The government’s 10-year plan to introduce Home Information Packs has collapsed less than 10 days away from implementation. Emily Wright reports on what went wrong, and what will happen next
It was a victory for the RICS. However Ruth Kelly tried to spin her announcement to the House of Commons on Tuesday, that was the truth of the matter.
Accompanied by much Tory mirth, the communities secretary told the house that she had decided to delay the introduction of Home Information Packs (Hips) for two months until 1 August. Furthermore, when they are introduced, they will bear little resemblance to the bold initiative that the Labour government proclaimed at the beginning of its tenure (see What is a Hip? overleaf for a quick guide to the saga).
The packs were not popular. A House of Lords committee commented earlier this month that it had “rarely seen such opposition to proposals”, and the Tories forced a debate and a division on them. But the main obstacle to their implementation was the RICS’ decision last week to ask for a judicial review of the communities department’s actions on the grounds of lack of consultation.
The court agreed to carry out the review, and Mr Justice Collins concluded in a preliminary finding that the RICS had an “arguable case”. He went on to suggest that Hips should only be introduced on 1 June, the date planned, if the packs did not contain energy performance certificates, or EPCs.
Kelly could not accept this. Improving the energy efficiency of the housing stock was a large part of the raison d’être of Hips. She told MPs: “The government believes that introducing Hips without energy performance certificates is neither practical nor desirable. They must go hand-in-hand.”
As soon as the judge’s ruling was known, Kelly’s officials began looking for a compromise with the RICS. By the time she rose to her feet in the house, this had not been achieved, although Kelly’s speech gave the impression that it had. It was later reported that the institution twice refused to sign a joint press release endorsing the 1 August date, and it emerged that the RICS had not even agreed to drop the judicial review unless the communities department agreed to a 12 week consultation on the EPCs. If the RICS presses this demand, the 1 August date will not be met, and the government may be forced to make a second, even more humiliating, climbdown.
For now, though, a RICS spokesperson is just keen to point out that Judge Collins’ decision “shows our fears and concerns were justified”.
A quick look at the four major concerns, raised by the RICS ahead of the judicial review proceedings (overleaf), shows that the institution was correct in its fears, and that it was the clear victor in the battle over the Hips.
The RICS’ four main concerns
• The 1 June start date
The RICS had a big win here, with the government agreeing to push the launch back to 1 August. Even then, Hips will only be required for houses with four or more bedrooms, with smaller properties phased in over time (a decision that will require the government to produce a legal definition of the word “bedroom”).
Unconvincingly, Kelly said that the postponement would ensure “a smooth introduction” of Hips, and that the decision to put back the implementation date wasn’t cause for embarrassment but in the best interests of the consumer.
Shadow housing minister Michael Gove mockingly sympathised with Kelly, before going over to the offensive. “You are retreating now, with only eight days to go. Is that because of stubbornness, vanity or sheer incompetency? Why did you press ahead? Why did ministers find themselves in court?”
Commenting on the decision, an RICS spokesperson said: “The additional time should be used constructively to iron-out the problems.”
• The lack of energy assessors
Another win for the RICS. The institution, along with many other critics, had been questioning for months if there would be sufficient numbers of trained energy assessors to award EPCs. There were many official assurances that these fears were baseless, and the Association of Home Information Pack Providers (AHIPP), the trade body set up to implement Hips, stated that there would be 2,400 assessors from the word go. Kelly astonished her listeners by stating that only 520 would be ready by 1 June. She admitted: “We do not have enough trained inspectors available to meet our needs.”
The severity of the situation paints a very different picture from the casual confidence of the energy trainers and pro-Hips groups. Stephen Callaghan, director of energy-assessors.com, a group set up to train inspectors, said earlier in the month that fears over a lack of assessors was nothing more than scaremongering. After Kelly’s announcement he said: “Consumers and the industry must try not to panic at this latest development.”
The government has also been accused of destroying the livelihoods of the assessors, many of whom have spent upwards of £10,000 to gain their qualifications. Robert Bryant-Pearson, chief executive of Allied Surveyors, said: “We now have a situation in which individuals have made sacrifices with a view to seeing their way clear to a new income from 1 June, only to discover with only a week to go that their livelihoods have been thrown in to confusion.
“Yvette Cooper and Ruth Kelly are both too churlish to resign gracefully and, having destroyed their credibility, will merely wait to be sacked.”
• The impact on the housing market
The RICS may not have been able to score a clear win here but it makes a fair point. The government has fudged the implementation of the packs by saying that people will only have to show that they have ordered one before going ahead with a sale.
This undermines the original point of the packs, which was to speed up the selling process by making the transaction more transparent. That will be a bit tricky if the pack is not available for inspection, and this afforded another easy target for the Tories. As Gove put it: “This has been a complete shambles. We were told there would be enough inspectors, and now we are told that there won’t be. There are still so many unanswered questions and now there has been a desperate last-minute retreat.
The housing market has been damaged by the government’s arrogance and incompetence.”
• The lack of effect on climate change
This final point is more difficult to pin down than the rest, especially since the RICS and the Conservative party support the objective of cutting domestic carbon production, and the certificates do appear to be a good way of getting people to make their homes more energy efficient.
The problem is more with the shortage of trained energy assessors, and the effect that this shortage will have on the housing market if EPCs become a mandatory part of the packs.
Some argue that the RICS’ de facto opposition to the certificates will exacerbate climate change. Mike Ockenden, the director general of AHIPP, said: “Ruth Kelly’s announcement is extremely disappointing and is clearly linked to the steps that have been taken recently by the RICS.
“Now, the RICS has an awful lot to answer for. It’s on its head that thousands of people will suffer from a slow buying and selling process and that tens of hundreds of tonnes of extra carbon will be pumped into the atmosphere.”
1997-2007: How Hips lost their cool
April 1997 Hips proposed in Labour’s general election manifesto
November 2003 Government announces plans to introduce them in the Queen’s speech
November 2004 The Housing Act, which includes Hips legislation, gets royal assent
June 2006 Requirement for home condition reports, detailing state of property, ditched
November 2006 Hips trialled in nine areas, including Southampton and Newcastle
9 May 2007 Conservatives force a vote in the Commons, losing 306 to 234 MPs
17 May 2007 High Court indicates sympathy for RICS’ judicial review argument
22 May 2007 Government admits defeat
1 August 2007 Revised date for implementation of initiative
What’s a Hip?
Hips require owners to gather the legal information that used to be compiled by a buyer’s solicitor. The pack should include the terms of sale, evidence of title, a property information form, a fixtures-and-fittings form, planning consents and an energy performance certificate.
Hips supporters argue that by providing this information at square one, the process of buying and selling homes should run more smoothly, and fewer deals should fall through – saving an estimated £350m a year.
Critics say the high cost of compilation, perhaps £1,000, could lead to a slump in the housing market.
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