There's a good idea somewhere in HIPs

We should not write off the Home Information Packs - they might help first-time buyers and the environment

Published in the Evening Standard

It’s been like watching a train wreck - in very slow motion. The government’s plan to change the way we buy and sell houses – by obliging sellers to pay for a detailed Home Information Pack (HIP) before they put their property on the market – has crashed and burned before our very eyes. On Tuesday, cabinet minister Ruth Kelly finally had to face a jeering House of Commons to announced that HIPs would not be legally required on June 1 after all, but would kick in on August 1 instead.

That was not the only retreat. Now only four-bedroom houses will need a HIP: smaller properties will be included at some unspecified time in the future. And all this on top of last year’s climbdown, when the government dropped its requirement that the new packs include a “home condition report,” so eliminating the need for buyers to commission a survey.

Even if you don’t go along with the Tories’ chant that this is a fiasco, demonstrating the government’s “arrogance and incompetence,” you’ve got to admit it looks a mess. The usual rule when governments try to make a big change like this is to get all the relevant players – the “stakeholders,” in ministerese - on side. HIPs have indeed got almost all the relevant stakeholders in the housing market – estate agents, surveyors and lawyers – on the same side. The trouble is, they’re all against the government.

Some of their objections do bite hard, especially in London where the ever-surging housing market looks out of control at the best of times. Estate agents are warning of a rush of sales to avoid the August 1 deadline, so warping an already warped market. What’s more, they predict a new form of linguistic deception. To add to phrases like “opportunity for development” (meaning “it’s a dump”) or “part of a lively community”(meaning “noisy”), make way for “three bedrooms and a study” – meaning, “it’s a four-bedroom house but we didn’t want to do a HIP.”

Others have warned that HIPs could incur extra costs, especially in London where one estate agent initially predicted charges of £1000 (before the home condition report element was dropped). The critics maintain their view that, since the burden of cost will be placed solely on sellers, would-be buyers will still be able to pull out of planned sales as frequently as they do now – and that therefore HIPs will fail to achieve one of their key aims, reducing the number of deals that fall through.

And yet, despite everything, it would be a mistake to turn against HIPs. Yes, the handling has been a mess – but underneath all that there still remains a sound idea.

First, it’s no bad thing if sellers face a slight hurdle before coming into the market. The phenomenon of homeowners “testing the water” sounds harmless enough – until you’re on the receiving end of it. Several years ago, my wife and I went to look around a house that we instantly fell for. We put in an offer; it was accepted; we spent money on a survey. And at the end of it, we got a note from the owners saying that, er, they didn’t want to sell after all. Of course that was their right. But it’s possible that things would never have reached that stage – sparing us the expense of a survey – had the buyers first had to go through the cost and hassle of compiling a HIP.

What’s more, it’s surely a matter of common sense to do just one survey for each house, rather than getting a new one done for each potential buyer. Common sense, that is, for every one except the chartered surveyors themselves: they spotted a threat to their business and organised fast to block it. Getting the home condition reports dropped last year was a neat bit of self-protection by the survey industry – but it doesn’t mean it’s right. The logic of the initial idea – getting a single, legally reliable survey for each house before sale – still stands.

The same is true of the element not stripped out of the proposed HIP: namely, legal “searches.” Once again, there’s no need for those to be paid for several times over: better to get the buyer to do it once. And HIPs have already succeeded in driving the mysterious “searches” process – whose costs are usually hidden in solicitors’ bills – into the open. Indeed, sensing the possibility of competition, 25 local authorities have already cut the costs of their searches service.

The crucial thing to remember is that most of these charges are not new: we pay for searches and the like already, in the normal process of buying a house. The difference is that HIPs shift the cost onto the seller. Since most people who are selling a property are also buying one, that should cancel itself out. The only exception will be for first time buyers, who will now be spared those charges. In London especially we know how hard it is for first time buyers. Surely if there’s even one small thing we can do to help, we should do it.

All of these considerations are dwarfed, however, by the centrepiece of the HIPs – the new energy performance certificate, the document which shows how energy efficient (or not) your home really is. Right now, all white goods have an energy rating from A to G. Under HIPs, so would every house in the estate agent’s window.

OK, it won’t end global warming overnight. But it could make a substantial difference. More than a quarter of the UK’s carbon emissions come from our homes, with the leaking of heat from poorly insulated walls and roofs just one example. We can remedy that for newly-built homes, but we have to address the houses that are already here. So far, too many of us put off the task of insulation and the like to the distant future. But HIPs could make us act.

“If you go into Curry’s or Comet now, you just don’t see a D-rated fridge any more,” says housing minister Yvette Cooper. Being forced to declare their energy rating changed manufacturers’ behaviour. Cooper believes the same would happen to us as homeowners. Just as we now might buy “new cushions or a rug” to make our home more appealing, so we might change the boiler or install efficient light bulbs, to improve our rating and increase our chance of a sale.

So yes, maybe the HIPs plan has not been a model of political craft. But there’s a good idea here. Lets not wreck it.

Posted on May 24, 2007 04:36 PM

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