The Association of Relocation Professionals

HIPs Become a Reality

After years of speculation, and months of governmental and legal wrangling, HIPs become official on Wednesday August 1st, two months later than planned and in a somewhat watered down form. 
 
This is not a complete launch of the system.  HIPs will only apply to four bedroom houses or more at this stage, and there are no definite dates as to when the system will be extended to the entire property spectrum.  One of the final obstacles to the implementation of the packs has been the inclusion of the requirement for an energy performance certificate (EPC’s).  It is said that one reason for delaying their implementation is that there are just not enough EPC inspectors, and this is also why the scheme is limited at launch to 4 bed houses, supposedly the most energy inefficient.  The National Association of Estate Agents has called on the government to proceed with the energy performance certificates, but to scrap the remainder of the pack. 
 
There are some very large loopholes in the system as it stands.  Firstly, until the end of 2007, vendors of 4 bed plus houses will be able to market their property without a pack, so long as they have commissioned one.  Secondly, there is no legal limit on the age of an EPC – this means that potentially, it could be years out of date when the HIPs pack is drawn up.  Thirdly, what actually constitutes a 4 bed property?
 
Jonathan Haward, Managing Director of County Homesearch International PLC remains sceptical about the government's unwelcome interference in property purchase transactions;

"HIPs are being introduced for properties in excess of four bedrooms.  Are we going to see increasing numbers of three bedroom houses with studies or upstairs dining rooms?  In addition, there is the likelihood that a grey market will emerge in which properties that were not on the public market find themselves changing hands privately therefore bypassing the HIP requirement.  In some ways, we may see that the HIP initiative increases the need for buyer representation as the HIP report may well stop people from going forward with a potential purchase on the basis of minor faults which would be better elaborated upon in a home buyers report."

One further serious issue that seems to have been sidelined is the number of qualified inspectors.  The Royal Institute of Chartered Surveyors (RICS) are very concerned that of the 7400 home inspectors necessary to implement the new regime, only a handful have so far completed the Diploma necessary to hold a Home Inspectors Licence. 

But on top of this, one further serious loophole still exists.  The RICS have identified the fact that sellers need only prove they have ordered a HIP at the point of sale, not to actually have the report in their hands.  Therefore it seems that selling a house without a HIP would not be illegal during this interim period of their introduction.

The pack will be costly – estimated at around £400-£600.  So with this new legislation creating a potential new income stream for property professionals, will the Private Acquisitions Specialists be offering these services to their purchasing clients who are looking to dispose of their existing property?
 
James Greenwood, Managing Director of Stacks Relocation feels strongly that this is not an appropriate area for Private Acquisition Specialists;