A Labour election manifesto pledge back in 1997, HIPs’ proposed introduction on 1 June 2007 drew a line in the sand, as everyone in the industry came down either for or against them. No issue was more divisive prior to that 1 June launch, with squabbling over the details and whether HIPs would actually work happening right up to the last minute. Even the government was in two minds and slowly, confidence in the packs was eroded. Arguably the final straw was the removal of a compulsory Home Condition Report (HCR) – seen by many as the vital component of the packs. Then 1 June became 1 August as the full implementation of HIPs was scrapped in favour of a phased launch.
For the defence
Throughout this period and to this day, the Association of Home Information Pack Providers (AHIPP) has been leading the case for the defense and Mike Ockenden, the organisation’s director-general, has been travelling the length and breadth of the country trying to make sure the packs come to market.
“If you look at the government figures, the house selling process is getting worse,” Ockenden insists. “Fallouts are increasing, the time it takes to complete the process is going up all the time and the industry’s attempts to sort it out so far have been a fallacy. Now it’s our turn to have a go because until the process is re-engineered, we will continue to see a large number of sales fall through. Consumers badly need this reform as the reality is we have the worst home buying process in Europe.”
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Making sense
The idea behind the packs at the beginning seemed to make a lot of sense. By providing information on the property at the start of the house buying process, the seller was committed to marketing their home through the investment in putting together a HIP. The buyer, in turn, had the information at the beginning of the process regarding the state of the property so they knew exactly what they were buying, and there were no nasty surprises further down the line. By doing this, the number of property transactions which failed to complete would drop and the process of buying a property would be much more streamlined.
But as providers were in the process of designing their propositions and how they would bring this product to market, the goalposts were moved and speculation descended over whether the purpose behind the packs would be achieved. Opponents of HIPs, both in the political sphere and from within the industry, questioned whether they would be trusted by buyers and whether sellers would want to start the selling process by having to fork out potentially hundreds of pounds. The government ultimately got cold feet and the implementation of HIPs collapsed into farce.
“The government has got it wrong ever since 18 July 2006, when it scrapped the mandatory HCR and it has been struggling ever since,” Ockenden believes. “There has also been the political posturing from the Conservatives, which I see there being little reasoning behind – except for opposing them for opposition’s sake. There has also been the negative coverage from the conservative media, which has helped to poison many people’s views.”
Home inspectors
But despite the government’s hesitancy over the packs, the HIP industry pushed on. Providers had invested millions in developing viable propositions and they were determined to see a return on this. However, with the scrapping of a mandatory HCR, many home inspectors began questioning whether the time and money they had invested in training for a career at the front line of HIP provision, was actually worth it.
“Have they been upset – certainly, and who can blame them?” Ockenden admits. “But we have not seen many inspectors drop out and leave altogether. Inspectors have made a career choice by training and the opportunities which were there have not gone away. They’ve made their choice and stuck with it.”
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However, whether it was not enough people coming forward or a case of them not being trained quickly enough, it was a lack of inspectors which put the final nail in the coffin of a June launch. Speaking to the House of Commons on 22 May, Communities Secretary, Ruth Kelly, insisted that HIPs would still be going ahead but the lack of trained inspectors would mean they would be introduced on a phased basis from 1 August.
Looking to the future
Looking back, Ockenden is adamant that providers were ready for 1 June. “I think the providers have been ready for a long time now. We’ve had the issues over the number of assessors but we could have gone ahead on a phased basis from 1 June for four-bedroom properties.”
So what now? “I think it will be three-bedroom properties then the rest. Three-bed properties make up the majority of the housing stock so once we have this in place, the rest will follow. The government has given an indication that it is now happy with the number of inspectors and I think we will have enough for three-bed properties by the end of July. I think three-bed properties will be covered from 1 September, or 1 October, with the rest following by the end of the year, either on 1 November or 1 December.”
Removing the doubts
But even though we are now approaching 1 August, have all the doubts surrounding the packs been removed? While Ockenden admits even he is unsure whether the public will take up a voluntary HCR, he believes if everyone looks back at the fundamentals behind HIPs, they still have a vital role to play in creating a better marketplace.
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“Much of the argument has to be shifted so we get back to the basic reason for having HIPs in the first place. The Energy Performance Certificate was a great spin-off for the government but we have to remember the main reason was to improve the house buying process.
“The packs as they are have all the legal documents in them and we have got good evidence from the trials that it reduces the number of fallouts and that people have confidence in using them once they know about them. The packs will still do a job. The HCR has not gone away completely and we are working with the government to try and make it mandatory again.”
A new role
So with 1 August rapidly approaching, AHIPP must now begin a new role. Having worked so hard to get this far, it must now move from being not just an instigator but a surveyor as well. For Ockenden, 1 August is ‘a starting point, not a destination’.
“One of the things that is slightly bizarre is that the trade body was there before the industry. The Council of Mortgage Lenders was set up to represent the lenders, while other trade associations have sprung up to fight for the needs of their sector. But we are fairly unique as we have been here before HIPs have gone live.
“I’d like to think we have made an impact in getting HIPs to market. We are representing a brand new industry which will need proper representation as it gets up and running. There will be a lot of work to do for this new and vibrant sector and I think we can be much more responsive than other parts of the industry in changing to meet the needs of customers.
“Ultimately, we need to make sure that HIPs deliver the benefits to the consumer that they have been promised.”
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