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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Leaf says: “RICS has not withdrawn the judicial review.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.

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