Not for a long time has any part of the home-buying process being so hotly contested within the property market, with firms sniping back and forth to make their points heard.
In the red corner are Pack supporters the Association of Home Information Pack Providers (AHIPP), HIP Payment Services and LMS, while tearing at the ropes in the blue corner is the opposition; the Royal Institute of Chartered Surveyors (RICS) the National Association of Estate Agents (NAEA) and Spicerhaart.
There is no denying that each firm is fiercely outspoken on the matter, with every new set of statistics acting like a red rag to a bull – regardless of which side of the fence the commentator sits on.
Wider implications
The issue of the full roll-out aside, the latest fuel added to the HIP fire in recent weeks is the NAEA’s suggestion that the Packs have had a profound influence on the slowdown in country’s housing market.
Noting that 83 per cent of NAEA members had seen requests for market appraisals drop in October, the Association pinned the blame firmly on HIPs, provoking the AHIPP to once again bite back at the NAEA’s “futile campaign.”
However, the NAEA has a point and while the AHIPP champions the Energy Performance Certificate (EPC) and the positives for first-time buyers, these benefits have only so far functioned in theory with the rest of the Packs performing less well than desired.
In reality, Spicerhaart found that only 10 per cent of homebuyers are actually paying attention to the EPC that comes with a property. Contrary to the objectives behind the certificate, homebuyers are instead using the EPC seems as a gauge to help them visualise the financial commitments they will have to make to bring the property up to scratch.
In fact the bigger impact of the EPC could actually be felt within the country’s rental market when they become compulsory for landlords letting property on or after 1 October 2008.
Instead of helping identify areas of improvement, EPC’s are likely to actively deter tenants. This is solely because there is a lot less emotion is invested in the search for a rental property and any tenant who does not feel a property is up to scratch will simply cross it off the list and look elsewhere.
Another flaw rears its head when looking at the impact the pro-HIP camp see the Packs having upon first-time buyers. While they are correct in their argument that first-time buyers are at an advantage because the seller is the one that buys the HIP, very few will have actually benefited from this to date.
This will undoubtedly change once we enter into the full roll-out on 14 December, but the ‘enviable position’ that Jeff Smith, chief executive of HIP Payment Services puts the first-time buyers in is in fact only the case if the buyer in question is looking for a property with three or more bedrooms.
The bigger picture
The fact that these providers are slamming each other on a fairly regular basis begs the question as to whether their venom should be solely directed towards the government instead.
“Preferably the government should scrap HIPs immediately and the whole debacle should be written off as a mistake,” said Paul Smith, chief executive of Spicerhaart.
Indeed the excessively cautious governmental approach to the scheme undermined its own position in the process after bowing to pressure to move the launch date. Luckily though, it has since taken steps to rectify this mistake realising that, as Smith puts it: “The worst possible scenario [would be] to allow the market to carry on as it is with a half implemented initiative which is proving to be of no use at all.”
With the second half of the year now bookended with HIPs, hopefully the fiasco can be put behind the market going into 2008, with the critics shifting the focus onto how best to adapt to the scheme and ultimately improve its reception amongst consumers.
Indeed, one thing the Prime Minister inadvertently confirmed when he ruled out a snap election in October was that HIPs are here to stay as long as his feet remain under the table at Number 10.
