Hips

Richard_Webster

The original idea much promoted by the Goverenment and the Consumers Association etc was that it would speed up the process and stop gazumping.

There are three reasons why this won't make much difference:

1. There will be small time saving if as much paperwork as possible is available at day 1, but whilst they have made a huge fuss about putting Energy Efficiency Certificates etc in from the start, the new Home Use Form (the replacement for the Sellers Property Information Form) in which the seller might have to admit he has had rows with neighbours or that the house suffered from subsidence a few years ago, does not have to be completed! So they have not even kept to their own original principle of having everything available upfront! Solicitors will still have to ask further points as they have always done.

2. Mortgage offers typically take as long to come through as searches so having searches up front isn't going to make any difference!

3. What about chains? Most of the delays that people moan about are really down to chain issues rather than specific problems over damp or whatever that the Government think are the major cause of delay! The reason systems in other countries appear to be quicker is that very often people do not even try to use the proceeds of a sale to fund a purchase. They either have enough money to own two properties at once or they sell, rent, look for something else and then buy.

The whole scheme does very little to solve this problem. If the average time for a purchase where there is no chain is say 8 weeks and the HIP could reduce it to 7, then if it takes each person who has sold 2 weeks to find to find a property to purchase, you add 2 weeks for each link.

For instance if A is a FTB and agrees to buy B's house and it takes B 2 weeks to find and then agrees to buy C's house and C takes 2 weeks to agree to buy D's house then D takes 2 weeks to agree to buy E's house then D & E's transaction doesn't really start moving until 6 weeks after A has done his "subject to contract" deal so the whole process might take 8 + 6 = 14 weeks, with a HIP working properly maybe 13 weeks. Whoopy-doo! All that money and a new industry of HIP providers created just for that!

P.S. The Land Registry have been quietly beavering away at making electronic conveyancing work, and they have the idea of a "Chain Matrix" on the Web so everyone in a chain can see how far things have got. This is still being worked on, but as the Land Registry know far more about how conveyancing works than the Government, when they eventually deal with the teething problems, their ideas are much more likely to make a difference.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.

dnwilliams

The Home condition report (HCR) was dropped from the pack last year and now the Energy performance Certificate (EPC) is the key ingredient.

Here is a quote from the NAEA's latest news release of yesterday:-

Lack of energy assessors
“The first obvious question is ‘will there be enough energy assessors?’. Considering that no accreditation body has been decided on yet, this is not looking likely. The government has a lot of work to do over the next three months if they want to ensure a good supply of assessors is readily available.”

Rick62

The Energy certificate is nonsense. Anyone can get the training in a few months, so they will not be either surveyors or engineers. Some of the EPC is inane - how many low energy bulbs in the house, how thick is the loft lagging, other items like the construction method of the roof, the insulation under the floor etc (the important things) I doubt it will be possible for the assessors to assess accurately. Please, any assessor, correct me if I'm wrong.

So on a scale of A to G most houses will score D or E with the potential to be C or D - wow! There won't be any great surprises, and if you really want an accurate real assessment of the energy rating of any house just ask to see all the fuel bills for the lasst 2 years.

Rick62

Oh yes, and those searches that will cost the vendor £hundreds - how long will they be good for? If its 6 months later by the time that your buying the house are you going to rely on the old searches, or get new ones done? Also, even if they are recent, are you going to rely on searches that someone else has done? How will you know the searches are not fraudulent? You think your lawyer is going to confirm anything from searches that he has not done himself - no way.

courtjester

Richard_Webster wrote:

The original idea much promoted by the Goverenment and the Consumers Association etc was that it would speed up the process and stop gazumping.

Well this was the hype - it is unfortunate that the government are not subject to the same advertising regulations that the rest of us have to abide by, concerning misleading promotions.

The HIP has *never* been about speeding up the process - that is a smoke screen. It has only ever been about producing the ENERGY REPORT- this because of an EU directive requiring that all homes in the EU must have a certification for energy consumption (by 2012 I believe) - presumably so that they can tax higher wasters. The government did not want to pay for this or admit to the populous that they had agreed to UK citizens being hit by yet more EU red tape and unnecessary costs.

So they invented the "benefits" of the HIP and buried the energy report deep within it. But now thanks to highly favourable timing, climate change has become all the rage and hence the gov have brought the energy report out of the closet and can claim extra green credentials and forethought on their part in implementing HIPs.

There is NO condition survey being introduced in the compulsory HIP - the only component that would really benefit buyers - although this will be encouraged on a vountary basis. There is a very good chance that the market will dictate what happens, as if most homes provide a survey in the HIP, meaning that buyers won't have to pay for their own one, this could drive more homeowners to have the survey included to compete.

In the long run, the condition survey will be made compulsory once enough surveyors are trained up.

Lenders will still require their own valuation to protect their financial interests. It is doubtful that buyers will want to commission their own survey if one already exists - current statistics suggest that the majority of home buyers do NOT in fact have any condition survey done now (relying rather riskily on the lender's own 'valuation report'), so buyers are unlikely to suddenly want to put their hands in their own pockets where a perfectly valid survey is made available free by the vendor.

Surveys will not expire although their date will be relevant to the timing of the sale. Searches do expire, but these will be easily updated or renewed at relatively low cost, so the problem of expiry of the pack is more imagined than real.

There are a lot of changes going on now with the Land Registry and E-conveyancing which will combine with the pack requirements to improve the offer-to-completion process in the long term, but the initial benefits of the crippled HIP introduced in June will not be realised until later.

I suspect this is merely a storm in a tea cup - people resisting change. Once the facilities are there, people will use them and in a year or two it will all be part of the normal process.

A better option is the system used in Denmark where *EVERY* home is sold voluntarily with a HIP + survey and buyers rely upon the vendors survey without question - but the law there states that a vendor is *legally responsible* for all defects in the property for up to 20 years after the sale UNLESS a technical report (survey) and insurance policy covering any hidden defects is provided, whereas in the UK the law is 'buyer beware', so a change in the underlying legislation is needed here for HIP's to fully realise their potential.

tonydee

I personally think the energy report is a good thing, if done properly of course.

thesaint

Rick62 wrote:

The Energy certificate is nonsense. Anyone can get the training in a few months, so they will not be either surveyors or engineers. Some of the EPC is inane - how many low energy bulbs in the house, how thick is the loft lagging, other items like the construction method of the roof, the insulation under the floor etc (the important things) I doubt it will be possible for the assessors to assess accurately. Please, any assessor, correct me if I'm wrong.

So on a scale of A to G most houses will score D or E with the potential to be C or D - wow! There won't be any great surprises, and if you really want an accurate real assessment of the energy rating of any house just ask to see all the fuel bills for the lasst 2 years.

Asking to see the energy bill does not give an accurate assessment of the energy rating of a house.
My Gas bill is not high because I choose to use an electric heater instead of putting on my central heating. No disecting of my electric bill can confirm whether my bill is made up of lots of usage of my 42" plasma television, leaving my 500w security light on all day and night etc.

dnwilliams

NAEA, RICS & CML against Hips, now governments own department is critical!

The Better Regulation Commission issues its views on the Government's proposals for introducing Energy Performance Certificates on 26th Feb this year. The Commission calls on the Government to delay the introduction of Energy Performance Certificates until it has had the opportunity to reconsider its proposals in the light of the issues the Commission has raised.

The Commission accepts that Energy Performance Certificates need to be introduced to meet the requirements of a European Directive, and that their introduction may make some contribution towards reducing the energy consumption in buildings. However, it has concerns about the way the Department for Communities and Local Government (CLG) is proposing to introduce them.

CLG's proposals for residential properties go beyond the requirements of the Directive in requiring a new EPC to be produced every time a property is put on the market for sale, and by requiring its production before the property can go on the market. Yet it has provided no supporting evidence to justify this “gold–plating”.

Phirefly

I predict...

Those unfortunate enough to have to put their house on the market in the latter half of the year will be forced to jump through hoops and spend more money selling their house, then my guess is that by next year, the Powers That Be will cave and conceed that the whole thing is nonsense and by June 2008 HIPS as we know them will be a distant memory.

jaype

I thought you had to include a copy of the lease in it? We polled out of our last purchase as the lease was dodgy, and the owner had never got council appoval for the work he did converting it from a shop to a flat. Cost us £1700 in wasted survey, mortgage arrangemrnt fee and solicitors costs. If it would save people from thatsort of thing, bring on HIPs!