For those of you unaware, a few weeks ago, the newly formed Coalition Government scrapped the Home Information Packs (HIPs).
Unsurprisingly, most people were more than pleased to see the back of them. The added cost of selling a house just didn’t make sense for vendors and estate agents! But on the flip-side, there are thousands of people who have changed their lives/careers so they could make a living out of providing HIPs! What about those people?
As soon as it was confirmed that the HIPs were indeed going to be scrapped, I contacted Paul from hip-consultant.co.uk and asked him whether I could ask him a few questions about the killer blow that has pretty much destroyed his business.
Unfortunately, by the time I received the answers to my questions, I was due to go on holiday, so I couldn’t publish the interview while the iron was hot, which I apologise for. But nonetheless, here’s how Paul feels about the scrapage of HIPs, and how it’s affected his business…
1) How has the scrapping of the HIP’s affected your business in terms of:
a) Staff e.g. have you personally had to let people go?
c) General business model
Unfortunately, Paul refused to answer the above questions, which I can fully appreciate and understand. I did say he could answer whichever questions he felt comfortable with.
2) How do you feel the new coalition government has handled the situation with HIPs?
Firstly, of course the government recent actions have affected us very badly and I disagree strongly with both the way the Conservatives handled it both in opposition and now government. We had contact with Grant Shapps’s (housing minister) office and whilst they generally responded we were never given any confidence they were listening or managing the situation well. The majority of this correspondence and our concerns we detailed on our blog.
I don’t want to pick over the bones too much as I accept HIPs are history and we all need to move on, me included. However, I know many have been left feeling perplexed and bemused by the way it was actually conducted. Most people are now realising we have taken a step backwards and there is now no obvious way forward.
3) Who and how many people have been affected by scrapping HIPs?
No-one knows what the actual number of job losses will be though most tend to agree it will be between 3,000 – 10,000 jobs.
4) Any words to those that wanted the HIPs scraped?
On the day it was announced we had Eric Pickles (secretary of state), Grant Shapps (housing minister) and Kirsty Allsopp (TV presenter / housing expert) using the opportunity as a political and self promotional PR event. They cut ribbon, laughed and joked and made speeches on what a great day it was, all the time knowing they were going to decimate an industry.
Stand back from whether you in favour of HIPs or not and ask yourself was this PR event not done in rather bad taste. I can tell you many in the industry were shocked and left feeling absolutely disgusted at this.
For example, I do wonder if a change to the law which meant two car factories closing down each with 5,000 job losses or 10,000 job losses at BA due to changes in government legislation would have been welcomed in the same way as our industry and the job losses to follow. Would the secretary of state be marking the day with a jubilant event set up by his department? Would the government recruit celebrities to attract more media attention?
5) Over the years of distributing HIPs, do you think they’ve improved the buying/selling process of properties?
Simply, yes. I am not going to try and kid you that they were perfect, they were not and needed improvement. To expect that it was going to be perfect from the start would be very naive. From experience, a lot of members of the public didn’t understand the HIP; it was one of the industries’ biggest failures in my opinion but that is a different story. Once the concept was explained most could see the solid basis on which and why it was introduced.
However, the HIP was quite simple in that it gave a vehicle or shell if you like for upfront information to be provided about a property for sale. This shell could have been used to include information which the industry felt would help the home buying and selling process. There was the opportunity to add more information, remove existing documents or even change timescales associated with certain documents such as searches if required. This was not explored by the government and I feel that is a great shame.
As I stated there were mistake made along the way during the introduction and implementation of HIPs without doubt. However, the concerted anti-HIP campaign I witnessed was quite unbelievable at times. I have often felt that if the same amount of effort, co-ordination, resources and dedication to the aim of bringing down the HIP had been put into working with it, the industry could have really moved home buying and selling forwards and not backwards.
Whilst it was obvious companies such as ours, HIP-Consultant.co.uk would benefit from the success of the HIP, there are clearer businesses, organizations and their members who will now benefit from its demise.
One can question whether this is the real root of the problem to the home buying and selling process and its reform? Have these organizations become so powerful they control the market and present problems and issues comparable to what we saw in the banking crisis?
Unfortunately, due to Grant Shapps (housing minister) stance and personal crusade to scrap HIPs it was almost politically impossible for him to listen to reason and adapt not scrap HIPs. Grant Shapps has never put forward alternatives to help the home buying and selling process that am aware of.
6) On a personal level, how angry/frustrated are you about this whole issue? What part about it angers you the most? Let it all out. As you may know, censorship is not an issue on my blog.
At present I remain incredibly frustrated, angry and annoyed at the destruction to our business and it feels like an incredible waste of the time and effort we have put in over the last 3 years. We had started to look at the future in case HIPs were scrapped; with hindsight we should have started this sooner.
We believed Grant Shapps would honor his official statement to us and the industry when he said he would consult with the industry before scrapping HIPs. Grant Shapps refused to explain to us about how he envisaged the consultation process would work. I should have been more skeptical on the consultation actually happening as I was never sure what the point of it was meant to be when they had clearly made their minds up of the end goal.
It remains unclear if the way the government suspended HIPS was lawful and there are talks about whether this will be challenged and put to the test in the courts. It does not appear there was a great deal of evidence to suspend the legislation and if it would be ‘classed’ as ‘exceptional circumstances’ as per the section of the HIP regulation which I understand the government used to implement the suspension. This area is not something I know a great deal about so I will refrain from giving out amateur analysis.
It still came as a shock the day it was announced. The following responses by some experts/commentators on various points has added insult to injury for many. Some of the comments and statements are almost bewildering and lack a great deal of insight to say the least.
For example, Kirsty Allsop “property expert” and “special advisor” to Grant Shapps the new Housing Minister. I have to wonder whether Kirsty Allsopp even knows what was in a HIP or what HIPs were all about. I have personally invited her to a Q&A interview on our site after a little contact with her though she has not responded to this invitation.
Kirsty claimed on Radio 4 quite categorically that “Lawyers fees never dropped” while HIPs were in. So I have to ask, did Kirsty Allsop believe that the HIP providers were acting as lawyers for the seller and therefore they should pay the Lawyer less for Conveyancing or is she claiming that thousands of Lawyers have defrauded their clients by not dropping their disbursement charges by charging for a new search even though they used a search provided to them in a HIP during the conveyance?
Kirsty also spoke about ‘some kind of statutory pack that everyone does before they market their house’ at (about 3 mins 50 secs) being a good idea. It is an incredible statement and I am lost for words every time I listen to it. I am sure Kirsty will say this ‘statutory pack’ would be completely different to a HIP though I would be interested to hear what she would suggest goes into this ‘statutory’ pack that could not have been included into a HIP if the desire had been there.
I do not question that Kirsty’s intentions are to improve the home buying and selling process. However, it seems to be mis-guided to campaign to scrap HIPs, and then within hours suggest a replacement which could have easily been accommodated within the current structure.
With Grant Shapps refusing a review of the home buying and selling process it looks as if we will return to the outdated and lengthy complicated process we had prior to HIPs for some time to come.
7) So, what now? Any ideas on how you’re going to adapt your business to the scrapping? Obviously, EPC’s are still required, but are generating those enough to survive on?
Yes, we will still provide energy performance certificates as a standalone service. The business has always had a good level of diversity and varied income streams, though HIPs was the main one as am sure most will recognize. It has gone un-noticed to some extent but the government has lessened the importance of EPCs. It is my belief they would have scrapped them also if it had been legally possible.
We as a business will evolve, though am sure it will take time for us to develop new areas and expand on existing ones. We have just launched a new website Housing Energy Advisor which has recently gone live and we are currently trying to rapidly develop further behind the scenes.
In regard to our Housing blog, we have received some good support for us to continue this, which is our intention. The articles and commentary remain relevant and we will be promoting our new meaning for HIP; ‘helping innovate property’. We will continue to write about property on our blog and have a great series of articles underway de-mystifying Conveyancing, written by a Conveyancer I must add!!
Many thanks for the opportunity to air our views.
Just like to thank Paul for answering my questions, and providing me with such in-depth responses. I wish him and his business the best of luck for the future.
Jerry’s final thoughts…
Love ’em or hate him, scraping the HIP’s is going to have a major impact on thousands of peoples livelihood.
To make it clear, I think HIPs were pointless when they were introduced, and I still think they’re pointless now. They should NEVER have been introduced in the first place, in my opinion. But the fact is, the Government did introduce them, and on the back of that, thousands of people created jobs around the scheme. Fair enough.
However, I don’t agree with how the Government put something like that in place, encouraged thousands of people to get training and build careers around the scheme, and then completely scrap them. That’s bullshit.
Disclaimer: I'm just a simple landlord blogger; I'm not qualified to give legal or financial advice. Any information I share is my opinion based on my personal experiences as an active landlord, and should never be contrued as legal or professional advice. For more information, please read my full disclaimer.