Today, a new era for estate agents and the house-moving public begins. Marketing a property is now illegal until most of a HIP – complete with an answered Property Information Questionnaire – has been compiled.
For opponents, including many agents, this was the day they thought they would never see. For the HIP industry, it marks the end of a long, wearisome and, for some, ruinously expensive journey through a landscape pitted with political U-turns.
This time, there wasn’t one, even though calls continued until the very last minute for the new regime to be abandoned or at least postponed. There also remains huge confusion as to how local authorities will charge personal search firms for access to information, and whether HIP prices will rise, by how much, and what the variations will be.
The National Association of Estate Agents repeated its call as late as last Friday for HIPs to be scrapped during the recession, and for the Government to re-examine their viability once the economy begins to grow again.
The NAEA said that 89% of its members do not see today’s changes to the regime as beneficial, and 65% believe they will discourage people from selling.
Charles Wasdell, head of research at propertyfinder, said the loss of first day marketing could disrupt the market at a sensitive time: “The Government risks shattering the fragile signs of recovery emerging in the housing market by making sellers provide a HIP before they market their property.
“Sellers are already cautious in the current market and this will prevent people from testing the waters, and risks a drought of good saleable properties.
“The Government should be trying to stimulate housing transactions, not tie the process up in more red tape. Estate agents across the country can see HIPs are simply not delivering and want them abolished. Sellers don’t know what they are and buyers ignore them.”
Andrew Lloyd, managing director of personal search provider MDA SearchFlow, warned that local authorities must play their part now that personal search firms must provide full searches.
Just before the new regime kicked in, he said: “Even though the legislation is just a matter of hours away, the picture on charging is still very unclear.
“Many search companies are nervous of both the increase in charges for the extra data and the amount of additional working capital they may have to put up to pay for these charges upfront, especially as margins have already been squeezed and some are operating thinly over wide territories.”
He said: “I look forward to seeing a robust and comprehensive follow-up by trading standards and the Property Codes Compliance Board to ensure that everyone across the industry is ‘walking the walk’ as well.”
Much of the latest controversy has centred around the Property Information Questionnaire, which must be completed by the vendor and included in a HIP.
But Mike Ockenden, director general, of AHIPP, said: “Providing simple, easy to understand, upfront information regarding a property will enable buyers to make a more informed decision, making them less likely to pull out later in the process. The PIQ will also raise consumer awareness and appetite for the HIP, as vendors completing the questionnaire are likely to request to see similarly completed forms for any properties they go on to view.
“The information required in the PIQ is already obtained from the seller in the present system, but much later in the sale process. There is nothing new, just different timing that makes total sense.”
Ashley King, managing director of Simply HIP and chairman of AHIPP, said agents should not encounter problems as long as their HIP provider has a PIQ completion service.
His own firm – which has just become a preferred supplier to the NAEA – also offers a money back guarantee if the estate agent does not receive confirmation that the property can be marketed within 24 hours of the Energy Performance Certificate being filed and receipt of a completed PIQ.
Nick Small, of HIP provider Pali, warned that too much focus had been placed on the PIQ and that it was the Index which could cause concern.
He said: “The property cannot be marketed without an up-to-date Index. If there is an EPC, Sale statement, Land Registry office copy of title and plan, and a completed PIQ together with an Index showing these items, then the property can be marketed.
“When the drains report comes in the Index must be changed to show its inclusion. Likewise when the local search comes back, it must be changed again. If the property is not freehold and registered, more documents are required, epitome of title or maybe a lease. These can take quite a while but the Index must be in the HIP regardless of whether they are included, and when they arrive the Index must be changed once more.
“Whoever in Government thinks these things through needs to get a proper job.”
He warned agents to make sure they are using HIP products where the Index automatically updates whenever a new document is uploaded.
Meanwhile, environmental information provider firm Landmark criticised the PIQ, saying that information provided by the vendor about flooding might be inaccurate, subjective, or economical with the truth.
James Sherwood-Rogers, managing director of Landmark Legal and Financial, said: “In reality, a seller may not know if a property has been flooded or in extreme cases they may not want to admit such an event.
“The PIQ does not specify what type of flooding a property has experienced, nor does it provide a definition for flood risk. For example, there is no differentiation in the report between a property that may have been flooded due to a faulty washing machine or because it is in a potential flood risk area.”
Day of change for the property industry
06 April 2009
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Comments
The NAEA and alike are to blame. Wimps who couldn't argue a clear case of government nonsense. Has it speed up the process , NO. has it stopped fall through (we run at 5% and nothing to do with HIP's, which didn't stop people from dropping out as and when they pleased). Yes corporates are given too much voice, but then who it is that causes more trouble as an estate agent with thier hard sell and un-professional behaviour, just the thing the government argues is consumer protection? What the industry needs are leaders. The public today want day one marketing, so here again HIP's fail miserably and we have had to turn business away because they are againgst HIPs. Come on NAEA stand up to the plate and fight or resign and let someone else do a proper job.
The reason why this day has arrived is that the government understood that estate agents are in general considered the devil incarnate and therefore there would be little sympathy. The public were falsely led to believe that HIPs would protect them in the transaction and curb the duplicitous behaviour and excesses of estate agents thus nullifying public opposition. The government also understood that the industry is not a unified one and would offer only weak resistance rather than focussed opposition. What else would you expect from an industry where the players are too often willing to shaft each after for a quick buck and meet a target (corporate chains ruined the industry and destroyed public confidence). The industry leadership may have been vociferous but in reality has been largely ineffective. How the hell can the NAEA have preferred suppliers when it is calling for them to be scrapped? In effect a declaration of acceptance - what sort of idiocy is that? Calling for HIPs to be scrapped during the recession is a pathetic call of no concern to the government given that they are broadly cost neutral and in reality have not and will not deter people from selling. The industry needed to mobilise public anger at the hijacking of HIPs for the EPC and the basis of green property tax; they needed to be told that HIPs did not address any of the problems claimed; they needed to be told that the improvement in search times was a cynical enabler of HIPs that could have and should have been improved long, long ago. Above all else they need to be told that their right to freedom of expression has been revoked and that they can no longer innocently announce that they are “selling their house and would anyone like to buy it” unless they have a HIP complete with all the mandatory elements for first day marketing. Do the public understand that they are now exposed to Trading Standards, where previously there was no jurisdiction? And before HIP suppliers say otherwise INDIVIDUALS CAN BE IN BREACH OF THE LEGISLATION AND THEREFORE CAN BE GIVEN A PENALTY FINE! The NAEA should have been constructing campaigns to facilitate a public response not an industry one that would only ever have been considered as self interested and protectionism. Instead, parrot like, it squawks the same tired and dismissed arguments that have no chance of being listened to. It’s not too late to campaign. Agents could provide property owners in their areas with a letter to send to their local trading standards office asking for an explanation of the precise circumstances under which they be in breach of the legislation and subject to a penalty fine. A second letter to their local MP asking for confirmation that their right to freedom of expression has been revoked and whether the MP voted for or against the legislation would start to undermine government support! It’s a shameful day for the industry to be outsmarted by a government that is certainly vicious and incompetent but most definitely not intelligent.
Happy PIQ Day........yet another useless pointless addition to property markrting.
Sorry Jim but the home buying and selling process was archaic. What is wrong with identity cards, unless.......?! No sorry, lets not get into that also! Have a good evening
No Bertie, I disagree. (Pre)Conveyancing was the excuse to provide the vehicle for the future ECO tax. A tax that the Tories seem equally commited to. Systems always benefit from ongoing improvement. Some natually evolve over time, such as The Law which is under constant scrutiny. This endless debate over the value of HIPs shows that the cloud around the tax calculation mechanism is successfull shrouded. If you want to hide a tree, plant it in a forest. We did not NEED an improvement in the system, the ECO tax needed it. This is a system of introduction mirrored by National Identity cards which are presently rolling out throughout the UK. making this Law reveals the Governments fear that implementaion would simply not have happened otherwise. If I really need something, why would you make it an offence for me not to take it?
Jim, we got to this stage because we, lawyers, estate agents and others were doing nothing to improve the system. In this case it is our fault it has taken a sledgehammer to crack a nut!
Brilliant answer Jim.
Freddie, I didn't put HIPs in the same league as murder, the Governmant did. Perhaps we can supply you with some more feathers in the meantime. Need to mke that nest as comfortable as you can.
...and to dis ingenuous -
did you ask your mummy before you came on the internet...?
To Mark -
You add a markup to the cost of the HIP when flogging them to vendors...then you discount your fee by 1.4times the darn thing as a sweetener? Do the maths, mate - recipe for disaster in my opinion. Assuming you add 25% to the HIP (as most do), you are losing hundreds on each deal, therefore adding to your cashflow problems, not easing them!
Why not look at it another way - give yourself what could be an USP in your area - offer to refund the HIP cost on completion, and retire earlier. MUCH earlier!
I think even the anti-HIP people would be embarrassed by some of the responses. Saving trees? Anyone who actually prints out a HIP unless it's absolutely necessary needs their head seeing to. In fact maybe it'll drag into the 21st century some people who seem to always need to print everything out. Murder, theft, rape the same as not doing a HIP? Get some perspective yourself, you idiot. Is a HIP required on a private sale? I hope that one isn't from an estate agent! But if it is, it just shows the level of utter ignorance some people still have.
Don't rely on the Conservatives - they will not get rid of HIPs no matter what they say. By the time they come to power HIPs will have been about for over a year in their current form and people will have learnt to live with them, and anyway, the economic meltdown might be a higher priority!
Well said Jim. We live in a New Liebour Kafkaesque bureaucracy. Just like that scene in the film Brazil where Jonathan Pryce gets strangled by paperwork. This current government have no idea about business, trade, commerce or real life. They are academics, analysts or career politicians who don't have a clue. Are the Conservatives any better? We will see from May 2010.
How are private sales effected? Is a HIP required T
HIPs are not all bad. They have helped to bring compeltion times down on houses I sell and that means less time for the buyers to change their minds and pull out. Also, I add a margin to them which gives me an upfront income to underpin my business in a difficult market. To compensate sellers for this, if they do the HIP through me, I give them a sizeable reduction in selling fee which absords the full cost of the HIP and about 40% more in most cases. The people who sell through me seem happy with the arrangement and, even though they'd prefer NO HIP at all, we had all gotten used to the idea and it was working. So why do the government now have to make another change? It costs the clients more, it costs the agents more, and there is no logical reason for it other than the governments love of red tape, and making life harder for everyone who has to work for a living and can't claim £140k a year in expenses!
Take a step back. How did we ever allow ourselves to get to a point where "marketing a property is now illegal..." Murder is illegal, theft is illegal, rape is illegal. Putting up a for sale sign outside your house because you want to move, illegal? What a sad, sad world we have created with no perspective or grasp of reality.
I still cannot see anyone (seller or buyer) being interested in more paperwork; much less paying for it. I thought the idea was to save trees and, therefore, the environment. Bureaucratic claptrap. What a shambles!
I'm an Estate Agent - Get me out of here!
Ah the day has dawned that as a home owner and/or as an estate agent I can't offer a house for sale until, effectively, a DEA manages to get round to the house and produce an EPC.
I don't think I'll be letting my business fall into the hands of some species who didn't exist 2 years ago.
I fink it's really brilliant.
Wot U don't understand is how cleaver Hip's really R.
Yup!
1 nil to the Governament. Nuffink to the estate agents.
Now we will see loads of houses sell really quickly cos we don't have to wait for all that conveyancing malarki to be done before we move in.
And it's cheaper to buy and as well.
See!
"For opponents, including many agents, this was the day they thought they would never see..."
Oh yes we did. Because this Government has time and again demonstrated its ignorance of the practicalities of the home buying process and willingness to impose half-baked measures.
The fight goes on.