Interview With The Angry HIP Consultant

There is a huge difference between making cars and producing HIPs.

One is wanted, and the other was artificially created. If the demand from people for HIPs was there, he would still be in business.

We could alway get one group to dig holes, and the other group to fill them in. Create a law mandating the digging and filling of holes.

Some would claim that its productive.

Nick

Hi Nick

You'd be right if that were true, HIPs were the result of over ten years of investigation having been in the Labour manifesto of 1997 giving them a mandate to bring reform in. In actual fact the review was started by the Tories in the late 80's and involved RICs because of a general consensus that reform was needed, what have we seen since, longer transaction times than ever.

HIPs did work to an extent and were easily adaptable as Paul Sailes stated, many improvements were proposed to Grant Shapps while he was in opposition but all he did was moved the goal posts, it became in a sense like having an argument with your dad, once you'd won the argument he'd just say " because I say so!"

The downright lies told and reported in the media about HIPs was unbelieveable including "responsible" organisations like the NAEA, did you know they have not canvassed their members fully since the introduction of HIPs in 2006/2007 yet fully backed the scrapping of HIPs. 100% of NAEA members that I deal with opposed HIPs when they came in but after 3 years they all now supported them and didn't want them to go after seeing how useful they were, we are still and will do for months ahead receiving calls from Solicitors for a copy of the HIP to be used in the conveyance process, proof of the lies told that they are never looked at by Solicitors who incidentally had also come round to approving of them in general.

The problem with HIPs was around them but not really about them, there was massive self interest opposition from powerful organisations who tainted ther HIP from an early stage combined with a Government that couldn't have made a worse job of introducing them if they tried. Lastly was the information provided about them and the HIPs Industry was as much to blame as anyone about this, no one really understood what a HIP was all about until you got to meet them face to face and explained it, many a time I've met a customer who was really anti when I arrived but changed to understanding and accepting what a good idea they were once they were explained properly, most consumers thought that the HIP was just the EPC.

Lastly the Government should have placed more emphasis on quality control of the HIPs Industry, Companies had invested millions to set up and quickly began to cut corners with the cheapest products they could secure, we argued unsuccesfully with CLG that a mandatory product to the consumer should have had Government invovlement in the QA issues surrounding it, had this be in place from the start the parties involved ie Lawyers etc would have had more faith in the product.

A very interesting article, and good to see the POV from the other side.

Firstly, I completely agree that it was tasteless to celebrate an act which has a massive affect on people's jobs. That was quite disgraceful.

Secondly, when HIPs were first announced, I thought they were a good idea. I still like the idea of such a pack, however as Nick pointed out, there were problems. Personally, I don't think you should have to provide one before you put it on the market. I think you should have to provide one before you sell. The reason is that, paying £500 odd quid for a HIP stops people speculatively putting their house on the market, which slows house sales.

I might be talking bollocks, but that is what I think about HIPs. The theory is, I think, a good idea. It was implemented poorly, however, and that's a shame.

However, it still leaves this question.

If HIPs are so good, people will be willing to pay 500 pounds for them.

If they are willing, why do you need to make them compulsorary?

The answer is that people don't want them. That was the only reason that they were made compulsory.

So back to Mr HIP. Why do you want to force people to pay for something they don't want or need?

Nick

I find Colins claim that 100% of NAEA members he deals with support the HIPS laughable and don't believe it. I haven't come across a single person amongst vendors, buyers, solicitors or any other profession within the industry who deos support them. At every ARLA and NAEA meeting it's spoken about and every single person said they were bad for the industry and put a stranglehold on house buying. When the news broke that they were suspended it was like party time with the good news flying round the industry like a rocket because HIPS was the killer blow to the industry. I didn't hear a single comment saying what a shame, HIPS were useful, etc. etc.

Many believe they were a tool for the government to introduce yet another VAT income stream. They did not help buyers or sellers. The EPC may have some benefits in the long term but it's hard to see how and I have my doubts.

I do have sympathy for HIPS companies. What's happened is not their fault and Paul has a point about the publicity. I didn't hear about that and it does seem in very bad taste to rub peoples noses in it when 1000s of jobs are at stake.

By the way, who is Jerry?

HIPs weren't introduced for the fun of it - in the 80s & 90s there was a major problem with how properties were being traded and HIPs were supposed to be the solution. Whether you think they were the solution or not the decision to be made is whether to go back to the system which has been operating since the 1930s revolution in Land Registry, or whether to develop something a bit 3rd Millenium.

My own choice is to move forward, maybe with drastic modification and improvement, but nevertheless NOT going back 80 years.

@The Landlord - you been spending too much time in the USA! lol

So HIPS solve a problem. So why make them compulsorary?

If they work and are cost effective, people would willingly use them.

The proof was that people didn't want them. In the time they have been in place, they didn't solve anything either. No evidence for any effect.

What is the real problem? It's that the government all too often draws a boundary around the public sector. The effect is the effect on things inside that boundary, and bugger to those outside.

For example, lets get HIPS in, because we will get an increase in VAT. Nothing about the pointless nature of HIPS and the huge cost to others.

It's the same with regulation. ie. Force more people to fill out tax forms. Introduce new tax forms. IR35 is a good example. It's all about the tax take, nothing about the cost to business. Outside the boundary, so not a concern for the government.

For example, what are the inefficiencies in the housing market when it comes to rental?

1. Housing benefit rules.
2. We have landlord registration
3. We don't have tennant registration
4. Eviction is a biased game.
5. Effective redress isn't in place, either way

The only one I agree with is deposits in separate accounts.
HB should be paid direct, and the local authority has to tell the landlord of a change in benefit. If the LA carries on paying, its the LA's problem and not the landlord. They aren't in a position to check.

Nick

Hello Nick

You have twice mentioned 'So HIPS solve a problem. So why make them compulsorary?'

Well simply if they are not compulsorary then a vendor could end up paying for his own searches and for the property he is purchaseing. That would of course be unfair.

Anyone with the most basic grasp of HIPs can understand that.

Of course you can also add that if one party doesn't have the correct documents in place than the whole chain can be held up, that's why to work any pack needs all parties to be involved.

Sometimes things have to be compulsory, I wouldn't MOT my car every year if I didn't have to yet I know it's in my own interests to.

HIPS at £500 is rubbish and shows the continued mis information about them, I could supply both a HIP and the sales conveyancing for that price.

AuntyP

You can dispute my comments about NAEA members but I can guarantee they are totally correct, i do wonder how many people who comment on HIPs know aht they were about and what was actually included in them, a very tiny minority I'd guess from the rubbish that has been written about them, the ignorance and vested interests of those involved in this Industry is why the last Government felt that legislation was needed in the first place, Grant Shapps must have had his arse bitten by a HIP pack because he's been that vindictive against them and anyone involved in the Industry.

I have never looked at a HIP when buying a property. Whilst an excellent idea in principle they were just too expensive and the only person remotely interested in them was my conveyancing solicitor.

They were ill thought out and, in combination with the continuing ridiculous policy of the EPC, were a white elephant from the start. I do feel very sorry for those who invested time and money into this "pyramid scheme" .

The idea of providing information crucial to making a decision at the front end of the deal is still an excellent idea - Notification of planning issues, neighbour disputes, the provision of a pikey camp next door by the PC coincil, sewage etc is exactly what people need to know - but not at £500.00.

This is the problem with this bloody country - people are too greedy. Instead of reducing HIPS to say £150 and then getting more turnover because of the lower cost the first thought is how much can I make from this?

Yet another of the Labour Governments wet dreams about "empowerment".

Jools

Sarah, you misunderstand the point.

Why make the compulsorary?

What's the test that should be applied? It's not like an MOT. An MOT is to protect others from people driving dangerous cars. i.e. You can be adversly affected even when you haven't entered into any deal with the driver of that dangerous car. I've no issue here.

However, with a house, its different. You have every opportunity to look at the property before you buy. You are a willing participant.

So on the compulsion. Think of it in evolutionary terms. What conveys the most advantage and how you test for it. It's simple. You let people decide if they want a HIP or not. If HIPS are so good, then vendors will put up the cash for the HIP because they will get more on the sale than they would without one. If HIPS are not worth the money because there is no difference in sale price, they won't. For a buyer, they can make the judgement. Go for a HIPed property because you save on the searches etc, or ignore them completely because they don't work.

ie. Let competition sort it out. However, the government didn't do that. That means you have to ask the question, why?

It's because they knew what people would decide. They would decide no. ie. People were forced to take HIPs even though they didn't want or need them. VAT is part of the answer.

Nick

Quote

"but not at £500.00.

This is the problem with this bloody country - people are too greedy. Instead of reducing HIPS to say £150 and then getting more turnover because of the lower cost the first thought is how much can I make from this?"

HIPS weren't £500, they were readily available at anything from £199 upwards, the problem with this country is people are bloody lazy and don't look around for a good deal, if you paid £500 the YOU were ripped off, that's not the HIPs fault but yours and your suppliers!

The reason your conveyancer was interested in the HIP was why they cost money, the searches involved have always been part of the conveyance process and were just moved forward in the process, your comment proves that the person they were designed for( the conveyancer ) used them, relatively speaking HIPs were a neutral cost but with all the benefits, the problem being they weren't utilised because of bad press , lazyness and ignorance by the consumer not helped by a HIPs Industry that failed to get the message across!

They aren't neutral. That's easy to show.

HIP includes searches, and yet costs more than just the searches.

Not neutral.

Again the clear point is, make them voluntary. Then if there are advantages, people will pay for them. If there aren't advantages, they will go the way of the dodo.

Nick

Colin,

Re-read my post. I did say I paid £500 for a HIP. I was buying NOT selling!

With regard to people being lazy - I believe it is the fault of the Estate Agents as it is they who provide the service and helpfully do not say " why not look around for a cheaper HIP". However if you do look around the EA will charge you more for their services.

Jools

Who pays for a HIP? Seller or buyer? In reality both do. Seller has to pay a higher price, buyer has to accept a lower price, the difference being the cost of HIP.

It's the usual argument that we can tax companies because people don't pay the tax so its painless.

In reality companies aren't taxed, its people. Either customers or shareholders are the payers of all taxes, abeit indirectly.

If you think that is wrong, consider VAT. You are unlikely to have paid VAT unless you are running a company. Or do you? Companies pay it on your behalf.

Nick

They were a waste of time and paper, meant absolutely nothing to anyone - had no real value at all, slowed sales, made them more expensive, and were carried out by people with virtually no knowledge of properties whatsoever, who were conned into a "scam" by the crooks we had in government who dreamed it up as yet another "non-jobs"scheme that their cronies could rake in a few bob running...........

I am sorry to hear that people will be losing jobs over this, but I am glad to see that they are no longer compulsory.

I hate dealing with Estate agents. They make the whole buying and letting process an absolutely nightmare for me.
If anything I don't think many people would grumble if we made it compulsory for estate agents to be better at serving customers rather than right rude buggers when we are trying to give them business :p

In reality nobody made big bucks from HIPs, not the HIP providers, Energy Assessors, Estate Agents or Solicitors. The much hyped intitial price of £750 came down to £200-300 very quickly once competition kicked in. Thats less than you used to pay for the searches alone.
I suspect the HIP companies were making less than £25 profit on each HIP, the energy assessors were only making £20 - 30 profit and the end seller, normally the estate agent, might make £50 if they were lucky ( or £200 if you're Countrywide) All these companies set up their business models on the sort of transaction volumes of previous years. Nobody foresaw the credit crunch/ banking crisis that has hit us in the last 3 years, just as HIPs arrived.I doubt if many of these businesses could have survived much longer anyway, even if HIPs had stayed.