Hips Update

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Hips Update

In July 2007 the Government announced new proposals to phase the introduction of the Home Condition Report of the Home Information Packs (HIPs). Housing Minister Yvette Cooper declared that the most controversial element of the packs, the Home Condition Report would now not be compulsory next June as planned. There would be further testing later this year on the other aspects of HIPs, with dry run tests on 14,000 home information packs with searches needed before the Home Condition Report could become compulsory.

It seems the Government's main concerns were on readiness of the industry for HIPs, which led to the plans for a rethink on the Home Condition Report part of the pack. An estimated 130 MPs signed a motion in early July against the packs. There were also concerns there would not have been enough inspectors to cope with demands for the home condition reports, with plans to train 7,500 inspectors by 2007, way behind schedule.

Consumer group Which warn that by taking out the Home Condition Report from the HIP, they will confuse consumers about what should and should not be included in the pack. They believe some firms may take advantage of this confusion to exploit sellers and buyers.

An estimated £225m has been spent by firms such as mortgage lenders, estate agents and pack providers, in preparation for the introduction of HIPs next year. The Government has not said how much the revised packs will cost. Although originally it was thought the complete HIP would cost around £1,000 it has been estimated that they may still cost up to £600, even without the Home Condition Report. It is believed that the Energy Performance Certificates alone may cost in the region of £250.

HIPs were phased in from August 2007; however they only included searches and energy performance information. Housing Minister Yvette Cooper said the packs would go ahead containing local authority searches, title deeds, key legal documents and energy performance certificates, with people including home condition reports on a voluntary basis.

From the start date of 14th December 2007, all homes for sale on the UK market, regardless of how big or small, must have a Home Information Pack. Home Information Packs collect all relevant information that enables the house buying process to be safer, easier, and faster. HIPS bring together evidence of title, and energy performance certificate, local searches and a sale statement. Home buyers have the right to see a pack, and home sellers are obligated to provide one.

Energy Performance Certificates

The Government is putting great emphasis and importance on the Energy Performance Certificates (EPCs) part of the HIPs to be introduced in June 2007. This used to be called the energy report. Housing minister Yvette Cooper believes that home buyers should be entitled to the energy usage information on the home they buy. It is also hoped that the certificates will help households reduce their energy usage which will in turn reduce the UK's energy requirements. It is estimated that homes use around a third of the UK's total energy.

This is part of a scheme by the government to help reduce the effect of global warming and avoid climate change by reducing the UK's carbon dioxide levels by 20% by 2010. Britain is to implement an EU directive on the energy performance of dwellings and commercial buildings. Around 25% of all carbon dioxide emissions in the UK come from energy inefficient buildings. It is estimated that this could be reduced by almost 15% or by simple measures such as better and effective insulation and more efficient appliances such as long-life light bulbs.

By following the proposals in the Energy Performance Certificate, the Energy Savings Trust estimates that homeowners will be able to save almost £300 a year bills. The Government also hopes that the information from the Energy Performance Certificates could boost the growth of green mortgages and other similar incentives.

As part of the HIPs, all houses sold in England and Wales will be given energy efficiency rating. The home inspector will provide this by recording the key information that affects the energy efficiency of a property. For example the efficiency of the boiler in the house and the depth of insulation in the roof will all be measured.

The data will then be entered into a special computer program, built to calculate the energy efficiency. It will then produce a result that will form part of the certificate. The results will be in the form of ratings. All houses will e given an A (good) to G (terrible). As well as showing the energy efficiency of a home the certificates will also show the impact of a house on the environment in terms of carbon dioxide. The energy rating given can be compared to 'miles per gallon (mpg)' for a car. The average new house is supposed to be built to a specification of C but with the poor quality of house building in the UK it is estimated that up to 60% fail to reach that target.

Based on the data produced on the house, the report will also include energy saving measures that can be taken to reduce household bills. They will include general recommendations that will be applicable to all as well as specific points for the particular property.

All measures given by the report will be in the form of recommendations, including practical information about a number of changes which can be made for the particular home such as double glazing. In extreme cases and where they think appropriate the EPC will also list ways to cut carbon emissions by recommending solar panels or wind turbines. A guide price to possible savings will also be provided.

EPCs will be required whenever any building, including dwellings, are constructed, sold or rented. The seven classifications of buildings are as below:

• Dwellings - new build (constructed)
• Dwellings - marketed sales (sold)
• Dwellings - rented
• Buildings other than dwellings - new build (constructed)
• Buildings other than dwellings - marketed sales (sold)
• Buildings other than dwellings - rented
• Public buildings which have a display requirement

As the EPC is an integral part of the Home Condition Report, the only people who can currently issue EPCs in this sector are licensed Home Inspectors. There is at present no nationally recognised qualification that focuses purely on the energy component of the Home Condition Report. There are a number of organisations that currently deliver energy rating training and software, but none are as yet officially accredited to be able to issue just EPCs for any of the seven housing sectors.

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