Grant Shapps: New Year, Same Old Story!

Entering a New Year seems to have had little effect on the determination of Grant Shapps and his team to plunge their knife deeper into the flesh of the Home Information Pack industry. In the latest communication emanating from his office (one sent in response to an increasing number of letters and e-mails that are sent to him on this topic) Shapps acknowledging that the HIP has not, due to the recession had the best of starts, now begins to turn his focus on the so called ‘cost burden’ of the HIP:

‘Compulsory HIPs have created an additional £650 million burden on an already beleaguered housing market. It is fair to say that the lack of credit availability and paucity of capital seen in the last 18 months has been unprecedented so it's true that the introduction of HIPs could not have come at a worse time but additional and unnecessary burdens should not be tolerated merely because maintaining the status quo is the simple option’.

It is unclear where this £650 million figure comes from and one can only guess it is calculated with reference to the retail cost of the HIP. If this is correct then it begs the question has his office actually undertaken a survey to ascertain the average cost of the HIP and to compare this with the cost of home selling and buying both prior to and post the introduction of the HIP?

In a recent article in which Shapps was quoted the price of a HIP was stated as being £400! Just shows how far off beam he and his officials are, as we all know that the average cost of a HIP is more in the region of £250, if not lower.

His office should also be asked to consult with conveyancers and search providers before making comments of this sort. It’s a shame the Shadow Housing Minister and his researchers find it is a chore to do some ‘home work’ before putting pen to paper. If contacted most conveyancers and search providers would say that the cost of the sale and purchase of a home has since the HIP was introduced fallen by around 40%. This is due to an increase in personal searches and the beneficial impact this has had on prices.

More fundamentally the statement that the Hip has cost the consumer £650 million pounds extra is nonsense. Apart from the energy performance certificate, the HIP places no additional cost onto the consumer. All the other components comprise of information and documents that the consumer would need, and be required to pay for, with or without a HIP.

Not content with quoting one wholly misleading figure, Shapps Office then moves onto the money it claims will be saved by the abolition of the HIP and which could then be used elsewhere within the economy. His office claims:

‘The housing sector and the wider economy will benefit from the £350 million a year boost that scrapping HIPs will bring and Grant is committed to delivering that much-needed shot in the arm by keeping the Party's promise to abolish HIPs as soon as possible should Conservatives win the forthcoming General Election’.

As before, the brandishing of a figure without any data to back it up is not helpful. One can only again make an educated guess that this relates to the cost of maintaining the scheme, covering for example, the cost of promotional material and enforcement.

To claim if the HIP is removed this money would be free to be used elsewhere is disingenuous in the extreme. The cost would not be saved as there would still need to be funding to support the energy performance certificate that the Conservatives say they will retain. There is unlikely to be little difference in funding a HIP with an EPC included and an arrangement where the EPC is liberated and operating alone.

The figure of £350 million is in any event more than justified when one looks at the 28% sale transaction failure rate that cost consumers £1 million each day before the HIP was introduced.

Yet again we see different and varying reasons emerging from Shapps Office indicating a lack of cohesion and uncertainty. No longer is there mention of the HIP ‘stifling’ the property market and of the urgent need to suspend the legislation. The current line of response is to throw meaningless figures into the arena in the hope these will cause further confusion and lead to consumer support.

Surely the time has now come to accept that the HIP has benefits and to adapt rather than scrap is the only way forward. It is important for us all to make sure the Conservative Party is reminded of this and to maintain communication along these lines with Shapps Office and local conservative MPs or prospective conservative candidates.