Hips To Be Scrapped Today Telegraph

[moonriver]

http://www.telegraph.co.uk/property/propertynews/7743264/HIPs-to-be-scrapped.html

HIPS to be scrapped

Home information packs will finally be scrapped today.

The Tories claimed today that the previous Government had planned to use HIPs to help justify a rise in council tax by establishing a central database of information about properties.

"The Labour Government wanted Hips to become a home information tax. Home owners would pay to have their homes inspected and information would then be used to increase their council tax bills by stealth," said Communities Secretary Eric Pickles.

"The new Government won't let this happen and will deliver on manifesto pledges to scrap unwanted Hips and intrusive council tax revaluation."

A clause in the 2004 Housing Act allows Mr Pickles to suspend home information pack duties.

An announcement confirming the move is expected to be made by the new Government today.

Anti-Hip campaigner and estate agent Trevor Kent said: ''The long term problem has been that it has taken 25-30% of intending sellers away from the market because they are not prepared to pay money upfront not knowing whether their house is going to sell or not.

''This has given us a dramatic shortage of stock.''

But estate agents claimed the packs, which typically cost between £299 and £350, were actually stunting the housing market recovery, as they deterred people from putting their home on the market just to test the water.

Early this morning on BBC radio wales, they were discussing the abolution of HIPS, and I heard an invited expert on the radio say that the result of this will be more properties added to a stock that is already increasing, meaning property prices will be likely to fall.

I know that it will also probably lead to a lot of sellers going to market, just to test the market to see if they can get a ridiculous high price for their places, but hopefully it could also lead to estate agents not overvaluing properties, just to have them sitting around on their books unsold.

[Pent Up]

Early this morning on BBC radio wales, they were discussing the abolution of HIPS, and I heard an invited expert on the radio say that the result of this will be more properties added to a stock that is already increasing, meaning property prices will be likely to fall.

I know that it will also probably lead to a lot of sellers going to market, just to test the market to see if they can get a ridiculous high price for their places, but hopefully it could also lead to estate agents not overvaluing properties, just to have them sitting around on their books unsold.

Very interesting. More evidence that camerlegg might not be so keen on keeping the bubble inflated.

[Mal Volio]

Anti-Hip campaigner and estate agent Trevor Kent said: ''The long term problem has been that it has taken 25-30% of intending sellers away from the market because they are not prepared to pay money upfront not knowing whether their house is going to sell or not.

''This has given us a dramatic shortage of stock.''

But estate agents claimed the packs, which typically cost between £299 and £350, were actually stunting the housing market recovery, as they deterred people from putting their home on the market just to test the water.

says it all really

getting rid of HIPs is what the EAs want, and it's going to lead to the emergence of a load of non-sellers with fantasy expectations of price. Hurrah.

It's a victory for the EAs' lobbying of the Tory party.

[Confounded]

Early this morning on BBC radio wales, they were discussing the abolution of HIPS, and I heard an invited expert on the radio say that the result of this will be more properties added to a stock that is already increasing, meaning property prices will be likely to fall.

I know that it will also probably lead to a lot of sellers going to market, just to test the market to see if they can get a ridiculous high price for their places, but hopefully it could also lead to estate agents not overvaluing properties, just to have them sitting around on their books unsold.

Given Labour introduced HIPS to reduce supply (knowing we were heading for a crash) it stands to reason the removal of it will increase supply. Crazy as it is people are very tight when it come to spending pounds but when it come to spending hundreds of thousands of pounds they have no fear.

"Penny wise, pound foolish"

[Mildura]

says it all really

getting rid of HIPs is what the EAs want, and it's going to lead to the emergence of a load of non-sellers with fantasy expectations of price. Hurrah.

It's a victory for the EAs' lobbying of the Tory party.

Does it? I would have thought that the removal of something that prevents some sellers bringing their homes to the market would be exactly what HPC'ers would be in favour of.

The number of buyers will not change, but the number of homes for sale is likely to increase. When supply increases and demand doesn't I wonder what might happen?

[Ologhai Jones]

Doesn't the removal of HIPs also simultaneously make things less expensive for sellers and more expensive for buyers, in that buyers now have to put more money into having houses surveyed?

[Toto deVeer]

Very interesting. More evidence that camerlegg might not be so keen on keeping the bubble inflated.

Not so sure that was the motivation. More likely to be that they just want to eliminate the cost and associated bureaucracy.

What they really need to do instead is to bring the system in line with Scotland, when a price is agreed verbally, that's a contract. No more gazumping.

At the moment the system in England and Wales allows EA's to operate fraudulently with impunity.

[Mildura]

Doesn't the removal of HIPs also simultaneously make things less expensive for sellers and more expensive for buyers, in that buyers now have to put more money into having houses surveyed?

There has never been a survey included in the HIP. It has always been down to the buyer to arrange their own survey.

The only material change is that buyers will have to cover the cost of searches once again. Depending where you are this should be around £200.

[Toto deVeer]

Does it? I would have thought that the removal of something that prevents some sellers bringing their homes to the market would be exactly what HPC'ers would be in favour of.

The number of buyers will not change, but the number of homes for sale is likely to increase. When supply increases and demand doesn't I wonder what might happen?

I also would suspect that the EA's were looking to make a lot of money from the HIPS system; being the front line for preparing them...

[shindigger]

Doesn't the removal of HIPs also simultaneously make things less expensive for sellers and more expensive for buyers, in that buyers now have to put more money into having houses surveyed?

Nah,that was cobblers.

Mortgage firms still wanted their own survey, guess who paid for that?

HIPs was pure new Labour ******** form start to finish.

I wonder if all those types that paid for their own training to to be a HIPer (basically meter readers) will be after some compo from Mc******?

Theyll also want compo for the square rimmed "intelligent specs" they bought speshully for the job innit?

Poor old Britain, so ready to believe Brown when he told us we were all special.

Suckers.

Edited May 20, 2010 by shindigger

[Mildura]

Not so sure that was the motivation. More likely to be that they just want to eliminate the cost and associated bureaucracy.

What they really need to do instead is to bring the system in line with Scotland, when a price is agreed verbally, that's a contract. No more gazumping.

At the moment the system in England and Wales allows EA's to operate fraudulently with impunity.

Could you explain what you mean by this?

[Ologhai Jones]

The only material change is that buyers will have to cover the cost of searches once again. Depending where you are this should be around £200.

Ah, interesting. Thanks.

It may be marginal, but the transfer of £200's worth of costs in this way would presumably encourage sellers and discourage buyers.

[Toto deVeer]

Could you explain what you mean by this?

Yes I thought that was a little bit harsh when I re-read it. My apologies.

I should have said 'unscrupulous EA's'.

I consider it fraudulent because the buyer, who thinks the deal is sealed, can be duped (defrauded) by an unscrupulous EA who tries to scare them into a higher price by 'there is a higher bid out there' approach, or by simply continuing to invite bids on a property. This is particularly a danger during boom periods, and in a properly regulated market, would certainly be considered fraudulent.

In fact I think you would agree that the banking, finance and EA industry has time and time again been implicated in fraudulent activity over the last ten years or so. A number of documentaries have pointed this out.

So you may argue that the EA's responsibility is to the seller, but as the system does not provide a counterparty to look after the interests of the buyer, this asymmetric seller bias should be considered illegal, as it does not constitute a fair contractual environment for both parties.

In the US, for example, any transaction that uses an agency system has an agent that represents the interests of a buyer, and an agent who represents the interests of the seller, and the commission is shared 50/50 by both parties. I am not suggesting that this is the best arrangement for the UK. It could be instead handled by proper legislation regarding property transactions.

Do you not agree?

[deflation]

Nah,that was cobblers.

Mortgage firms still wanted their own survey, guess who paid for that?

HIPs was pure new Labour ******** form start to finish.

I wonder if all those types that paid for their own training to to be a HIPer (basically meter readers) will be after some compo from Mc******?

Theyll also want compo for the square rimmed "intelligent specs" they bought speshully for the job innit?

The EPC has to stay, so the 'meter readers' will still be needed. I'm amazed people don't check the EPC. It indicates whether or not your heating bills will be a fortune (especially if it's a big house) or if you'll need to budget for insulation, double glazing, etc.

The rest of the HIP is the searches and photocopying the land registry entry. I agree that the main problem was always that many buyers' solicitors would insist on their own searches anyway. And removing the survey made the whole thing toothless.

Edited May 20, 2010 by deflation

[Rozza]

But estate agents claimed the packs, which typically cost between £299 and £350, were actually stunting the housing market recovery, as they deterred people from putting their home on the market just to test the water.

That bit really annoys me, you either want to sell or you dont, if people put their property on the market and a buyer spends money on a survey they should not be able to then just pull out with what is effectively "only joking". On the same side buyers shouldnt waste sellers time either.

If you want to know what your property is worth, just wet your finger and stick it in the air, its what the EA's do.

[Mal Volio]

Does it? I would have thought that the removal of something that prevents some sellers bringing their homes to the market would be exactly what HPC'ers would be in favour of.

But the only people it stops are those who are not motivated. £300 isn't a real barrier if you want/need to move. It is a barrier to people who just want someone to give them 2007+20% "because they're worth it"

The number of buyers will not change, but the number of homes for sale is likely to increase. When supply increases and demand doesn't I wonder what might happen?

But it's not real supply, it's fantasy supply. The asking prices of anyone to whom HIPs were a barrier are likely to be more imbued with the spirit of delusion than someone who wants/needs to sell. So lots more house on the market, but with a hike in asking price. Not good.

And the other (and probably most important) aspect is that a HIP (usually) contains info on last-sold price; this is why EAs hate them - even the most unaware buyer gets to see what the vendor paid and when and can see what it might be worth now. Remove HIPs and the buyer has to go to the LR - and surprisingly few buyers are aware that the info is available from the LR.

[Mildura]

Yes I thought that was a little bit harsh when I re-read it. My apologies.

I should have said 'unscrupulous EA's'.

I consider it fraudulent because the buyer, who thinks the deal is sealed, can be duped (defrauded) by an unscrupulous EA who tries to scare them into a higher price by 'there is a higher bid out there' approach, or by simply continuing to invite bids on a property. This is particularly a danger during boom periods, and in a properly regulated market, would certainly be considered fraudulent.

In fact I think you would agree that the banking, finance and EA industry has time and time again been implicated in fraudulent activity over the last ten years or so. A number of documentaries have pointed this out.

So you may argue that the EA's responsibility is to the seller, but as the system does not provide a counterparty to look after the interests of the buyer, this asymmetric seller bias should be considered illegal, as it does not constitute a fair contractual environment for both parties.

In the US, for example, any transaction that uses an agency system has an agent that represents the interests of a buyer, and an agent who represents the interests of the seller, and the commission is shared 50/50 by both parties. I am not suggesting that this is the best arrangement for the UK. It could be instead handled by proper legislation regarding property transactions.

Do you not agree?

Thank you for your reply.

In short, yes I completely agree. There really needs to be a better framework in law to protect all parties, and HIPs, despite this originally being one of their aims, failed totally.

The system we employ in this country manages to fail practically everyone involved.

[Toto deVeer]

Thank you for your reply.

In short, yes I completely agree. There really needs to be a better framework in law to protect all parties, and HIPs, despite this originally being one of their aims, failed totally.

The system we employ in this country manages to fail practically everyone involved.

I personally would like to see fair regulations introduced, and the EA industry elevated to the professional status that it rightfully should occupy, being involved the negotiation of perhaps the most important financial transaction of most of our lives. At the moment it is too open to unscrupulous operators.

Cameron, Clegg, are you reading?

[trappedsharedowner]

I had to pay out for a HIPS 4 weeks ago. According to the Solicitors bill: £200 for the EPC, and £50 for the searches etc. Won't bring the bill down much will it? And you will still have a little man poking around your energy saving lightbulbs (or in my case, no esl's!!).

My EPC was appalling because we have no gas where I live, and my system is a space heating cast iron stove with back boiler to run the hot water and radiators. They suggested I change to an oil condensing boiler (min £1200), find room in the kitchen for same, and change the whole system. Currently it costs me £720 pa max for all hot water and heating. But it's not 'environmentally friendly' you see!!!

[betterToDo]

I consider it fraudulent because the buyer, who thinks the deal is sealed, can be duped (defrauded) by an unscrupulous EA who tries to scare them into a higher price by 'there is a higher bid out there' approach, or by simply continuing to invite bids on a property. This is particularly a danger during boom periods, and in a properly regulated market, would certainly be considered fraudulent.

Is it not only a danger during a boom? Without rapid consumption of everything appearing on the market, that psychology of fear amongst buyers will die its own death, no need for any kind of intervention. Buyers have been susceptible to that simply because they were so often getting outbid. Without the belief that you have to get onto the property ladder or will fall into a black hole of poverty and misery, this negotiation tactic carries far less weight.

[deflation]

+1, the cost of HIPS is not a barrier if you want to sell. It also did have some useful information (last-sold price etc) and was a good checklist of what was included in the sale.

I expect to see 'asking prices' rocket or soar over the next few weeks as there is no barrier to entry, so why not test the market. If the EA values at say 250k and would put it on at 275k why not try 300k or 295k.

You could do that already. Do people think £150 (average HIP costing on the 'net) was a show stopper, when trying to get 100s of thousands of pound for a house?

A lot of EAs round here now have a 'withdrawal fee' if it doesn't sell, some at £100, some at £250 + VAT. This is worse than a HIP up front. EPCs cost about £80 anyway, and they're staying.

[moonriver]

Just caught the end of Politics show discussing HIPS.

There was some guy on who was complaining about it being scrapped without consultation, and he said he felt they had grounds to take the governent to court and get an injunction.

Eric Pickles said they decided to scrap with no consultation because of current fragile market condtions. There had been lots of speculation about if they were going to scrap hips, which would of hindered people marketing their properties. He said that HIPS were next to useless anyway.

He said energy performance certificates were still staying, but will last 10 years, instead of 3 years.

You will all be pleased to know that I just heard on Working lunch that Eric Pickles made this announcement, along with Kirsty Allsop.

[moonriver]

What fragile market conditions? prices have risen by 10 % over the last year. What other investment has risen by 10% over the last year and we have had a recession (gold may be?). If only a 10% rise is classed as fragile what is a soild market 20% per year rises?

He definitely used the term "fragile", so maybe they know something we don't know yet? Or maybe those recently released hpi statistics are not showing us the true picture, as to the current state of the market?

[bobthe~]

What fragile market conditions? prices have risen by 10 % over the last year. What other investment has risen by 10% over the last year and we have had a recession (gold may be?). If only a 10% rise is classed as fragile what is a soild market 20% per year rises?

the stock market?

[Mr Yogi]

He definitely used the term "fragile", so maybe they know something we don't know yet? Or maybe those recently released hpi statistics are not showing us the true picture, as to the current state of the market?

The abolition of HIPS is a very shrewd move by Cleggeron.

They know full well that house prices are about to start falling - after all they've got uber-bear Vince Cable in the cabinet spelling it all out.

They need a scapegoat to divert the flak from themselves when the crash starts. The removal of HIPS - a popular move with nearly everyone - will cop the blame as it massively increased supply.

Lord Mandelson would be proud of them...

Edited May 20, 2010 by Mr Yogi