The HIP Reform Group’ draft proposal for Reform – ‘New Year, New Start’ (CLICK HERE), has it is pleasing to report, prompted positive comment and support.
The proposal that advocates the early engagement and instruction of an ‘Advisor’ and for information and documents to be available for delivery to the buyer within 28 days of the first day of marketing, has received widespread coverage, and apart from some expected negative commentary, mainly from anonymous sources, the idea seems to be hitting the right buttons.
One response that is perhaps worthy of particular note is from a conveyancer who took the time to write into the solicitors’ periodical – The Law Society Gazette (CLICK HERE).
The contributor beginning with a reference to Grant Shapps intention to abolish home information packs opened his letter by saying:
‘……….we must encourage the seller to instruct solicitors early in the selling process, which is still not happening despite the good intentions behind the HIP. Ideally the solicitor needs to get on with the ‘completion-ready’ pack before a buyer is found'.
He added:
‘We need to educate the public to understand the process and to instruct lawyers when the house goes on the market. We know of course that sellers are reluctant to incur costs before a buyer is found, so it will be an uphill struggle to change attitudes’
There are all good points and all very much in line with the theme of the HRG proposal. It is, as most supporters of the HIP will tell you, important to promote full and early disclosure of information and documents, as well as greater transparency for the consumer. The ‘smoke and mirrors’ surrounding the home selling and buying process serves no purpose, other than self interest, and must be removed.
The Property Information Questionnaire introduced back in April 2009 was a step in the right direction that clearly encourages the seller to be more involved in the process and to ask questions about procedure that were perhaps not asked too frequently beforehand.
Many consumers still find it difficult to ask their lawyer questions, some fearing it will add to the cost, whilst others find their lawyer unapproachable or too busy. Many lawyers run large caseloads in an effort to make their conveyancing practices profitable, and therefore do not have the time to engage with their clients as much as they would like.
Energy Assessors often say they are asked about the selling and buying process and to explain the purpose of the home information pack. Once explained and with a better understanding the seller acknowledges the benefit of delivery of upfront information and goes away feeling more involved.
Back to the letter and the part where the correspondent accuses pack providers and other involved in the industry of ‘hijacking’ the HIP. He claims:
‘HIPs were certainly hijacked by interested parties. These people were not lawyers and, as we now know, HIPs were introduced with little regard for the views of the legal profession. Sadly the product fails to serve anyone in the conveyancing process other than those who hijacked it. Only the energy certificate should be required at the marketing stage, although even that is of little value’.
Sorry, but this makes little sense. The legal profession was, and remains, better placed than most to adopt and run with the home information pack and use it as what has clearly been shown, by many other lawyers, to be a powerful and effective marketing tool.
Apart from the EPC, the HIP comprises of legal documents and information. Who better to deliver this than a lawyer!
Many lawyers like myself toured the Country before and after the introduction of the HIP, speaking to large groups of lawyers and stressing the importance of embracing the HIP and making it the number one priority in future business planning.
Did they listen? No they did not, well the majority did not, dismissing the HIP at the time as a requirement that would never work, and generally as an unwelcomed change.
Those who did listen have despite the recession done very well and have preserved and increased their conveyancing caseloads.
One of the main problems was the failure of the Law Society to get behind the HIP and to encourage solicitors across the country to seize the opportunity. Unfortunately the Law Society is not the quickest body on the block and is often more influenced and driven by politics than its membership.
In its defence, and for me to defend the Law Society it a rare occurrence, there is it seems quite a large amount of apathy within the legal profession. This was illustrated quite vividly in steps taken by the Law Society in the latter part of last year when it issued a Consultation Paper – ‘Improving Residential Conveyancing (CLICK HERE) inviting its members to comment on such proposals as a ‘Completion Pack’.
Bearing in mind there are over 12,000 plus solicitors practicing in this country how many responses do you estimate they received? Was it 6,000, or 3,000? Wrong! There were only 354 responses!
The Results of the Survey was even more surprising with the majority of those responding saying they did not see there was a problem with the process and that there was little that could be done to improve it.
Commenting on the timeliness of the exchange of information it was noted
‘…. around three quarters of respondents (74%) did not believe that this could be improved. Just over two thirds of respondents (69%) strongly disagreed’ or ‘disagreed’ that an agreed protocol would make conveyancing more efficient. Half of respondents disagreed that an electronic infrastructure for document exchange would speed up transactions’.
In conclusion it is hard to see any justification in the accusation of ‘hijacking’. The HIP was introduced in 2004 with the promulgation of the Housing Act. This left plenty of the time for conveyancing lawyers to plan and prepare so as to be first in the queue, and well ahead of the ‘interested parties’. Just because the majority failed to act, invest time and money and take the risks as many others have, it is hardly a basis for valid complaint. There was no hijack, it was more akin to a horse race where the favourite horse failed to leave the starting stalls.
Related Article: A Review of the Law Society’s Consultation Paper: CLICK HERE
Monday, 11 January 2010
Thursday, 7 January 2010
Addressing the growing concern about the continuing promotion of training programmes for energy assessors:
Contribution from Nicholas Shaw, Home Inspector, addressing the growing concern about the continuing promotion of training programmes for energy assessors:
‘My personal agenda on this issue stems from the fact that when I began my training to qualify as a Home Inspector I, and all the other trainees I met during my course had been given the impression by quoted examples of the high income that could be made from working as a HI/DEA. Throughout our course we were constantly encouraged to believe that very high earnings were possible from producing HCRs and EPC. We were encouraged to believe that even a change of government would make no difference to the market for our skills.
As to a solution to the problem of a small pool of work being shared out amongst an increasing number of qualified practitioners the only solution seems to be that ABBE, prompted by the CLG should call a halt to training. I fully understand that the government will say that it does not have the authority to do this but the Housing Act must allow for the enactment of a moratorium on the certification and accreditation of HIs and DEAs until the market situation stabilises. We already have more than enough DEAs to meet the demands of even a recovered housing market. As a further step I believe that those like myself that took the Home Inspector, that are as yet unaccredited, root should be eligible for some degree of compensation as the Dip HI qualification is not worth the paper it is printed on. Compensation could take the form of monetary recompense and their free transfer onto the DEA scheme. As time goes on I have noticed that the particular trainer I used, or was used by, shifts its ground by moving its newspaper adverts from qualification to qualification. It went from adverts for Home Inspectors to Energy Assessors and now has moved on to Air Conditioning Assessors as each specialism fills up.
I am sorry if this turned into a bit of a rant by I feel very hard done by, as do many of my colleagues. Cheated by our training companies with the assistance of the government by failing to retain proper control of the development of this supposed 'new' group of professionals. We can expect no help or sympathy from a new Conservative administration as they will just use the usual excuse of it not being their 'fault' and that we should blame the previous three Labour governments.’
7/1/10
Homeowners point to lack of credit as reason for shortage of homes
Fresh evidence has emerged today which helps support the belief of many that the lack of credit, rather than the home information pack (believe it or not this is still being claimed), is the main reason for the shortage of homes for sale.
In a survey carried out by Zoopla.co.uk called ‘Housing Market Sentiment Survey’ it found that although there exists increased confidence amongst homeowners, the results did show confidence alone was not enough to boost activity in the housing market as much still depends on the availability of mortgage funding.
It records:
‘75% of those surveyed claim that it is no easier now to get a mortgage than three months ago, placing the onus on lenders to work to increase confidence and help further lift the transaction volumes’.
Overall the results of the survey were positive, and indicate that compared with last year, when confidence was rock bottom, the outlook for 2010 is far more favorable. Homeowners signalled in the survey that the clearest indicator to them of a property market recovery ‘would be evidence of greater market activity in their local area – both in terms of more properties on the market for sale and transactions taking place’
Asked in the survey what homeowners were expecting to do over the next 6 months there was a clear intention to improve their properties in the coming months. In fact ‘42% of homeowners stated they would be embarking on home improvements over the next six months’, and which according to Zoopla, ‘may signal a greater willingness to get homes ready to put on the market’.
To see the full results please visit: http://bit.ly/4uKGIV
In a survey carried out by Zoopla.co.uk called ‘Housing Market Sentiment Survey’ it found that although there exists increased confidence amongst homeowners, the results did show confidence alone was not enough to boost activity in the housing market as much still depends on the availability of mortgage funding.
It records:
‘75% of those surveyed claim that it is no easier now to get a mortgage than three months ago, placing the onus on lenders to work to increase confidence and help further lift the transaction volumes’.
Overall the results of the survey were positive, and indicate that compared with last year, when confidence was rock bottom, the outlook for 2010 is far more favorable. Homeowners signalled in the survey that the clearest indicator to them of a property market recovery ‘would be evidence of greater market activity in their local area – both in terms of more properties on the market for sale and transactions taking place’
Asked in the survey what homeowners were expecting to do over the next 6 months there was a clear intention to improve their properties in the coming months. In fact ‘42% of homeowners stated they would be embarking on home improvements over the next six months’, and which according to Zoopla, ‘may signal a greater willingness to get homes ready to put on the market’.
To see the full results please visit: http://bit.ly/4uKGIV
Wednesday, 6 January 2010
Abolition of HIPs could present bleak future for Energy Assessors
There can be little doubt that without the vehicle provided by the Home Information Pack, the Energy Performance Certificate would have over the past year or so struggled. Its impact on reducing carbon emissions and on presenting home sellers and buyers with upfront information on the energy efficiency of property would have been far less. This can be stated with an air of confidence, given the outcome of a recent survey carried out by the OFT that shockingly disclosed that one out of every two properties in Northern Ireland, where there is no HIP, is marketed without an EPC!
The Conservative Party says it will retain the EPC and look to adopt the Northern Ireland model. This can only, given the Northern Ireland experience, strike fear in the hearts of many energy assessors as without the HIP there exists a real danger of assessors seeing less work as well as experiencing lower charges. As the market is currently flooded by assessors there would be commercial factors at play that could force the price of an EPC down even further.
This begs the question of how low can an energy assessor realistically afford to go when it comes to fixing a fee?
One assessor has carried out an analysis of the costing behind undertaking 521 EPCs over the last 8 months. Applying the average overheads incurred during this period to what is fast becoming an average ‘panel’ fee for an EPC of £30, the figures show:
‘Panel’ Fee £30.00
Less Overheads
Lodgement fee £-6.15
Accreditation fee £-2.50
PDA Fee £-2.00
Mileage Allowance £-3.17
CPD (£250pa 500 EPCs) £-0.50
Phone Costs £-1.00
Advertising £-0.14
Travel, meals £-0.19
Net fee per EPC = £10.65
The situation becomes even bleaker when applying this figure to the actual time involved in producing the £30 EPC.
Applying the fee to a 3 bedroom house, and a one off job, the time involved for straight forward EPC survey is:
Travel to and from site 30 minutes
Time on site 45 minutes
Administration 10 minutes
Total 85 minutes
The above produces an hourly rate of £7.52 which if then extrapolated out to an 8 hour day equals £60.14. Assuming there are 190 days during a working year (220 less 30 days for public and personal holidays) this gives rise to £11427pa gross wages – just £3,000 over the annual minimum wage!
However, to achieve this modest return the energy assessor would be required to carry out 1073 EPCs at £30 gross which works out at around 6 EPCs every working day. The question is how many DEAs are undertaking 6 EPCs a day every day of every week? Not many!
Some energy assessors believe that fees will increase if HIPs are abolished. The truth is that by removing the HIP work levels will fall and market pressure will force the EPC price down even further. At least the HIP has provided many energy assessors with the opportunity of maximising the return on their inspection with some earning around £100 to £150 on each transaction.
(Tags: Home Information Packs; Domestic Energy Assessors; Energy; HIPs; Home Inspectors; Conservative Party)
The Conservative Party says it will retain the EPC and look to adopt the Northern Ireland model. This can only, given the Northern Ireland experience, strike fear in the hearts of many energy assessors as without the HIP there exists a real danger of assessors seeing less work as well as experiencing lower charges. As the market is currently flooded by assessors there would be commercial factors at play that could force the price of an EPC down even further.
This begs the question of how low can an energy assessor realistically afford to go when it comes to fixing a fee?
One assessor has carried out an analysis of the costing behind undertaking 521 EPCs over the last 8 months. Applying the average overheads incurred during this period to what is fast becoming an average ‘panel’ fee for an EPC of £30, the figures show:
‘Panel’ Fee £30.00
Less Overheads
Lodgement fee £-6.15
Accreditation fee £-2.50
PDA Fee £-2.00
Mileage Allowance £-3.17
CPD (£250pa 500 EPCs) £-0.50
Phone Costs £-1.00
Advertising £-0.14
Travel, meals £-0.19
Net fee per EPC = £10.65
The situation becomes even bleaker when applying this figure to the actual time involved in producing the £30 EPC.
Applying the fee to a 3 bedroom house, and a one off job, the time involved for straight forward EPC survey is:
Travel to and from site 30 minutes
Time on site 45 minutes
Administration 10 minutes
Total 85 minutes
The above produces an hourly rate of £7.52 which if then extrapolated out to an 8 hour day equals £60.14. Assuming there are 190 days during a working year (220 less 30 days for public and personal holidays) this gives rise to £11427pa gross wages – just £3,000 over the annual minimum wage!
However, to achieve this modest return the energy assessor would be required to carry out 1073 EPCs at £30 gross which works out at around 6 EPCs every working day. The question is how many DEAs are undertaking 6 EPCs a day every day of every week? Not many!
Some energy assessors believe that fees will increase if HIPs are abolished. The truth is that by removing the HIP work levels will fall and market pressure will force the EPC price down even further. At least the HIP has provided many energy assessors with the opportunity of maximising the return on their inspection with some earning around £100 to £150 on each transaction.
(Tags: Home Information Packs; Domestic Energy Assessors; Energy; HIPs; Home Inspectors; Conservative Party)
Sunday, 3 January 2010
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.
‘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.
More contributions from HRG supporters
Hi
I calculate ( low estimate ) that the cost to the government if they cancel the HIP and EPCs get kicked into the long grass is a £ 200M. This is based on 2M HIPs per annum and 12000 DEAs and HIP provider staff claiming benefits
Can any government afford to give up this amount of revenue
Regards
Sev Holt
H&H Energy Assessors Ltd
Hi,
I was wondering how the Conservatives were planning on replacing all the revenue generated by out industry going directly into the governments purse. I don’t know how many HIPs are produced every month but I suspect that the vast majority of them charged to the vendors include vat, as they in the main won’t be able to claim back that vat the government must be earning in the region of £50 for every HIP produced, that is a lot of money. Are they going to increase everybody’s personal taxes to compensate for this large loss of income?????????????
Nick Stilton
J&N Energy
I calculate ( low estimate ) that the cost to the government if they cancel the HIP and EPCs get kicked into the long grass is a £ 200M. This is based on 2M HIPs per annum and 12000 DEAs and HIP provider staff claiming benefits
Can any government afford to give up this amount of revenue
Regards
Sev Holt
H&H Energy Assessors Ltd
Hi,
I was wondering how the Conservatives were planning on replacing all the revenue generated by out industry going directly into the governments purse. I don’t know how many HIPs are produced every month but I suspect that the vast majority of them charged to the vendors include vat, as they in the main won’t be able to claim back that vat the government must be earning in the region of £50 for every HIP produced, that is a lot of money. Are they going to increase everybody’s personal taxes to compensate for this large loss of income?????????????
Nick Stilton
J&N Energy
Latest figures v Mr Shapps
The figures today from Chartered Surveyors have shown the mortgage take up for November 2009, has outstripped the figures for November 2007. While giving caution for these figures, the hope is the market is more stable and less speculative, and that the peaks and troughs of previous years is less evident.
The conclusions then are that
The HIP has had no detrimental effect on the housing market and it is clear that it has been an assistance in the early recovery.
The up-front information contained in the HIP is converting the sale of properties early and with less ‘fall through’ of transactions, exactly as it is supposed to.
The market is not over subscribed with phantom or over speculative vendors but contains properties which are for sale at a market price and with more information available than ever before for would be purchasers.
The challenge to Mr Shapps must now be to have a proper debate about the HIP and not just to play silly electioneering games which threaten the good work and livelihoods of the people working in the industry.
We have to insist that he has got this wrong, the argument he uses are now shown to be flawed and the tories must replace the man with a more experienced shadow housing spokesman, he has clearly lost the argument and most probably the plot.
HRG would like to thank Brian Dodd for the above contribution
The conclusions then are that
The HIP has had no detrimental effect on the housing market and it is clear that it has been an assistance in the early recovery.
The up-front information contained in the HIP is converting the sale of properties early and with less ‘fall through’ of transactions, exactly as it is supposed to.
The market is not over subscribed with phantom or over speculative vendors but contains properties which are for sale at a market price and with more information available than ever before for would be purchasers.
The challenge to Mr Shapps must now be to have a proper debate about the HIP and not just to play silly electioneering games which threaten the good work and livelihoods of the people working in the industry.
We have to insist that he has got this wrong, the argument he uses are now shown to be flawed and the tories must replace the man with a more experienced shadow housing spokesman, he has clearly lost the argument and most probably the plot.
HRG would like to thank Brian Dodd for the above contribution
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