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Angry critics call for ill-starred Hips to be scrapped altogether

Angry critics call for ill-starred Hips to be scrapped altogether



The government faces increasing pressure to scrap home information packs altogether, following last week's announcement that their introduction is to be delayed by two months.

Last week Ruth Kelly, Secretary of State at the Department of Communities and Local Government - the department responsible for the ill-fated 'Hip' - was forced to postpone their implementation following legal action by the Royal Institution of Chartered Surveyors. At the same time, she admitted that not enough people had been trained and accredited to perform one part of the Hip - the energy performance certificate (EPC) survey - in time for its now-cancelled launch date of Friday (see box, right).

The DCLG now plans a 'phased' launch of the Hip, starting with homes that have four bedrooms or more, on 1 August. The rules have also been relaxed to allow homeowners who have ordered a Hip but do not yet have it in their possession to start marketing their property.

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This is the second time the government has performed a major U-turn on Hips. The scheme was originally intended to include a survey - the 'home condition report' - that would provide buyers with much of the information they needed upfront to make a decision about buying the property.

This would have helped to reduce the time between offer and exchange of contracts and therefore cut the numbers of deals falling through. But the government axed plans for a compulsory home condition report last July after the Council of Mortgage Lenders said many of its members would refuse to accept them for mortgage purposes.

The latest move has dismayed thousands of people who are in the process of training as domestic energy assessors to carry out EPCs and are now facing the prospect of having very little work for the foreseeable future. Neither has it satisfied critics of the scheme, who claim the government's plans are rushed and ill-conceived. The Royal Institution of Chartered Surveyors, the Law Society, the National Association of Estate Agents and Which?, the consumer group, would all like to see the introduction of Hips postponed for a lot longer - or, preferably, cancelled altogether.

All of them say they want the government to go back to the drawing board and consider other ways to reduce the incidence of gazumping and failed house sales. Jenny Driscoll, a campaigner at Which?, says: 'The government has given home movers a two-month reprieve. However, it's clear this isn't a genuine desire to improve the Hip but rather an attempt to take the heat off the government. We withdrew support for Hips last year when government caved in to industry pressure and cobbled together a half-baked version. A two-month stay of execution will not deliver the magic formula to transform this half Hip into the "full Monty".

'The original intention was to radically improve home buying and selling in the UK and stop one in four sales falling through. This can only be done with a lengthy delay - certainly not a couple of months.'

Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA), says: 'It's pathetic. I just don't understand where the government is coming from. If the Hip were an animal, you would have put it out of its misery by now.' The NAEA would like to see EPCs launched separately for all homes that go on sale (not just those with four or more bedrooms), and the rest of the Hip scrapped completely.

Paul Marsh, deputy vice president of the Law Society, says: 'How could Yvette Cooper [the housing minister esponsible for Hips] make such a mess of it? A delay until August is not enough. We need to get back to basics to sort this out.'

But while all seem to agree that a new scheme to reduce gazumping and failed deals is necessary, none agrees as to the best method. James Scott-Lee, chairman of RICS's residential sales and lettings group, favours the introduction of a scheme that compensates for the loss of fees if either the buyer or seller pulls out of a deal.

But the Law Society is already pushing the idea of its non-legally binding 'protocol' system, under which buyers and sellers agree that, for a four-week period, they will be completely open and forthcoming with each other should they encounter any problems, and provide any necessary information as quickly as possible.

The RICS will be holding a key stakeholder meeting, to which the DCLG has been invited, next week to discuss the issue. The DCLG was unable to confirm that it would be attending but a spokesman said: 'Ruth Kelly set out a practical implementation programme for HIPs and DPCs which will commence on August 1, starting with four-bedroom houses. Of course we're always happy to talk with key stakeholders to discuss implementation.'

Wasted opportunity

Fifty-seven year-old Owen Yelland from Bristol is one of the thousands of people who signed up to become a home inspector last year. Mr Yelland earns a basic salary from his employer, Allied Surveyors, but is relying on the commission from carrying out home energy efficiency assessments to earn a decent living.

Now that home information packs have been delayed - and, from August, are set to apply only to properties with four bedrooms or more, he stands to lose a lot. 'I'm faced with less work as I've heard that, with no legal definition of a four-bedroom house, estate agents may try to encourage vendors to sidestep Hips by marketing them as three bedrooms and a study,' he says. 'I started training last September, so I've invested a lot of time and money in this.'

According to last week's figures from the government, 2,500 people are currently training to be a 'domestic energy assessor' (DEA) - inspectors who are qualified to issue energy performance certificates but cannot carry out full property surveys. A further 3,200 have passed their exams and 1,500 have been partly accredited or have applied for accreditation. Yet only 520 have been fully accredited to date - a quarter of those needed to meet expected demand.

The companies training and accrediting energy assessors put the problem down to a lack of time - the government only approved the DEA qualification in January. The course itself takes four to six weeks, but trainees have to do 200 hours of study, five home energy assessments and an exam. They also have to undergo a basic criminal record check, which is causing some of the delays, and then must wait to be accredited by one of five authorising bodies.

Lisa Bachelor

Gazumping? Not overseas

How do other countries avoid the problem of gazumping (when vendors renege on their agreement to sell you a property at a certain price)?

As John Howell, senior partner at The International Law Partnership, explains below, other countries 'have chosen to give certainty to sale at the expense of creating potential problems for sellers'.

France

A contract is signed early on (typically within a few days of viewing a property). The contract commits the buyer and seller to going ahead but contains 'get-out' clauses, or conditions relating to the obtaining of finance or receipt of surveys. The conditions all benefit the buyer, not the seller. If sellers wish to exit the contract, they must go to court. Buyers can apply to have a sale forced through or seek compensation.

Turkey

A contract is also signed at an early stage (after viewing the property). Additionally, a buyer can pay to register a contract, which then gives the buyer the right to force the seller to go ahead with the deal.

US

Contracts are signed subject to contingencies (such as finance). The period during which a contract can be cancelled is shorter than in the UK, giving the parties a limited period of exposure to cancellation.

Spain

A contract is likely to be signed within four to six weeks of viewing the property, giving the buyer time to carry out investigations. At this point the contract is binding, giving the buyer the right to force a sale. A very similar system operates in Portugal.

Australia

Sellers' packs similar to Hips are mandatory in New South Wales.

Source: The International Law Partnership

Guardian Unlimited © Guardian News and Media Limited 2007

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