Home Sellers and Buyers set to pay more if the home information pack is abolished

The Hip Reform Group has today warned home owners that they are likely to face increased cost and delayed transactions if the Conservative Party proceeds with its intention to ‘scrap’ home information Packs;

HRG’s spokesman, Solicitor, David Pett explains:

‘The Conservative Party’ policy is focused solely on the removal of the HIP, with little, if any, detail on what this will leave behind, and, more importantly mean for the home owner. Grant Shapps would like the electorate to think this will make the cost of moving home cheaper. This is simply not the case – on the contrary the seller and buyer will see an immediate increase in the cost of property searches and will be left having to pay much more when moving home. The irony is that without the HIP the consumer will be a lot worse off’

The main reason for the increase is the rise in the cost of personal property searches, as according to Alan Thorogood, Chief Executive of STL Group plc, the average cost of the property searches has come down by 42% since the introduction of home information packs. These figures have been obtained by analyzing audits undertaken by the industry trade bodies COPSO and AHIPP and in discussion with a number of local authorities.

He explains the reason for this:

“The c 40% price reduction since HIPs is largely due to lower fees charged by personal search companies due to a smaller amount of specialist HIP providers commanding high market share. Lately, competition due to lower transaction volumes and the effect of the April 2009 Charging Regulations have played a significant factor re pricing. The Charging Regulations introduced the concept of ‘cost recovery’ of local authority data. This has reduced the cost of many council searches and, whilst the cost of local authority data for personal searches has actually increased, personal search prices have not increased significantly due to increased competition pressures’

In addition to added cost, the consumer will also, according to Mr Pett, be exposed to the potential of further loss associated with the return of increased abortive sales, as well as the stress of longer sale transactions.

Grant Shapps challenges democratic right to lobby

News broke today of a rather bizarre development in the ongoing debate on the future of home information packs.


In response to a well meaning letter sent by, and seemingly sent on the advice of, the London based PR lobbyists Luther Pendragon, and on behalf of their client, Association of Home Information Pack Providers, to Conservative MPs and Prospective candidates, Grant Shapps unleashed a scathing attack on what he described as a ‘crass’ lobbying campaign.


Commenting on the letter (as set out below) Shapps, a former American style online marketing guru, stated:


‘This is one of the most crass examples of public affairs I have ever seen from a lobbying company. Spamming parliamentary candidates with political abuse from a company email address hardly displays the intelligent political awareness that Luther Pendragon proclaim on their website.'


He added:


‘Email has great potential to engage Parliamentary candidates with the public in the forthcoming general election. Yet the public affairs industry needs to realise that like poorly targeted, unsolicited press releases, email also has the potential to annoy and undermine the very issues you are championing.


Conservatives are happy to talk to the housing industry over our plans to scrap Home Information Packs, but personal, angry campaigns are not a great way to win friends and influence people.'


Rich coming from a shadow cabinet member who not too long ago was involved in his own ‘crass’ example of public affairs when he was photographed wrapping red ribbon around a house! Cheap publicity and a stunt clearly determined to infuriate those who are working hard to bring about reform and save businesses they have worked hard to establish and develop.


It is also hard to understand why a man who has plenty of personal experience in using spam type emails and other types of marketing tools to run past and present campaigns can express outrage in such alarmist terms at a perfectly legitimate use of a public database.


Perhaps the decision to take this step has unsettled Mr Shapps. Perhaps the pro-hip lobbyists and those within his party who secretly support the HIP are finally getting to him?


Lobbying of political parties is part and parcel of a democratic society and the practice has been around from centuries. In attacking AHIPP and its actions is Mr Shapps not challenging a very fundamental democratic right? Does this not smack of sheer arrogance on his part?


What is perhaps more worrying is the decision of the lobbying company Luther Pendragon to respond to the outcry by ditching AHIPP as a client. How comes? One can only speculate that some political pressure has somewhere along the line been applied. It will be interesting to see how Luther’s other clients react to this rather public denunciation of a client who had for a healthy fee placed its confidence and trust in its hands.


THE LETTER IN FULL


Dear XXXXXXX


Many thanks for your response to my earlier correspondence on Home Information Packs. Whilst I appreciate there is an established Party line on this issue, I am disappointed that you did not take the opportunity to review the evidence for yourself and come to your own informed conclusion. I hope you will consider this letter and take a personal stance on the issue.


Grant Shapps, the Shadow Housing Minister, believes that scrapping HIPs would be a popular and inexpensive manifesto commitment. Having adopted a perceived vote winning policy in a neglected area, Mr Shapps has chosen to ignore the many voices and reams of evidence pointing towards the need for further reform through the development of the HIP product. Consumers, stakeholders across the property industry and the press are clear that the future of home buying and selling lies in Exchange-Ready products. These products reduce cost, delay and stress from the process of buying a home, and the removal of the requirement to produce a HIP provides an ideal opportunity to introduce them. Grant Shapps' refusal to introduce Exchange-Ready products is irrational and regressive.


A policy to scrap HIPs with no mandatory replacement will cause enormous short term damage to the housing market. Following the election of a Government with a commitment to scrap HIPs, homeowners will delay selling their home until they are scrapped. This would stifle any hopes of a long-overdue recovery in the housing market.


The market will also suffer damage in the long term. Before HIPs, the unavailability of reliable information and legal documents early in the home buying and selling process were the prime cause of stress, delay and abortive transactions, which cost consumers approximately £1 million every day. With this information provided in the right format, at the right time, and at the right price through a HIP, costs are kept down, transactions run more smoothly, and professionals like lawyers and estate agents are freed to carry out their specialist work.


Critics of the HIP claim that the searches included are not authoritative, and lawyers are commissioning their own searches. The most recent report by the Property Codes Compliance Board, which regulates property searches, showed that there were no differences in quality between the searches in HIP Code compliant HIPs and searches provided by the Local Authority. Critics also say that HIPs add cost to the home buying process. This is simply not the case, as the savings made through efficient search delivery outweigh the upfront cost of the packs. The reduction in the cost of moving home seen over the past two years has been as a direct result of the introduction of HIPs, and scrapping HIPs would increase costs once again.


Finally, Grant Shapps assures voters that he will retain the Energy Performance Certificate element of the HIP, as he accepts that it is a crucial tool in reducing carbon emissions. He has, however, ignored evidence from all other European Union member states that have attempted to introduce the EPC as a stand-alone document. In Northern Ireland, where there are no HIPs, 45% of houses are sold without an EPC, versus less than 5% in England. Indeed, in the rental or commercial property sectors in the UK, where HIPs are not required the levels of non-compliance are over 40% and 73% respectively. No member state has managed to achieve meaningful levels of compliance with the requirement to produce an EPC, except for states that require it as part of a HIP-style pack. There is no reason why the UK would be different.


Grant Shapps has ignored calls from the HIP industry, the Law Society, Which?, numerous estate agents and consumers, for further reform taking into account the progress made through the HIP. He has ignored his own research and consultation exercise, the 2007 Home Buying Review. This exercise, which sought to investigate the possibilities for further reform, was cancelled shortly after Owen Inskip, an independent expert, submitted his report. This has never since been released, despite repeated requests. Should he be elected, by the time Grant Shapps consults on his proposals, with the market in turmoil and jobs already under threat, it is likely to be too late to build on the achievements of the HIP.


I hope you will give all of these issues your urgent attention. Grant Shapps intends to make a national election issue of his opposition to HIPs, but he underestimates the industry's ability to make the case for itself with voters. I hope, that having considered the issues, you will write to me outlining your own position on the issue.

Yours sincerely


Mike Ockenden


Director General

Has Grant Shapps lost the support of estate agents?

HIPs – it’s a funny old game!


It was not too long ago when the National Association of Estate Agents (NAEA) was falling over itself to knock at every given opportunity the beleaguered home information pack. There were constant accusations that the HIP was nothing other than an unnecessary and costly barrier to speculative sellers and how this was in turn causing a major housing shortage.


On top of this we were seeing Grant Shapps and his loyal band of supporters proclaiming that the estate agents they spoke with were all united in their view that the HIP was not wanted and was making a major contribution towards the failing property market.


What a difference a couple of months of a recovering property market has had on estate agents as we have within the past couple of days seen Gary Smith, the President of the NAEA, write an open letter to the OFT in response to its survey on home selling in which it would seem estate agents are beginning to see the HIP in a more favourable light.


The letter that can be viewed in full below was written in response to concern over the lack of regulation within the Estate Industry ( I wonder what Grant Shapps makes of this !!) and of how this will allow the likes of Tesco to set up in competition.


Mr Smith says:


‘Presumably the OFT will also be excusing the supermarket chain the bother of having to comply with the Money Laundering Act and having to provide an Energy Performance Certificate or Home Information Pack. For a senior Director of the OFT to be happy to advocate the sweeping aside of carefully considered legislation aimed at consumer protection, energy conservation and anti-money laundering, defies belief’.


What a turn up for the books – the NAEA saying for the very first time that the HIP Regulations should be viewed as ‘......carefully considered legislation..’!


Is this really a turning point, can the NAEA really now be saying it recognises the importance of the HIP and of how this is providing protection and benefits for the consumer. If it is, I am not surprised as many of the estate agents I have spoken with clearly support the aim of the HIP. Though they feel it could be improved, they are firm in their view that it should remain. Returning to a system that was clearly not working is simply not an acceptable option.




The letter also brought a smile to my face as the call for further regulation clearly does not sit comfortably with the dislike Grant Shapps and other Conservatives have for regulation and of how they see the HIP as a symbol of over regulation. Perhaps the NAEA has woken up to the hypocrisy it would be guilty of if it were to persist with an anti-HIP campaign whilst calling at the same time for additional regulations to protect its members.


It will be interesting given his well know connections with the estate agency community how Grant Shapps deals with this rather interesting development.


'Dear Sir/Madam


The Office of Fair Trading's (OFT) proposals (18th February) to change the laws under which properties are sold in the UK to favour the involvement of Tesco, seriously both negates and brings into question the OFT's role of consumer protection in the UK.


Under the Property Misdescriptions Act of 1991, it is a criminal offence for estate agents to make false or misleading statements regarding properties placed on the market. The OFT is advocating a change in this law to allow certain corporations such as Tesco to be exempt from the Act. This would place the burden of responsibility on the seller to ensure that all information on the marketing of the property is accurate.




Presumably the OFT will also be excusing the supermarket chain the bother of having to comply with the Money Laundering Act and having to provide an Energy Performance Certificate or Home Information Pack. For a senior Director of the OFT to be happy to advocate the sweeping aside of carefully considered legislation aimed at consumer protection, energy conservation and anti-money laundering, defies belief.


The average home owner cannot be expected to have the skills to assess the state of their own property, nor navigate their way through the complex regulations that they would need to abide by in order to sell a property.



The National Association of Estate Agents (NAEA) has always been in favour of protecting consumer rights. We recognise that buying or selling a home will, for most people, be the most complicated and greatest financial transaction of their lives. But these OFT proposals have been ill-thought through and do not take into account the complexities of the buying and selling process which a private seller would have to face.


The NAEA has been calling for more stringent regulation of estate agents to offer additional and necessary protection for consumers, which is why we will be introducing our own licensing scheme for NAEA members later in the year.




The OFT really should not be seeking publicity with these wild headlines but should instead concentrate on fulfilling their role - that of consumer protection and adherence to Trading Standards.




Yours faithfully


GARY SMITH


President, National Association of Estate Agents'

Home Information Packs help to reduce 'bribe' culture

The Daily Mail carried an article over the weekend in which it highlighted a long running but very rarely reported practice of solicitors paying to estate agents fees of £100 plus for referrals.


Some lawyers consider this part and parcel of running a modern day practice and see the payment of a fee as nothing other than a marketing expense. Others however look upon referral fees as ethically indefensible and are concerned about the quality of commercially motivated advice.


Many smaller practices with limited resources also find it difficult to compete with larger ‘conveyancing practices’ and believe that unless the Law Society act quickly to outlaw referral fees they will be left out in the cold.


Solicitors are allowed to pay referral fees providing they disclose this to the client at the outset of the instruction. Unfortunately many get around this through hiding the disclosure in very long terms of retainer. One large conveyancing practice in London for instance has terms and conditions that run to around 30 pages in which if you look closely, and have time to spare to read the small print, you will see they pay for leads.


On balance payment of ‘bribes’ of this type have been part and parcel of our commercial world for centuries and any outright ban on referral fees would only lead to forcing the practice underground. They should therefore continue, but if a fee is payable the payer should disclose the fact and be required to make this perfectly clear and to provide the client with options. This is my view.


It is argued that thelead fees inflate the cost of conveyancing. This is nonsense, as the money used to pay for the lead would otherwise be used for other marketing initiatives. Payment for leads is nothing other than a marketing expense – it does not add to the cost of the fees. In fact since the introduction of home information packs the cost of selling and buying has come down.


The HIP has also helped to reduce the practice of referral fees as may solicitors and estate agents now work in local networks and instead of paying fees to each other they simply make fee-free cross referrals. The solicitor will do the HIP for the estate agent and the estate agent will refer the client back to the lawyer for the conveyancing work.


Local established networks born in the post HIP era are good for the property professionals and the consumer in terms of keeping cost down and quality of service high. Hopefully Grant Shapps will keep this in mind, as a factor, when he comes to review his policy on the future of HIPs.

Britain heading for hung parliament – Guardian/ICM poll

Guardian reports - Tories might not win election outright, suggests new survey

The Conservatives should no longer count on winning the election outright, according to a Guardian/ICM poll published today.

The new survey suggests Britain is on course for a hung parliament amid faltering public support for David Cameron's party.

The opposition have also lost ground on key policy issues, including the economy, and in particular may be losing their campaign against Labour's so-called "death tax". Labour leads the Tories by eight points as the party with the best policy on care for the elderly.

The two parties are neck and neck on their ability to sort out the economic crisis, against a nine-point Tory lead when the question was last asked in August 2009.

With no more than three months to go until polling day, the Conservatives have fallen to 37%, down three on last month's Guardian/ICM poll and down two on another ICM poll earlier this month.
The party has not fallen so low in an ICM poll since the tail end of the banking crisis, last falling to 37% in February 2008.

As recently as last October the Tories hit 45% in an ICM poll and the party will be alarmed by this latest evidence that the race is tightening, which confirms the findings of some other recent polls.

Meanwhile Labour's support, at 30%, is eight points up on its absolute ICM bottom last May, and slightly above its average for the second part of last year. However, there is no sign of either a boost for the party following Gordon Brown's Piers Morgan interview or a fall after this weekend's reports about Brown bullying his staff.

Labour's support is up one point on the last Guardian/ICM poll and unchanged from the most recent ICM poll. Research began last Friday and most was carried out before the serialisation of Andrew Rawnsley's book in yesterday's Observer, which may have affected Labour support. Around a fifth of responses were collected on Sunday.

Nick Clegg's hopes of a powerful place in a hung parliament are also boosted by today's poll, which puts the Liberal Democrats on 20%, unchanged from the most recent ICM and down one on last month's Guardian poll.

All this suggests that Labour and the Lib Dems are holding steady while the Conservatives lose some ground to smaller parties, which are on a total of 13%. Nationalists are on 5%, Ukip and the Greens on 3% each and the BNP on 2%.

Estimates of what these shares would mean for the parties on polling day vary, but a 7% lead is at the margins of what the Tories think they need to win a majority. One academic calculation suggests the result would leave Labour only 25 seats behind the Tories in a hung parliament, although any improved Tory performance in marginal seats would offset that.

• ICM Research interviewed a random sample of 1,004 adults by telephone on 19-21 February 2010. ¬Interviews were conducted across the country and the results have been weighted to the profile of all adults. ICM is a member of the British Polling Council and abides by its rules.

Saturday Telegraph reports on Shapp's problem with numbers

http://www.hipreformgroup.com/sat_tel.pdf

Shapps confirms importance of HIP compliance

The Association of Home Information Pack Providers (AHIPP) called on those providing HIPs to comply with the HIP regulations, following communication from Grant Shapps relating to the issue. For the full article: http://bit.ly/9jOen5