'Green’ HIP’s won’t help homebuyers
By Damian Clarkson 25th April 2007
The impending Home Information Packs (HIPs) may be great news in the fight against
global warming, but are unlikely to prove any real value for homebuyers.
Anyone selling their house after June 1 will have to fork out between £400 and £600
for the packs, which provide prospective buyers with key information about the property,
such as copies of deeds and details on energy efficiency.
Essentially HIPs are designed to help beleaguered buyers by making this vital information
readily available to them, and forcing sellers to foot the bill.
HIPs offer little to buyers, but cost sellers a packet
Critics claim HIPs are just a dressed up green initiative that offers little real
value to buyers, pointing out that the packs’ main focus is now the Energy Performance
Certificates (EPCs).
EPCs rate homes according to their energy efficiency - and thus what impact they
have on the climate – as well as information on the energy running costs entailed.
That criticism was given weight when Housing Minister Yvette Cooper announced recently:
“We believe EPCs are the most important element of HIPs. Indeed they are the only
new compulsory element. Otherwise, HIPs simply collect together the legal information
and searches that are already provided and paid for in the home buying and selling
process.”
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HIPs are “a bureaucratic white elephant”
While the EPC is a noble idea that will no doubt help monitor our carbon footprints,
it does little to improve the buying process.
As campaign group Splinta (Seller’s Pack Law Is Not The Answer) points out: “The
government aim was to improve home buying and selling in England and Wales, however
this now takes a distant second place to green issues and a desire to audit the
nation’s housing stock.
“A very substantial proportion of the property industry has long believed the government
aim is off-target and that HIPs will not provide cost-effective beneficial changes.
It’s a huge bureaucratic white elephant.”
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EU is running the country now,br /> One possible explanation for
the switch in focus is that the government is trying to kill two birds with one
stone. As a result of a European Union Directive, the UK must ensure that all properties
sold or let carry an EPC by 2009.
By hijacking the HIPs initiative, the government can claim to be helping homebuyers
while chalking off one of its EU commitments at the same time.
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HIPs “will speed up the process”
The government’s decision to make the Home Condition Report (HCR) – essentially
a survey of the property that gives buyers a clear idea of what work needs to be
done – optional rather than mandatory is another area that has dented the value
of information provided in a HIP.
But Mike Ockenden, director general at the Association of Home Information Pack
Providers, is adamant that HIPs will speed up the buying process and improve transparency.
And he says HCRs could once again become mandatory.
“The procurement of documents for searches up front will increase transaction speed
and notably reduce the level of aborted transactions. So the packs will do what
they are designed to do, although not as well as they would with the HCR in every
one.
“And if we don’t get sufficient voluntary uptake of HCR, we will be lobbying the
government very hard to make it mandatory again.”
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HIPs are happening, like it or not
They might be expensive, and they might not be a panacea for the buyer, but HIPs
will arrive in June.
So for anyone looking to sell their home, it would be a great idea do so some reading
on HIPs – the last thing you want to do is learn about the packs from the estate
agent selling it to you.
First of all, don’t DIY. It may seem like a great way to keep a few hundred quid
in your pocket, but assembling a HIP is fairly tricky and the EPC has to be accredited
by a domestic energy assessor (at a cost of around £80 - £120).
“There’s little reason to do it yourself from a cost-saving perspective,” explains
Ockenden.
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Check the small print
And besides, certain estate agents are offering some fairly attractive deals – Hamptons
International will do it for free in exchange for your custom – but as always, beware
of the fine print.
Many of the deals – like 'buy now - pay later’ or 'pay on completion’ are designed
so that the contents of the pack are actually owned by the agent and not the property
seller, says David Roberts, founder of property site tickeverybox.com.
“This could have important consequences if the owner decides to bring in a second
agent, switch agents entirely or even pull the property from the market. If the
agent owns the rights to the pack, the sellers options could be seriously restricted
as they will be inadvertently tied in to a sole agency agreement.”
And finally, don’t be tempted to rush and sell your house before HIPs become compulsory.
The cost of a few hundred pounds is nothing compared to the importance of thorough
planning to guarantee the best deal for your most important asset.
Article produced by EveryInvestor.co.uk
