Non HIP Compliant Local Authority Searches
IPSA have today released a list of Local Authorities that they are advising members NOT to buy official searches from, to ensure Home Information Pack compliance.
The following statement has been made and supplied to us by IPSA:
IPSA is in receipt of a number of Local Authority Searches compiled and sold by the following Local Authorities and Water Companies to consumers which contain elements which are not HIP compliant under Schedule 6 of the Home Information Pack Regulations. Members producing HIPs should not include searches in a HIP, from any supplier named on the following list:
Wakefield
Leeds
Hambleton
Wirral
Wiltshire
Cheshire West and Chester
North West Leicestershire
Birmingham
Leicester
Brent
Warwick
Coventry
Redbridge
Harrow
Knowsley
Greenwich
Kensington & Chelsea
Welsh WaterEach of the Local Authorities has also received a Freedom of Information request.
The requests are all the same.
“How many searches have been completed since the introduction of the Home Information Pack regulations to the date of this request?”
The figures plus the uninsured figures from yesterday’s release will start to give a clearer picture of how little the consumer has been protected.
IPSA members comply with the law and conduct business activities inline with our strong code of ethics.
For our members’ clients the IPSA Code logo delivers piece of mind.
We will be following this development closely and will update you as and when we receive more information.
Mike Ockenden (AHIPP) interview – the future of HIPs
Welcome to Mike Ockenden, Chairman of the Association of Home Information Pack Providers (AHIPP) who has kindly agreed to spread a bit of light on how he sees the past and future of all things HIP related.
Q 1. – What one area has the Home Information Pack positively changed and which area do wish had been different and/or improved?
A. – HIPs have positively changed a number of areas of the homebuying and selling process, but if I had to pick one it would be the improved speed at which transactions get to exchange of contracts because of the pack. Data released by Connells in September 2009 showed that vendors with HIPs exchanged contracts on their property on average seven calendar days faster than those without a Home Information Pack.
Q 2. – It is quite widely read that Grant Shapps has pledged; time and time again to scrap HIPs, if as it appears is likely that the Conservatives win the next election. Do you think the Tories will definitely scrap hips or in reality alter and re-brand them?
A. – There is a great opportunity to create a genuinely sustainable alternative to HIPs that will not require the complete unraveling of the existing legislation and industry infrastructure but will rather be built on enabling the British public to have a faster and more efficient house-buying process. AHIPP hopes to work with the Conservatives to re-package HIPs and thus achieve this goal.
Q 3. – AHIPP seems to have softened their stance towards Grant Shapps, is that because he is listening to you now?
A. – AHIPP values the relationship with Grant Shapps and his office which we have always seen as positive and constructive. We wish to continue the dialogue over the coming weeks and months and hope to work with the Conservatives to create a genuinely sustainable alternative to HIPs.
Q 4. – If the Tories carry out their promise to scrap HIPs, what timescale will this involve, are they able to suspend them first with legislation already in place? If so, how long will that take and would suspension need to go through the House of Lords where the Tories would be in the minority?
A. – Whilst the power exists for the Secretary of State to suspend the HIP duties the recast of the EPBD, that will be signed off in December 2009 by the European Council of Ministers, complicates matters. As previously mentioned, AHIPP hopes to work with the Conservatives to create a sustainable alternative to HIPs that will not require a complete unravelling of the existing legislation. To move to a situation where no replacement or alternative is in place would be a retrograde and unacceptable step in efforts to reform the process of buying and selling homes.
Q 5. – With rising un-employment figures, scrapping HIPs would no doubt increase that number, do you have an estimate of the number of people involved in the established Home Information Pack industry?
A. – The UK HIP industry is worth over £300 million and employs over 10,000 people either directly or through the provision of the constituent parts. Clearly a lot of jobs would be at risk.
Q 6. – With Grant Shapps’ pledge to scrap HIPs how many of those at risk of un-employment due to this pledge can you see voting conservative?
A. – I can’t comment on individual cases but it is worth noting that scrapping HIPs will not only affect HIP providers, but all those organisations which currently provide services and products to HIP providers. The destruction of the HIP industry will impact on solicitors, estate agents, printers, IT services suppliers, and marketing companies, in addition to those who directly provide HIP elements such as search agents and energy assessors.
Q 7. – Are HIPs the ‘perfect’ solution to the system prior to HIPs being introduced. What do you see being the best way forward for HIPs, what changes do you see improving the HIP if any?
A. – We must be open and honest about the introduction of Home Information Packs and recognise that they have not achieved everything they set out to do. Their introduction was far from perfect and they have not delivered everything that was hoped. Lessons need to be learned from our experiences, both positive and negative, to inform the next stage of reform.
Going forward, AHIPP would like to work with the Conservatives to develop a viable way forward that is to the benefit of consumers, building on exchange ready HIPs and Energy Performance Certificates, and to ensure providers adhere to the highest standards in providing services to consumers.
Q 8. – Most know about the historic U-turn in regard to the Home Condition Report (HCR), can you ever see a day when this exact product is included in the HIP or is it more likely we will follow Scotland and use a ‘RICS type’ survey if introduced?
A. – The u-turn over HCRs was one of the biggest disappointments about the bungled introduction of HIPs. There might come a time where the issue is revisited but for the moment we are focused on ensuring that the home buying and selling process is a faster and more certain process for consumers and professionals. We believe that the exchange ready HIP provides the framework for this.
Q 9. – It is widely recognised that there is a massive oversupply of Domestic Energy Assessors (DEA) and Home Inspectors (HI). How do you feel about training providers continuing to train people as Domestic Energy Assessors (DEA)s and Home Inspectors (HI) when some Home Inspectors (HI) have never carried out one Home Condition Report (HCR)?
Domestic Energy Assessors and Home Inspectors are part of an open and free market and as such it is inevitable that access to the necessary training should remain available. Over time we can expect market forces to take effect, leading to a balance of supply and demand with regards to these roles and their place in the wider market. That said there will always be demand for good people.
Q 10. – Should Domestic Energy Assessors (DEA) carrying out EPCs directly for AHIPP members be worried about future payments as HIP providers could be very quickly be in financial distress if HIPs are scrapped?
The abolition of HIPs would clearly have significant and immediate financial consequences for HIP providers. I am however confident that an alternative sustainable product, building on the benefits of the existing HIP, can be developed and will ensure the future of the industry in the UK. It should also be noted that the EPBD recast will require an EPC to be in place prior to marketing a property for sale or rent. HIPs currently provide the only framework to deliver the EPC.
Q 11. – Can you tell us a little about PEPA; some have said possibly quite cynically that PEPA is a way forward for AHIPP members who are going to lose their main income stream and an exit strategy for AHIPP?
The Federation of Property Information Providers (FPIP) brings together the Association of Home Information Pack Providers (AHIPP) and the Council of Property Search Organisations (CoPSO) under one umbrella, recognising the increasing prominence of the role of these industries in serving consumers. The Property and Energy Professionals Association (PEPA) which has recently been formed is focused on the future of energy and condition reporting in the widest sense across both domestic and commercial properties. Its agenda is distinctly different to that of AHIPP. While the member organisations of FPIP will retain their independence and individual management structures, the Federation’s objective will be to strengthen the constituent bodies’ ability to drive forward positive reform and to act as a compelling, effective voice for the sector with Government.
Q 12. - Looking back it seems to have been quite a rollercoaster for the life so far of the Home Information Pack, did you imagine at the inception it would have been as it has?
A. There is cross industry recognition that HIPs have not achieved everything they set out to do and clearly this is disappointing. What is important now is how we develop the many benefits contained in a HIP and create a new sustainable product that delivers more fully for the consumer going forward.
Q 13. – Mike as Chairman of AHIPP, you have had some very strong opposition to your Pro-HIP beliefs, thoughts and actions; however, whether others agree with your views or not, most people almost universally recognise the good work you have done towards promoting Home Information Packs. What has your biggest achievement been in this regard so far?
A. – I hope that my biggest achievement is yet to come and that my legacy for AHIPP will be to have worked with the Conservatives to create a genuinely sustainable alternative to HIPs.
Q 14. – This time next year will we still have Home Information Packs and what will they look like?
Yes, I believe we will, in the form of a mandatory legal pack (containing an EPC) to be in place prior to marketing. It just might not be called a HIP!
New legislation will put HIPs firmly in the hands of consumers – says AHIPP
From 6th April this year, every home must have a HIP in place – not just ordered – before it can be put on the market. Vendors will also now be required to complete a new Property Information Questionnaire (PIQ) detailing important pre-sale information such as the home’s council tax band, parking arrangements, utilities and any structural alterations – vital when deciding to make an offer.
Not only will the new PIQ provide buyers with further, upfront information about their possible new home, but it will significantly increase the number of consumers viewing the HIP, according to the Association of Home Information Pack Providers (AHIPP).
Mike Ockenden, Director General, AHIPP comments:
“Finally we will see HIPs getting into buyers’ hands. There is already evidence that HIPs have helped to speed up the conveyancing process. However, one of the key challenges we have faced as an industry is consumer apathy. While every home on the market has had a HIP since December 2007, a recent CLG report has indicated that so far, only 40% of buyers even saw the HIP for the home they eventually purchased, and this needs to change.
“HIPs provide buyers with a great deal of important information that should be taken into consideration before making an offer, from the home’s energy efficiency to local search information. Following the launch of the PIQ, the level of upfront information available in the HIP will increase and we expect to see more buyers asking to see a home’s HIP. The reality is that most of those selling a home will be buying a home too and if they have competed a PIQ for their own property, they are more likely to ask to see the PIQ for any properties they plan to purchase.”
As vendors play an increasingly involved role in the HIP process, AHIPP warns consumers that they need to act quickly and efficiently to ensure they do not delay the marketing of their own home. Completing the required PIQ and allowing Domestic Energy Assessors (DEAs) into the property to conduct the necessary Energy Performance Certificate (EPC) as quickly as possible will be essential to ensure smooth and seamless process.
Ockenden, adds:
“Our members are turning HIPs round in an average of five days. As a result, this new legislation is unlikely to delay consumers looking to sell their home. However, with vendors playing an increasingly important role in the HIP compilation process it is essential that they are provided with the necessary information and are made aware that their PIQ must be completed before their home can be marketed.
“The majority of our members are offering a PIQ completion service to assist vendors with the form. To avoid any delays, anyone planning to put their home on the market post 6th April should ensure their agent is offering access to such a service.”
A sample of the PIQ can be found at:
http://www.communities.gov.uk/documents/housing/doc/propertyinfoquestion…
The HIP must include:
• Index
• Property Information Questionnaire (PIQ)
• Energy Performance Certificate or Predicted Energy Assessment
• Sustainability Certificate (new homes only)
• Sale Statement
• Local Authority searches (can follow in up to 28 days if not immediately available)
• Lease (as applicable – can follow in up to 28 days if not immediately available)
Property Information Questionnaire regulations
The following is a link to the regulations that were laid in parliament on 21st January in respect of the PIQ: The Home Information Pack (Amendment) Regulations 2009 No. 34
Further information can be found at: http://www.communities.gov.uk/housing/buyingselling/homeinformation/
AHIPP welcomes clarity on HIPs
The Association of Home Information Pack Providers (AHIPP) today welcomed the clarity that the Government has provided to all parties in respect of the HIP regulations. By addressing the loose ends that were outstanding with the transitional arrangements property professionals can plan for the spring with certainty.
Mike Ockenden, Director General of AHIPP, said ‘The introduction of the Property Information Questionnaire when coupled with the expiry of the first day marketing provisions means that consumers will become much more engaged in the HIP process and be better able to judge the value that they bring to buying and selling homes. AHIPP and its members are committed to delivering the benefits of HIPs both in making buyers much better informed about the houses they are viewing and streamlining the legal process through the roll-out of ‘exchange ready’ packs.
New measures to benefit consumers
A new package of measures to ensure consumers receive
improved information in the home buying and selling process was announced today by Housing Minister Margaret Beckett.
As part of a series of further improvements to the Home Information Pack (HIP), consumers will receive more helpful information about their future home. A new Property Information Questionnaire (PIQ) in the pack will provide a summary of information about their property in one place, helping buyers make decisions about whether to view a property, and ultimately whether to make an offer.
Other improvements announced today to help ensure HIPs reach their full potential include:
Making HIPs available sooner – It is essential buyers are able to see information in the HIP as soon as possible. However, sellers can currently commission and pay for a HIP and then start marketing their property for up to 28 days before the pack is available, meaning some buyers may lose out by making decisions about purchases without benefit of seeing the pack. We are changing the regulations on first day marketing from April 6, to ensure buyers have certainty the HIP will be available as soon as a property comes onto the market, and that sellers get to see the product they are paying for.
Expanding HIP content – Details in PIQ will include flood risk information, gas and electricity safety, service charges, structural damage, and parking arrangements to help buyers make decisions on whether to view and purchase a property. The new PIQ will go alongside other important information in the pack, such as energy performance certificates.
Better service – It is important that both buyers and sellers get a good service from professionals working in the industry; know how the industry is regulated and where to go if they have concerns or complaints. That is why the Government welcomes the Office of Fair Trading conducting a comprehensive study of how the home buying and selling works, looking at competition between service providers and how consumer interests are served.
Continuing to explore more options for consumers – the Government will work with industry to explore ways of making sure consumers have appropriate information about their future property’s condition.
Housing Minister Margaret Beckett said:
“Home Information Packs are potentially a vital aid to consumers who are seeking to purchase a home, and I am firmly committed to ensuring they work as well as possible. That is why the changes made today will make sure consumers are better protected, better informed and better assisted when buying a home.
“It is essential that all buyers are able to see the HIP as early as possible to ensure they are benefiting from this important information, and that sellers are getting to see the pack they are paying for.”
The latest figures on HIPs show that consumers are already benefiting from their introduction. More than 1 million homes now have energy ratings as a result of HIPs, helping home owners to potentially save money on their fuel bills and cut carbon emissions. Greater competition in the property searches market is also leading to reductions in costs with some local authorities reducing their search fees by up to £120.
Previously published independent research by Europe Economics has found HIPs are not impacting on house prices or hindering transactions. The Government fully expects the changes being made today will mean no extra burdens for estate agents, and for example they will still be able to advise potential clients about properties they expect to be coming onto the market. Under the changes made today, from April 6 sellers will need to have the basic HIP before their home is marketed, which is expected to take 3 to 5 days to compile.
Notes to editors
1. Homeowners are required to provide a Home Information Pack when marketing their homes for sale throughout England and Wales.
2. The pack must currently include evidence of title, terms of sale and standard searches. An energy efficiency rating must also be included in the report, giving consumers the choice to assess the likely running costs of a property before they buy.
3. The current temporary provision for first day marketing allows a property to be marketed without a HIP as long as the required documents have been commissioned and paid for (or arrangements for payment made) and there is an expectation they will arrive within 28 days. This temporary provision was due to expire on the 31 December but will now be extended 5 April 2009 when it will then expire.
4. The Property Information Questionnaire will be introduced into HIPs for all properties marketed for sale from 6 April 2009. It was developed with industry and is designed to provide information that is not only important for buyers to know but is also easy for sellers to provide without professional help. The full summary of responses is also being published today and can be found at: www.communities.gov.uk/corporate/publications/consultations.
5. For leasehold properties, the new PIQ will include a summary of the leasehold arrangements, replacing previous requirements to obtain separate documents and speeding up the home buying process. The temporary leasehold information provision requirement will also become permanent. This means that from 1 January 2009 a copy of the lease will continue to be the only extra information required for leasehold properties.
6. The Government has also ended the transitional insurance cover provision.
EPC’s will hit commercial property sales from next week
Many commercial property transactions which have been delayed by financing difficulties and are still in the pipeline months after they should have completed may fall foul of the introduction of mandatory energy performance certificates (EPCs) for commercial buildings next week, which will be a fresh blow to the depressed property market, a leading law firm has said.
From 1 October, all commercial buildings marketed for sale or letting will need an EPC, grading their energy efficiency. The estimated cost of a certificate ranges from £1,500 for a small shop to £50,000 for a shopping centre.
Catherine Diggle, partner at law firm LG, said: “The commercial property market is already depressed and the need to produce EPCs will be seen as an unwelcome and potentially significant extra cost at an already very difficult time.”
Diggle also criticised the government for failing to clarify its position on “not-for-value transactions” – certain deals that may be exempted from the EPC rule.
“The commercial property market is already depressed and the need to produce EPCs will be seen as an unwelcome and potentially significant extra cost at an already very difficult time”
She said: “There is an exception for ‘not-for-value transactions’ dependant on the individual circumstances, but it is not clear what this actually means as clarification is awaited from the DCLG.
“It may not extend to the sale of properties by insolvent companies at a nil price, which will cause difficulties for administrators and receivers, particularly as the costs could be significant and cannot be recovered from the buyer.”
Diggle said it would be “risky” to assume that transfers of commercial properties where no money changes hands are not required to get EPCs.
Home Information Packs – benefiting consumers
The Government today announced a package of measures to help ensure consumers are seeing the vital information in Home Information Packs and are receiving a higher standard of service in the home buying and selling process.
The new measures include: developing a new set of standards with industry on what consumers should expect from property professionals in the home buying and selling process; further building on the quality of information in the packs; working with industry to ensure that consumers are fully seeing and benefiting from the HIP, including the EPC, early in the process; extending until the end of the year the provisions enabling consumers to market their home as long as they have ordered and committed to pay for a HIP, and the provision requiring the lease to be included in the HIP for leasehold properties.
The latest figures on HIPs show that consumers are already benefiting from the introduction of Home Information Packs. More than 700,000 homes now have energy ratings as a result of HIPs, helping home owners to save money on their fuel bills and cut carbon emissions. Greater competition in the property searches market is also leading to reductions in costs with some local authorities reducing their search fees by up to £120.
Housing Minister Caroline Flint said:
“Home Information Packs are already bringing benefits to consumers. Property search costs are falling and new information on energy efficiency can help cut carbon emissions and enable prospective purchasers to get a better idea of the likely costs of energy bills.
“But we want to do more to improve the HIP and the home buying and selling process for consumers. Developing a new set of standards for industry is an important next step in further ensuring all consumers get the highest quality of service when buying or selling a home. We also want to ensure all consumers are seeing the vital information in a HIP early in the process so they can fully benefit.
“Alongside the development of a new industry code, we will continue to work with the industry to promote higher and consistent standards of practice on the delivery of HIPs.”
Today’s announcement includes:
Work to develop a new set of standards for industry involving leading bodies such as the RICS, NAEA, and the Law Society. This aims to bring together best practice within the industry into a single set of standards that all consumers can expect from property professionals in the home buying and selling process, including redress arrangements, the provision of Home Information Packs and delivery of local searches.
Work with the industry to ensure that agents and HIP providers understand and act on the requirement to prepare the HIP as soon as the EPC is produced, so that it is available to potential buyers early in the process.
Develop in partnership with the property professionals, the means for capturing consumer friendly information for inclusion within the HIP, such as property fixtures and fittings, access and boundries. This will draw on the lessons learnt from our Area Trials.
New regulations coming into force for new homes
he Housing Act 2004 (Commencement No.11) (England and Wales) Order 2008 was made on 13 March and comes into force on 6 April 2008. This completes the application of HIPs to all new build properties. The HIP duties currently apply to all types of property sale, including the sale of new homes but excluding homes built under the most recent Building Regulations (i.e. Regulation 17C of the Building Regulations 2006). We have previously announced the intention to extend the HIP duties to these properties from 6th April, when the requirement under the 2007 EPBD Regulation for all new homes to have a SAP-based EPC on construction come into effect, and the Order achieves this.
Key facts
From the 6 April 2008 all new homes will require an EPC and Recommendation Report when physically complete.
The EPC will be based on the SAP rating which is currently required to comply with Building Regulations. This demonstrates that new homes meet the targets for energy performance that are part of the Building Regulations.
The EPC must be produced by an Energy Assessor who is accredited for On Construction Energy Assessment. The EPC is based on SAP rather than RdSAP which is used for existing homes.
When the home is physically complete, an EPC should be produced and given to the owner of the home. Building Control will not issue a completion certificate until they are sure this has been done.
If you are marketing a home off-plan, you will need to have a PEA (Predicted Energy Assessment) in the HIP to provide to potential buyers. Once the home is physically complete the PEA in the HIP should be replaced with an EPC and Recommendation Report.
PEAs should be based on the predicted SAP rating for the home. This will be available from calculations done at the design stage and is a number between 1 and 100. A spreadsheet template is available to be able to represent the rating in a graphical form for potential buyers.
Each building within a development will require its own EPC (although reports can be cloned for identical dwellings and will not need to be inspected individually).
Hips reduce speculative marketing
The government’s home information pack scheme (Hip) scheme has begun to make an impact on the property market, with a fall in the number of speculative sellers in decline.
According to AA Legal Services the Hip scheme has “undoubtedly reduced speculative marketing” – potentially to the benefit of the market.
“Hips naturally focus the mind of the seller before marketing their property,” said James Molloy, product manager for AA Legal Services.
“We hope that now only those who have a genuine, considered desire to sell their property enter the market at the front end, and Hips have undoubtedly reduced speculative marketing.”
Hips were made compulsory for all properties from December 14th, completing a three-stage rollout process.
And their impact is likely to be positive in the long term, according to the AA.
“There are many commentators who will argue that speculative rather than deliberate marketing provides for fluidity of supply in the market that ‘oils the wheels’ of the property market, and that view undoubtedly has some merit.
“But it is also true such lack of commitment has contributed to, in my view, an unacceptable level of aborted transactions in the pre-Hips era,” explained Mr Molloy.
Before the scheme was introduced as many as one in three property sale chains were broken, according to the Financial Times.
This may, now, be about to change.
“It will ultimately be for economists to provide the fullest answer, but my view is that where we see a reduction in broken chains, a large contributing factor is the introduction of Hips,” concluded Mr Molloy.