The government’s u-turn on mandatory Home Condition Reports (HCRs) in Home Information Packs (HIPs) has left 4,500 home inspectors outraged and disillusioned about the future of the job they were in various stages of training for. Having made the HCR a voluntary element of the HIP, the government has compounded their resentment by introducing an energy inspector role for the still mandatory Energy Performance Certificate (EPC) component.
With HCRs looking to remain voluntary, many home inspectors believe there will be little demand for their expertise as most home owners will not pay for an additional report that could highlight problems with their property. They also believe that they will have to compete with the newly introduced energy inspectors, despite spending much more time and money on their qualification.
In light of this double blow, Jim Gillespie, principal at Independent Financial Services, has founded the Home Inspectors’ Organisation (HIO), which already has 350 members. The HIO is currently preparing to take High Court action against the government for vexatious damages, costs incurred and loss of future earnings.
It is now looking to launch a Judicial Review by an 18 October deadline and it is confident it can succeed in getting compensation.
Up the garden path
Gillespie believes that home inspectors have wasted time and money training, which they thought would guarantee them an income. He says the government led them up the garden path by allowing individuals to pay thousands of pounds to train for a career that is now essentially void.
For two years, the Office of the Deputy Prime Minister (ODPM), now the Department of Communities and Local Government (DCLG), said it would make HCRs mandatory before government did a u-turn. Gillespie said: “Our QC is confident we will succeed in light of the evidence we have against the government. We have literature from the ODPM, information we received from government websites and the material from the numerous roadshows myself and others from the organisation attended. They all made it clear that HCRs would be a compulsory part of legislation.”
Yet, despite the industry at large supporting the home inspectors battle there is scepticism over how successful they will be. Nick Gardner, director at Chase de Vere Mortgage Management, says: “Many companies invested a great deal of money in training for something the government said would happen. This is not the first time the government has done a u-turn at the cost of the financial industry. I sympathise with the home inspectors and wish them luck but I don’t think they will get very far. We saw a similar thing happen with the Self Invested Personal Pensions (SIPPs) u-turn. The government needs to think more carefully and clearly before issuing policies that the industry interprets as a done deal.”
A step too far?
Other concerns raised by the industry as to the success of HIO’s Judicial Review is that there is still a chance the government will make HCRs mandatory. In addition, some information pack providers say they will still have jobs for home inspectors despite the u-turn.
Alan Dring, sales director at e-Conveyancer, says: “I think compensation is a justifiable request. However, I think they are unlikely to get recompense. I’d be pessimistic about their chances. The reality is there is still a chance that HCRs will be made compulsory, so recompense would be premature.”
However, Gillespie counters: “We asked the DCLG how successful the voluntary HCR would have to be before the government makes it mandatory and it is refusing to answer. I don’t believe it will ever make HCRs mandatory now.”
Rob Clifford, managing director of Mortgageforce, believes the government will have a tough job defending the claim that the plans for HIPs have not been a shambles.
He comments: “I concur with the HIO that this rollercoaster of strategy and u-turns is far more than an administrative embarrassment – it has cost many people, thousands of pounds and hours of time in abortive investment. When you add the extent to which people’s livelihoods and careers have been damaged, you can see just how far reaching the problem has become.”
The general consensus from the mortgage world is that the government made a clear commitment to HIPs, with or without compulsory HCRs, and home inspectors have lost out. What happens next lies with the courts.
