Government To Proceed With HIP Final Roll-Out

 Final Roll-Out

 Final Roll-Out: The Government reported that sixty per cent of the housing market is now covered by HIPs. and the criteria for roll out to the rest of the market have now been met. The press release 22nd November 2007 said it is therefore the government’s intention, to complete the phased roll out by extending coverage to the rest of the market from 14th December 2007.

First time buyers of one and two bedroom homes will be the main beneficiaries as they will now get important information about their new home for free. Information such as searches for which they would previously have had to pay will now is included in the HIP paid for by the seller, reducing the costs of the first step onto the property ladder.

But all householders will benefit from having detailed information about the energy efficiency of their home, and measures to save on their fuel bills and cut carbon emissions. Home buyers could potentially be eligible for hundreds of pounds to get help with insulation or other improvements.

According to Government figures, two hundred thousand Energy Performance Certificates have been generated since the summer. As set out in the criteria of 11 June there are now sufficient energy assessors and home inspectors fully qualified and accredited to provide Energy Performance Certificates for all homes bought and sold. Some 5794 people are now accredited

The analysis of the early phase of rollout of HIPs found that the average rating for homes was an E, and we know that approximately one-fifth of all homes are likely to get an F or G rating. This means that basic measures could significantly cut both fuel bills and carbon emissions. The Energy Savings Trust has also estimated that homeowners could also save around £300 a year on fuel bills from implementing the recommendations in the Energy Performance Certificate.

The Government is also proposing to establish a new Green Homes Service offering those buying or selling a home with an F or G rating free or discounted help with energy efficiency measures, by linking them up with grants and loans provided by energy companies and others. Home buyers could potentially be eligible for hundreds of pounds to get help with insulation or other improvements.

In addition, the government has also conducted monitoring and analyses of the implementation programme to ensure continued smooth roll out. Early monitoring shows:

  • HIPs are taking on average seven to 10 days to prepare.

  • The majority of property, and drainage and water searches are being delivered within five days.

  • Energy Performance Certificates (EPCs) are being prepared on average within two to four days.

  • On average, a HIP costs between £300 and £350. Most of these are not new costs, as they cover the cost of searches and other documents which have simply been transferred from buyer to seller at the beginning of the process. The Energy Performance Certificate (EPC) is of course new but provides consumers with valuable information of the costs of running their home.

  • Competition from HIPs is reducing the costs of average property searches. Eighty-five local authorities have already reduced their charges by £30 on average.

The Government have also commissioned and considered extensive analysis by Europe Economics on the impact of HIPs on the market. It is intending to publish their independent report which includes modelling on the impact as well as analysis of the first few months of implementation. Presently it finds no evidence of any impact on transactions or prices, although there is a predicted short term impact on new listings as sellers change the timings of their listings. It concludes that the impact on listings is short lived, and the impact on the market is marginal compared to the wider factors.

Dr. Peter Williams (who is a member of the National Housing and Planning Advice Unit) and other leading economist have been approached to consider whether changing housing market conditions meant we should change the approach to completing the roll out. Their conclusion presented strong arguments for continued rolling out as planned, and that further delay could cause greater difficulties and uncertainties in the market.

In the light of this evidence the Government will lay the commencement order to extend HIPs and EPCs to one and two bedroom properties from 14th December 2007. In order to ensure continued smooth implementation, they are also extending the temporary provisions on first day marketing for all properties from 1 January to 1 June 208, providing flexibility for sellers as part of the roll out to one and two bedroom properties.

The implementation of Home Information Packs so far, and the work of the Stakeholder Panel, has also highlighted further improvements that are needed to benefit consumers.

Research shows HIPs has already led to improvements in the delivery and cost of searches, with significant reductions in the cost of searches, and in some areas, substantial reductions in the delays in producing searches. However, there are still wide variations in costs and services and the Government want to see further improvements for consumers. It is promising to publish guidance on access and charging, for local authorities and personal searchers, with the aim of speeding up searches and delivering a fairer deal for consumers.

Ted Beardsall, Deputy Chief Executive of the Land Registry (and member of our Home Buying and Selling Stakeholder Panel) have been approached by the Housing Minister, to advise on what else could be done to improve the search process, ensuring better quality and timeliness of information, and improving value for money for consumers.

Stakeholders have also raised concerns about the costs and timeliness of leasehold information, and the impact that this will have on Home Information Packs when one and two bedroom properties are included given the higher number of leasehold properties. In the majority of cases the stakeholder Panel expects leasehold documents to be readily available and easily provided as part of Home Information Packs.

The Stakeholder panel are also aware that some leaseholders, whether in the pre-existing system or creating a HIP, can find the relevant documents difficult to obtain quickly. This further hampered with some consumers having to face disproportionate charges to access their documents.

As leasehold information is an important part of the home buying and selling process, and is already generally paid for and provided by the seller, the Government continues to believe there are considerable advantages to consumers from having leasehold information early on in the Home Information Pack. But to ensure continued smooth roll out, it is anticipated that the Housing Minister will phase the introduction of leasehold information in response to stakeholder concerns.

To assist further the Government is proposing to temporarily amend the HIP regulations so that the lease document itself must be included, but other leasehold information will be introduced as a requirement at a later date (preferably in six months time). This will allow HIPs for one and two bedroom properties to bed down in advance of leasehold information being required.

In the interim, Ted Beardsall is to advise the Government and the Home Buying Stakeholder panel on what more can be done to improve the timeliness and cost of leasehold information, alongside the work on searches.

From April 2008, the Government will begin to roll out EPCs for newly built homes, as well as across commercial property for sale, rent or construction. By October 2008 all public buildings will be required to have a displayed certificate.

All these measures are designed to promote the interests of the consumer, with the Government continuing to actively monitor the rollout of HIPs and energy performance certificates, and the home buying and selling process. The introduction of HIPs is part of a wider programme of reforms to home buying and selling including e-conveyancing and better redress, which aims to provide consumers with a clarity and transparency. The Government wants to reassure consumers that it will act and respond where further improvements are needed.


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