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ADDED 26/03/07

Budget brings further HIPs uncertainty


Having been refused a meeting with housing minister Yvette Cooper, property industry representatives have stepped up their campaign to have introduction of home information packs delayed.

The group, made up of the National Association of Estate Agents, Royal Institution of Chartered Surveyors, Council of Mortgage Lenders, and the Law Society, argue that introduction of HIPs will disrupt the housing market and could have wider economic repercussions.

As it stands, from 1 June all homeowners will have to prepare a home information pack, including deeds and an energy performance certificate, before they can legally market their property.

‘We support the government in their policy objectives, to improve the home buying and selling process, and are prepared to work with them on this. However, it is clear that there is considerably more work to be done if HIPs are to be a workable solution, and there is simply not enough time for the issues to be resolved before the 1 June’, said NAEA president Charles Smailes.

‘In their current format, HIPs will prove to be ineffective and vastly impractical’.

Meanwhile the Royal Institution of Chartered Surveyors has spotted what it believes to be a change of policy on Energy Performance Certificates. The Budget Report said these would give all homes an energy efficiency rating ‘at the point of sale’. Previous statements would have required an Energy Performance Certificate to be made available at the point of marketing for residential property, said RICS when welcoming the change.

’RICS has campaigned for Energy Performance Certificates to be made available at the point of sale, rather than the point at which it is put on the market by the seller. This represents a major u-turn in Government policy as they have previously reasserted their commitment to the provision of an EPC at the point of marketing’.

According to the Conservative Party the Budget has thrown introduction of HIPs into ‘disarray’.

‘Buried in the Budget's detail the Chancellor has declared that the Energy Performance Certificates - the remaining keystone of HIPs - no longer need to be provided when properties are marketed’, said Shadow Housing Minister Michael Gove. ‘This announcement undermines the approach Ruth Kelly's Department has been taking for the last 12 months. The Chancellor also indicated that while HIPs could be introduced 'later this year' he gave no undertaking to stick to the 1 June launch date.

‘Conservatives have been pressing for a complete overhaul of the system, and following the Chancellor's statement the Government's plans are in disarray. Thanks to Gordon Brown's record of high handed interventions over the heads of cabinet ministers we are now left with a confused situation which is the last thing the housing market needs. The truth is that HIPs won't help people struggling to get on the housing ladder or make the process of buying a home any less stressful’.

The Association of Home Information Pack Providers has written to Ruth Kelly ‘offering the strongest of reassurances that it is ready to deliver HIPs effectively and efficiently as of the 1 June’. The AHIPP letter, which was signed by over 100 industry members and backed by thousands of individuals, was sent to dispel in particular, a number of myths raised in recent statements, said the association.

Any market impact due to the introduction of HIPs is likely to be ‘minimal and short lived’, it claimed.

‘There is general agreement across the industry that there may be a slight increase in listings in May this year as estate agents encourage homeowners to list their properties before they are required to have a HIP from the 1 June. This may generate a small overhang of property listings, although this is unlikely to be substantial due to the fall in properties coming on to market at the present time.

‘The suggestion that HIPs will deter sellers from entering the market because of cost was deemed as "frankly absurd". The overall cost of a single transaction today runs to over £5,500, and a HIP with an EPC will increase this by less than £200. In fact, overall there is likely to be no cost increase to the homeowner as HIPs will help to drive out the cost of failed transactions from the market’.


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