Sunday, May 13, 2007

Southampton Needs a HIP replacement...

Everyone who is thinking about moving home
shortly could be hit by the HIP...

The way Britain buys and sells its houses is about to undergo a huge change with the imminent introduction of 'Home Information packs' but the danger is that these ill-conceived, bureaucratic, incompetently delivered proposals will do huge damage to the property market in Southampton.
Home information packs (HIPs) were supposed to reduce the misery of gazumping by speeding up house sales. Sadly, they will achieve the opposite. They contain nothing to prevent either side backing out of the contract. Labour's big idea – to make sellers conduct the survey – was scrapped last year when it had become obvious that mortgage companies would still require buyers to commission their own. What is left has become nicknamed the “half-HIP”, which unsurprisingly is as useless as it sounds.
Locally, the biggest problem in the housing market is the shortage of properties for sale, especially of family homes which has pushed up prices. It is true that stamp duty has certainly made people think twice about moving but the half-hip will add another £750 or so. £750 may be small beer compared to the cost of a property in Southampton, but it is another fee that struggling home owners will have to find up front. Crucially it is a cost you must bear whether or not you make the sale. Potential sellers can't even test the value of their property without a HIP, a real barrier to selling property in Southampton while the packs will end same-day sales. The National Association of Estate Agents called the HIP “purely an administrative burden to the process” of home-buying and selling which, it is convinced, “will adversely affect the market”. So why proceed? Because supporters such as the MP Alan Whitehead in Southampton Test are now using it as a prop for something completely different: the need to make homes more energy efficient. How so? A so called 'Energy Assessor' will give homes an energy rating, similar to that for washing machines, and suggest ways to improve them, rating the property A to G. The trouble is this government does not seem to recognise why people buy houses; will it be on its energy rating as opposed to say the property's location, the number of bedrooms, the size of the garden or even the price? Frustratingly for buyers and sellers there are currently only a few thousand trained energy assessors to cover the whole of the UK- delay seem inevitable as the packs slow down the sale process, creating worry and red tape at a time when rising interest rates could hit the housing market.
As the need to tackle climate change becomes ever more important, all homeowners need to take responsibility for their households. However, if this government continues to pursue environmental policies through what are widely regarded as stealth taxes, they will extinguish all hope of advancing the environmental cause with a growingly cynical public.
The way to stop gazumping is to create pre-contract contracts. The way to reduce home energy use is to build cleaner power supplies, targeting all homes intelligently, not just those which happen to come up for sale. for example, in the UK, it is estimated that there are eight million homes without cavity wall insulation and six million without loft insulation. Rebates on council tax or stamp duty, to get the work done, paid for by central government, could be a powerful incentive. VAT could be scrapped on green refurbishments, which currently adds 17.5 per cent to every bill. 'Smart meters' showing people how much energy they are using could be fitted by utility providers having been shown to reduce consumption by between 5 and 10%.
Last week Gordon Brown pledged that if he became leader of the Labour Party, he would govern “in a different way’’, listening to the people and learning from the mistakes of the past.
If so, the Chancellor will scrap HIPs now, before he takes over the reigns in Downing Street.


Blogger Jeremy Moulton said...

The Government pushed pushed ahead today with its Home Information Packs. They serve no purpose and represent a stealth tax of £600 to home oweners.

8:27 pm  

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