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Hip task

Guy Anker looks at the latest changes to home information packs.

Compulsory home information packs are less than two months away but mortgage brokers are not expecting a huge rush of business to beat the June 1 deadline.

A number of reports over recent weeks have suggested the mortgage market could become swamped by desperate sellers eager to avoid paying the estimated £300-£500 cost of a Hip.

But brokers do not believe the watered-down Hips will have such a huge impact on the housing market, mainly because the cost is a drop in the ocean compared with the price of a property.

This is especially so after last year’s Government U-turn that saw home condition reports dropped as a compulsory component to subsequently knock down the price of Hips that some had feared could have reached four figures.

Chase de Vere Mortgage Management director Nick Gardner says: “I don’t see it being the boom some people think it will be. It may have an influence on the people considering whether to sell at the moment but it is not going to get people that were not considering selling in the next few months to sell suddenly.

He says: “People may just add £500 to the asking price. It is not a great expense so people will not go through the inconvenience of moving early just for that. If home condition reports had been a compulsory feature, then maybe more properties would have been on the market but even then we would not have seen the boom some people are talking about with a glut of properties up for sale.”

London & Country head of communications David Hollingworth says: “We may see a few more properties on the market before June and less after but that also depends on what buyers are doing.

“So the market supply may increase but I do not think it will be a flood. It will not make people move now that may have done in a year especially with the slimmed-down packs, as £300, for instance, is not quite as frightening as £700.”

Brokers may not see a surge in business but there are still concerns that they are not embracing Hips as they should be which could see business lost to estate agents, many of whom are beginning to boost their mortgage broking arms.

The issue has been taken up by the Association of Mortgage Intermediaries over the past year to make sure its members are taking Hips seriously.

Last August, after the Government U-turn on Hips in July, the Association of Mortgage Intermediaries launched a factsheet for its members, giving details on the regime but also stressing the importance they will play in the market.

Hollingworth says: “Brokers cannot ignore Hips. The issue for the consumer is who to get the Hip from and the obvious answer is the estate agent but it is not the only answer. Maybe the removal of the HCR took some focus away but the key thing for brokers is that they need to embrace Hips otherwise they are putting the ball in the estate agents’ court.”

The raising of this issue comes after the Government made its latest change to the Hip regime by forcing sellers whose properties are on the market before June 1 to have a Hip by the start of 2008 if their property is still on the market then. The previous deadline was March 31, 2008.

Association of Home Information Pack Providers director general Mike Ockenden says: “The regulations offer clarification and industrywide reassurance that Hips will happen – there is no going back.

“I welcome these regulations which have introduced a series of sensible and pragmatic steps to support the smooth implementation of Hips, taking on board industry recommendations and concerns.

“We will continue to work closely with Government and the relevant stakeholders to ensure a seamless and effective introduction of Hips for the benefit of the consumer.”

As well as confirmation of the date that Hips must be introduced for properties already on the market, the regulations also confirmed that the energy performance certificate, now marketed as the focal point of Hips by the Government, will be the first document in the pack.

They also stated that properties that cannot have an EPC — such as those bought off-plan — will have a separate energy assessment included, while the need to refresh time-sensitive parts of the Hip will not arise where the property is re-marketed by the same seller within one year.

Easier2Move sales and marketing director Karen Babington says: “We welcome this announcement on Hips as it is an inescapable indication that these packs really will be introduced on time. The changes that have been made to the legislation since January are relatively minor and can be seen as an indication that the Government has listened to the concerns raised by companies operating within this sector.”

However, the anti-Hip movement is still in full force. Property portal founder Henry Pryor says: “The idea of introducing these watereddown Hips as a tool to speed up the house-selling process is both mistaken and expensive. In particular, the requirement to have EPCs produced for every house before it is marketed is madness.

“Energy performance certificates alone are expected to cost in the region of £150. Given that only about half of the two million plus properties that are marketed each year actually sell, this means that there will have been no need for an EPC to have been produced for around one million homes each year.

“Ironically, a strategy designed to save energy via EPCs and to save money on abortive moving costs is going to end up costing homeowners a lot more.”


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