On the whole, the industry has coped well with the introduction of Home Information Packs (HIPs) for initially four-bedroom and now three-bedroom homes. However, many hurdles still need to be overcome and the next three months will be crucial.
Drop in production
Fewer HIPs have been produced than originally expected, but this is not because their introduction has dissuaded vendors to sell. The credit crunch has naturally had an impact on the level of activity in the housing market. Instructions have been significantly lower than this time last year, and this is reflected across all housing stock.
However, it is not only the market conditions that have led to a drop in production of HIPs. Some estate agents, particularly the smaller agents that are less prepared for HIPs, are still backdating ‘instructions to market’, for properties that require one. This allows them to avoid HIPs altogether.
Also, the introduction of HIPs has brought to light various problems with the delivery of property searches. Local authorities and utility companies have been widely exposed for causing the delays in the home buying process and the delivery of a HIP. They have faced criticism from within the industry on the grounds that their own searches take too long, their fees are too high and access for personal searchers are overly restrictive.
However, the problems with searches are not the only factors causing delays. We are also finding that the timescales for a HIP instruction to completion is longer than originally anticipated because many vendors aren’t in a hurry. There is no rush to pay for their HIP or provide access to their home for the domestic energy assessor to carry out the Energy Performance Certificate (EPC).
Lack of urgency
Vendors’ lack of urgency is understandable; they are still able to market their property without a HIP, as long as the pack has been instructed. This is set to change by 1 January 2008, as the grace period which the government introduced earlier in the year draws to a close. The transition period was put in place to enable local authorities to have systems for providing searches in place to cope with the changing market. However, the jury is out and it may well be the case that the transition period will be extended.
As well as the grace period coming to an end, many in the industry anticipate that the full roll-out will take place before Parliament goes into recess, by the end of the year. This will be warmly welcomed, as every part of the property chain requires a pack in order to see the real benefits. However, the government needs to lay down the commencement order as soon as possible. Keeping the industry guessing as to when the next roll-out will take place is far from ideal.
The government’s initial concern that there will not be enough energy assessors has now been put to rest. There are now over 5,000 fully accredited domestic energy assessors ready to provide EPCs, a substantially higher number than the government’s target of 3,000 for the national roll-out of HIPs.
Responding well
The industry has responded extremely well to the legislation. The HIP provider industry has had to adapt to the changing environment very quickly and adopt new technologies and systems to ensure HIPs are delivered to consumers efficiently. Market leaders have joined forces to meet the new demands from the HIP industry, as leading HIP providers link up with for example, unique payment scheme and software companies.
The new HIP industry has had to outlay a considerable amount of capital, to set up their business offering, and in the current economic climate many HIP providers are certainly feeling the pinch. The next few months will see many smaller and opportunistic HIP companies being squeezed out of the market. The most successful HIP providers will be in it for the long run. The benefits of HIPs for the consumers and the industry in the long term is certainly worth the wait.
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