At the beginning of its life the HIP was a bit of a joke, a constant target for derision and a football for political parties to kick around with whenever housing issues arose and goals needed to be scored. It was easy then as the property market was in decline and property experts found it convenient to apportion blame in the direction of the HIP.
One of the big problems then was the lack of knowledge of the product and the tendency we have in this country to resist and reject ‘change’. Added to this was a far larger problem and one that I believe may deter future government from making any further attempt to reform the home buying and selling process. I am taking here of the vested interest that runs throughout the property industry and which is so strong and cancerous in its application.
The current Government is often criticised for the poor way in which it implemented the HIP legislation. There is no denying that the Government did little to endear the public to the HIP by launching the HIP in such a shambolic way, however give credit where credit is due, this was a government looking to make change to the home buying and selling process that was last changed back in 1925!
Implementation and the way this unfolded should also be viewed against a backdrop of stakeholder discontent that was best illustrated by the unprecedented, and perhaps politically motivated, legal action taken by RICS. Unhappy about the introduction of energy assessors and of how this was going to impact on the residential faculty within their membership, RICS decided to challenge Government and the will of the legislative by claiming Government has not consulted adequately on the ‘gold plating’ of the Energy Directive. Though the action was probably from a technical point of view justified it was clear that RICS by not having exclusive control over the delivery of the home condition report (which incidentally they do in Scotland) was determined to derail the HIP.
A classic and destructive example of the way in which vested interest can work to challenge well intentioned reform and reform that was aimed at making the home buying and selling process more transparent for the benefit of the consumer.
So what has changed and why will the HIP survive?
To begin with market conditions have changed. More property is coming to the market, which has made it more difficult for the HIP to be used by anti-HIP proponents to point at it as a credible cause. More importantly however is that the benefits of the HIP are beginning, with increased volumes to be noticed, by both consumer and property professionals. The HIP has never really had a chance to prove itself until now. More and more estate agents are beginning to see the true worth of the HIP with faster transaction times and a reduction in aborted sale transactions. In the ‘bad times’ agents cried out for the return of the speculative seller. There was no logic, just desperation given the grim picture most agents faced. But now they are busy, properties are selling and with the added benefit they are making extra revenue on the back of the HIP. A ‘win, win’ situation.
This had a knock on effect as agents seeing the importance of the role of the HIP within their businesses are beginning to take the time to explain the purpose of the HIP to their customers and this in turn is helping the HIP gain a better image with consumers.
The shift in the way the HIP is viewed is not just my view. In recent months we have had the OFT releasing the results of a survey of consumers and concluding when looking at the HIP that on balance the view was that it should be retained. This was then followed by an open letter from the National Association of Estate Agents who stated that they saw the HIP regulations as providing protection to the consumer.
There is still sometime to go before other stakeholders climb off the fence and declare their views. This is understandable as many do not wish to blot their copybook with Grant Shapps given the possibility he may be the next housing minister.
I am sure however that if we do have a Conservative Government that these stakeholders will during consultation view the HIP in a different light given improved market conditions and the undoubted fact that the HIP is now fast becoming an accepted part of the home selling and buying process. Many stakeholders, whether they are estate agents, lawyers, energy assessors, surveyors are all beginning to see the benefits of the HIP and are acknowledging that it would be a backward step to scrap. The importance now is for these professionals to get this message through to those who run their trade associations and to make sure their voice is heard over and above the political will that often moulds policy.
Talk of adding cost to the process and of the HIP presenting a barrier to selling is no longer credible and with the consumer becoming increasingly aware that sale costs will rise if the HIP goes, it will take a brave (or misguided) political party to continue to view the HIP as a ‘vote winner’.
One of the big problems then was the lack of knowledge of the product and the tendency we have in this country to resist and reject ‘change’. Added to this was a far larger problem and one that I believe may deter future government from making any further attempt to reform the home buying and selling process. I am taking here of the vested interest that runs throughout the property industry and which is so strong and cancerous in its application.
The current Government is often criticised for the poor way in which it implemented the HIP legislation. There is no denying that the Government did little to endear the public to the HIP by launching the HIP in such a shambolic way, however give credit where credit is due, this was a government looking to make change to the home buying and selling process that was last changed back in 1925!
Implementation and the way this unfolded should also be viewed against a backdrop of stakeholder discontent that was best illustrated by the unprecedented, and perhaps politically motivated, legal action taken by RICS. Unhappy about the introduction of energy assessors and of how this was going to impact on the residential faculty within their membership, RICS decided to challenge Government and the will of the legislative by claiming Government has not consulted adequately on the ‘gold plating’ of the Energy Directive. Though the action was probably from a technical point of view justified it was clear that RICS by not having exclusive control over the delivery of the home condition report (which incidentally they do in Scotland) was determined to derail the HIP.
A classic and destructive example of the way in which vested interest can work to challenge well intentioned reform and reform that was aimed at making the home buying and selling process more transparent for the benefit of the consumer.
So what has changed and why will the HIP survive?
To begin with market conditions have changed. More property is coming to the market, which has made it more difficult for the HIP to be used by anti-HIP proponents to point at it as a credible cause. More importantly however is that the benefits of the HIP are beginning, with increased volumes to be noticed, by both consumer and property professionals. The HIP has never really had a chance to prove itself until now. More and more estate agents are beginning to see the true worth of the HIP with faster transaction times and a reduction in aborted sale transactions. In the ‘bad times’ agents cried out for the return of the speculative seller. There was no logic, just desperation given the grim picture most agents faced. But now they are busy, properties are selling and with the added benefit they are making extra revenue on the back of the HIP. A ‘win, win’ situation.
This had a knock on effect as agents seeing the importance of the role of the HIP within their businesses are beginning to take the time to explain the purpose of the HIP to their customers and this in turn is helping the HIP gain a better image with consumers.
The shift in the way the HIP is viewed is not just my view. In recent months we have had the OFT releasing the results of a survey of consumers and concluding when looking at the HIP that on balance the view was that it should be retained. This was then followed by an open letter from the National Association of Estate Agents who stated that they saw the HIP regulations as providing protection to the consumer.
There is still sometime to go before other stakeholders climb off the fence and declare their views. This is understandable as many do not wish to blot their copybook with Grant Shapps given the possibility he may be the next housing minister.
I am sure however that if we do have a Conservative Government that these stakeholders will during consultation view the HIP in a different light given improved market conditions and the undoubted fact that the HIP is now fast becoming an accepted part of the home selling and buying process. Many stakeholders, whether they are estate agents, lawyers, energy assessors, surveyors are all beginning to see the benefits of the HIP and are acknowledging that it would be a backward step to scrap. The importance now is for these professionals to get this message through to those who run their trade associations and to make sure their voice is heard over and above the political will that often moulds policy.
Talk of adding cost to the process and of the HIP presenting a barrier to selling is no longer credible and with the consumer becoming increasingly aware that sale costs will rise if the HIP goes, it will take a brave (or misguided) political party to continue to view the HIP as a ‘vote winner’.
It's a mystery to me why Estate Agents are so 'anti' and derisory of the HIP because when they arrange one via a HIP provider for a client they double the cost!!
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