HIP it isn't. (Home Information Pack) Opportunity for mass corruption
Hot on the heels of a previous ill-conceived Government initiative (the IT training scam - remember that - when dozens of companies set themselves up to train the IT illiterate and pick up Government (our) money for doing so) when companies took the trainees money but didn't deliver anything then declared themselves bankrupt? A case of the incompetent (or even fraudulent) leading the blind and naive.
A gang of crooks who ripped off the government for more than £2m through a fraudulent computer skills training course have been jailed for a total of nine and a half years. Stuart Leary, 39, of Poole, Dorset, John Stirling, 41, of Glasgow, and Steve Moran, 29, of Birmingham, savored a lavish lifesytle by exploiting Department of Education and Skills programme (DfES) set up to provide subsidised learning for students working from home. And these, albeit a higher profile, weren't the only ones at it.
This is the latest potential scam, fraud, fiasco. Don't politicians ever learn from the past? Does the delivery never measure up to the hype? Don't they ever think things through? Whatever happened to risk assessments and exit strategies?
Michael Coogan, head of the Council of Mortgage Lenders (CML), said HIPs now looked like a costly indulgence. The aim of the HIPs is to provide potential buyers with much more information right at the start of the home buying process. The government hopes this will cut out unnecessary delays and reduce the amount of money wasted on aborted transactions.
Commenting on yesterday’s Budget and its impact on the future of Labour’s planned Home Information Packs, Shadow Housing Minister Michael Gove said:
“The Budget threw the future of Home Information Packs into even greater confusion. Buried in the Budget's detail the Chancellor has declared that the Energy Performance Certificates - the remaining keystone of HIPs - no longer need to be provided when properties are marketed.
This announcement undermines the approach Ruth Kelly's Department has been taking for the last twelve months. The Chancellor also indicated that while HIPs could be introduced 'later this year' he gave no undertaking to stick to the June 1st launch date. Even Kirsty Alsop is agin them and would, if asked, probably say that she would like to"knock them down".
However, for the astute and COMMERCIALLY ETHICAL it could offer a tremendous opportunity to create a UNIQUE SELLING POINT AND VALUE PROPOSITION. (I'm not about to give that bit of info away for nothing - if you can't figure it our for yourself - then give me a call.)
The Home Information Pack (as currently configured) is a bureaucratic, one size fits all attempt at regulating the property market. It won't work, is DOOMED to failure and it won't be long before it flounders on the rocks of practicality.
It means more costs for sellers and potentially more costs therefore for buyers. It will actually contribute to a constriction of supply in the market. HOWEVER, it won’t give buyers the confidence that they deserve and it also won’t give lenders what they demand in order to ensure that they can back up any transaction.
It's not just me. The house selling industry is also split. Nick Salmon is an estate agent who represents Splinta – Sellers’ Pack Law Is Not The Answer. He says (paraphrasing).......
Would you rely upon a survey that had been done 6 months ago? This pack is produced by the seller. The buyer must still beware as ever. Wouldn’t any solicitor worth his salt say to me you should get your own survey done because you can't be sure how old that information is, whether it’s still true and relevant.
The lender is unlikely to accept it (because if he did he would loose some additional potential revenue). They’re going to do their own valuation survey because there isn’t a valuation in the pack, is there.
In the United States where they’ve had automated valuation models for over a decade, they are still making physical inspections of over 40% of the properties that people apply for mortgages on. It’s going to be similar over here.
Turnround time? They’re talking in terms of five days eventually, but there is an awfully long way to go before that happens because the technologies are not in place. You won’t be able to put your property on the market for up to two weeks after you instruct the agent whilst the pack is being prepared.
Three quarters of failed transactions are due to something that the buyer does, not the seller. Buyers are very good at pulling out of deals and they do it for a whole host of reasons. Less than 4% of all failed transactions are due to an unexpected bad survey. The biggest factor in people pulling out of a deal is because they can’t find something they want to buy in the sellers case.
The Home Information Pack (as currently configured) is a bureaucratic, one size fits all attempt at regulating the property market. It won't work, is DOOMED to failure and it won't be long before it flounders on the rocks of practicality.
It means more costs for sellers and potentially more costs therefore for buyers. It will actually contribute to a constriction of supply in the market. HOWEVER, it won’t give buyers the confidence that they deserve and it also won’t give lenders what they demand in order to ensure that they can back up any transaction.
It's not just me. The house selling industry is also split. Nick Salmon is an estate agent who represents Splinta – Sellers’ Pack Law Is Not The Answer. He says (paraphrasing).......
Would you rely upon a survey that had been done 6 months ago? This pack is produced by the seller. The buyer must still beware as ever. Wouldn’t any solicitor worth his salt say to me you should get your own survey done because you can't be sure how old that information is, whether it’s still true and relevant.
The lender is unlikely to accept it (because if he did he would loose some additional potential revenue). They’re going to do their own valuation survey because there isn’t a valuation in the pack, is there.
In the United States where they’ve had automated valuation models for over a decade, they are still making physical inspections of over 40% of the properties that people apply for mortgages on. It’s going to be similar over here.
Turnround time? They’re talking in terms of five days eventually, but there is an awfully long way to go before that happens because the technologies are not in place. You won’t be able to put your property on the market for up to two weeks after you instruct the agent whilst the pack is being prepared.
Three quarters of failed transactions are due to something that the buyer does, not the seller. Buyers are very good at pulling out of deals and they do it for a whole host of reasons. Less than 4% of all failed transactions are due to an unexpected bad survey. The biggest factor in people pulling out of a deal is because they can’t find something they want to buy in the sellers case.
Also we’re going to need over 7,000 inspectors nationally. Of the first 500 who took their exams, 200 of them failed (the next bit of news will be that the Government is "dumbing-down" the exam to get more passes) and we’ve only got 15 months to get these people in post. That isn’t going to happen, is it?
What happens if the inspector doesn't point out something that you, the buyer, thinks is important and which later costs you money (like a serious building defect). Are the inspectors or their company going to be liable? You can bet they aren't. They'll smother their report with a get-out clause in every paragraph. Therefore it won't be worth the paper it's written on. What a recipe for disaster.
Trevor Kent says "Trading Standards Officers will be able to fine private sellers £200 a day if they are overheard mentioning their home is on the market in the pub, if they haven't got a HIP.
Agents can be fined AND banned from ever earning a living as an estate agent if they are similarly caught offering their clients' homes for the first 14 days before their already ordered HIP arrives.
Shortage of Domestic Energy Assessors who will spend an hour poking round each home BEFORE permission to market is given will have to send their reports on the property to the government (even if the house eventually doesn't even go on the market) and the average cost to owners whether or not it sells will be £600. What the government will do with 2m reports a year is anyone's guess."
Agents can be fined AND banned from ever earning a living as an estate agent if they are similarly caught offering their clients' homes for the first 14 days before their already ordered HIP arrives.
Shortage of Domestic Energy Assessors who will spend an hour poking round each home BEFORE permission to market is given will have to send their reports on the property to the government (even if the house eventually doesn't even go on the market) and the average cost to owners whether or not it sells will be £600. What the government will do with 2m reports a year is anyone's guess."
posted by GlynWild at
5:15 PM
