View more on these topics

As time goes by in RICS’ bar

Tanya Powley assesses the impact of the two-month delay to Hips.

The Government is under attack from all quarters after its humiliating U-turn last week delaying home information packs just a week before they were set to be introduced.

The two-month delay came after the Government received an interim order preventing energy performance certificates being included in Hips until a court has fully considered an application by the Royal Institution of Chartered Surveyors.

Department for Communities and Local Government Secretary Ruth Kelly made an emergency announcement to Parliament that the introduction of Hips has been delayed until August 1. They will then become compulsory for sales of houses with four or more bedrooms and phased in for smaller properties.

Kelly told MPs that to prevent lengthy legal delays, the Government had reached a pragmatic way forward with RICS that gives certainty and allows it to get on with implementation.

But RICS housing spokesman Jeremy Leaf claims it has not agreed to what Kelly outlined in Parliament. He says RICS has only agreed to the stay of the judicial review if the Government provides a 12-week consultation period on EPCs, publishes a regulatory impact assessment and pays RICS’ legal costs.

Leaf says: “RICS has not withdrawn the judicial review. It has been stayed and can be reactivated if the Government fails to deliver on its obligations. We will be examining the new proposals in detail and will continue to work in the public interest on homebuying reform and climate change.”

Proponents of Hips have criticised RICS for derailing the scheme. Hip provider LMS director of marketing and new business Dominic Toller says: “At the moment, the agenda seems to be being run by RICS and the Law Society, both of which have vested interests in keeping the current complicated and convoluted home transaction system in place.”

Association of Home Information Pack Providers director general Mike Ockenden says: “It is difficult to understand how RICS can claim that it is acting in the public’s interest by denying them this much needed reform and the benefits of reduced carbon emissions as a result of the EPC.”

The Government is now proposing that Hips and EPCs will start on August 1, implemented on a phased basis starting with the sale of houses with four or more bedrooms. As a temporary measure, it will allow EPCs to be up to 12 months old when a property is put up for sale. It says it will consult further on the long-term arrangements for the age of EPCs.

Spicerhaart Group chief executive Paul Smith says the proposed revised regulations are still “simply unworkable”.

He says: “A postponement until August 1 will give the Government the opportunity to finally withdraw the legislation and re-evaluate how it should proceed. If the Government does this, it will become apparent that it should scrap Hips and simply introduce the EPC, the only document that is required under the EU directive.”

John Charcol senior technical manager Ray Boulger says there is no reason to rush as the EU directive to bring in the EPC does not come into force until January 1, 2009. He says: “All the Department for Communities and Local Government needs to do is to make all aspects of the Hip voluntary except the EPC, going one step further than last year when they made the home condition report voluntary.”

Commentators have also pointed out the effect of the delay on energy assessors who are already trained. Econveyancer sales director Alan Dring says: “What are the energy inspectors who are accredited meant to do for the next two months? Will they be compensated for loss of income? I very much doubt it.”

He also questions the impact on Hip providers which have invested millions of pounds to meet the June 1 deadline. Dring says businesses should refuse to cooperate with any legislative proposals unless they are given a minimum guaranteed breathing space of six months between legislation being passed and implemented, during which the Government cannot make any further changes.

But Bespoke Hip Company chief executive David Collett believes the delay is good for the industry. He says: “The delay is of benefit to mortgage advisers as they have recently started to see the real sales benefit and this new-found breathing room will enable them to truly get to grips with the opportunities available to them.

“As for the phasing beginning with bigger properties, the logic is not immediately obvious to many of us in the industry, but if it allows Hips to be brought in, in an orderly fashion, with minimum hassle, then this phased approach is no bad thing.”

Opposition parties believe the U-turn will create more confusion, with the Tories calling for a radical rethink of the policy. Tory Shadow housing minister Michael Gove says: “Isn’t it the case that this is a desperate last-minute retreat designed to ensure that the minister of housing and planning is airlifted out of the department by her friends in the Treasury in a future reshuffle so she does not have to cope with the chaos she has created?”

He says it is tragic that confidence in the industry, the stability of the housing market and the battle against climate change have all been damaged by Government arrogance and incompetence.


Thames River rules out single-country funds for star duo

Thames River says it will not launch single-country multi-manager funds for Gary Potter and Robert Burdett because it does not believe there is sufficient adviser demand.Investment director Michael Warren says IFA demand for such portfolios earlier in the decade has waned.He points to the European, North America, Asia and Japan funds that Burdett and Potter […]

Medical notes

How the definition of full medical evidence swayed the diagnosis in the Smith and others case.

FSA warns lenders again of sub-prime crash

The FSA has renewed its warning that UK sub-prime could go the same way as the US market and says lender vulnerability is beginning to show through.Speaking at the Building Societies Association annual conference in Bournemouth last week, FSA managing director of retail markets Clive Briault said all lenders, including building societies, should ensure they […]

Define time

Sesame head of protection research Dale Tranter, sets out the changes being made by product providers to their critical-illness insurance conditions as part of the ABI’s new guidelines.

The Perils of Passive Investing

The era of loose monetary policy created an environment that rewarded passive investors in the US. However, with the US raising interest rates for the first time since 2006, Felix Wintle explains why he believes active investing will be more important than ever. In the video Felix discusses: The rising cost of capital and its […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm