The outlook for the housing market and mortgage industry in 2007 got a whole lot simpler when the government changed tack on its Home Information Pack (HIP) policy by removing what many see as the most important part of the HIP – the Home Condition Report (HCR) as a mandatory component.
However, it remains important for intermediaries to prepare for their arrival, particularly in light of the possibility that estate agents could now be in an even stronger position.
Focusing on EPCs
Now that HCRs are to be a voluntary component of HIPs, the focus has turned to the new Energy Performance Certificate (EPC). The government is committed to introducing EPCs in order to comply with the EU Energy Performance of Building Directive and HIPs are, of course, the ideal delivery vehicle.
Perhaps in an effort to appease the home inspectors left high and dry by the HCR announcement, the Department for Communities and Local Government (DCLG) has stated that only ‘qualified energy inspectors’ will be permitted to issue these certificates. However, this could make the production of EPCs too complex. Several energy companies already offer a type of energy assessment. These are produced either by representatives visiting the client’s home, or by the client going to their website and completing an online questionnaire that results in an energy assessment report being produced. The fact is software can be written to produce these certificates, based on the input of simple data about a house.
Given these circumstances, there is little to be gained from having fully qualified surveyors and home inspectors having the monopoly of EPC completion, especially given the lack of earning potential compared to the now-optional HCR.
A valuer or negotiator working within an estate agency office already has to visit a client’s house to take room measurements and gather more information about the property being offered for sale. Surely these people represent a far more efficient method of capturing the data on which the energy assessment can be made?
The DCLG has announced that a standalone ‘energy assessor’ qualification is to be made available from February 2007. We believe that a valuer or negotiator is perfectly positioned to carry out these extra checks in order to produce an EPC, at minimal extra cost to the client. With estate agents being responsible for EPC data capture, the process would be speeded up – the EPC will be completed prior to the property being marketed and can form part of the HIP. The seller, therefore, only has to make one appointment rather than having to make a separate one for an energy assessor to visit.
For the sake of a few days’ training to gain the standalone qualification, the estate agent will surely become the main provider of EPCs?
E-conveyancing
Running alongside the HIP proposals has been perhaps an even more important project, driven by the Land Registry. This is the move to overhaul the conveyancing process and move to an electronic system. Several years ago, the Land Registry embarked on a program to re-engineer the conveyancing process in England & Wales to reduce delays and complications, and to increase efficiency in the property buying process.
The vision of Land Registry is to provide a ‘world class’ conveyancing service and its proposed electronic system will seek to make each transaction in a chain transparent through the development of a ‘chain matrix’. This will allow authorised persons instant access to the progress of each transaction in the chain and facilitate a more co-ordinated exchange of contracts and completion.
The Land Registry aims to make all communication electronic and introduce simultaneous completion and registration, bringing greater certainty and making information on the land register up-to-date. A new ‘Instant Electronic Funds Transfer’ will support a system of e-conveyancing by improving the financial aspects of a property transaction at exchange and completion.
By 2009, it is hoped that e-conveyancing will be the ‘norm’ for all parties in the conveyancing industry. There’s no doubt it will make an enormous difference to the house buying and selling process. One could argue that e-conveyancing will do what the HIP was initially proposed to do.
If one takes into account EPCs, HIPs and e-conveyancing, they all add up to a government still determined to improve the house buying process in England and Wales. While one initiative may have been reduced in scope, others continue to progress.
HIPs will be important to brokers on a number of fronts – to help secure those all important leads and to provide a complete home moving service for customers. Ultimately, whoever supplies a seller with their HIP will be ideally placed to sell them their mortgage on their next home and other related financial services.
Brokers are in a strong position to help educate the public about HIPs. The perception by some that HIPs have been scrapped does nothing to help inform the public. Work needs to be done to begin educating home owners and advisers are in an excellent position to do this. Every adviser out there should have a solution in place. Choosing the correct provider needs careful consideration and takes time, so now is the time to act.
