It’s about time everyone put down their pea shooters and started to assess the pros and cons of HIPs rationally, like adults and come up with a solution that works for the industry as well as consumers.

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