Ian Cowie at the Telegraph has an instructive little piece about that now-abandoned scheme of the recently departed government, the Home Information Pack.
So, farewell then, Home Information Packs (HIPs). You were about as much use to homebuyers and sellers as a chocolate teapot. You were even worse value for people who spent time and money training to become HIP inspectors.
Home Information Packs, for the benefit of our overseas readers were… sorry, my brains are going to flee at speed through my nostrils if forced to spend more than a gonzosecond contemplating a thing engendered by John Prescott and Yvette Cooper. HIPs were a very boring thing to do with selling your house where you had to pay the government to send around a fluffy tailed squirrel to tick a box saying you had double glazing. The original idea was not obviously stupid. It was going to stop gazumping by – by – John Prescott! Yvette Cooper! Alert! Alert! Imminent overload! – anyway, there is some similar scheme in Denmark where they have nice painted furniture and socialism works. Alas, they did some research and found that gazumping is only a factor in 2% of UK house sales. Time for the chop, then? No, Minister. Not after they had thought of the name and everything. Won’t somebody think of the publicity? “Minister in a hip new idea!” “Hip, hip hooray for HIPs!”
So HIPs were reinvented as being all about the Home Condition Report, these being something like quickie house surveys except the seller rather than the buyer has to arrange them and pay for them.
Do you see the problem with that?
Full marks. Not very many marks, though, because so did practically everybody else. That, dear readers, is the particular aspect I wish to highlight as being typical of the modern state. The modern state is like the stupid driver at 5 minutes 30 seconds in the Demented Cartoon Movie.
Sure, everyone hates surveyors and has heard a horror story about them, but you did not have to be a genius to figure out that buyers were still likely to want a professional they could sue carrying out the survey rather than a government squirrel. All the home condition report would mean was that in practice the sellers and the buyers would both have to pay. Everybody, even the government, seemed to know it was not going to work but somehow it lumbered on.
Adverts appeared in the jobs freesheets for squirrel-training. It seemed a nice government-backed job for people who were somewhat educated but not very good at getting jobs. Thousands of well-spoken but slightly desperate people took out loans for this training.
Eventually the government got cold feet about the slowdown in the housing market and said that it would remove the requirement that Home Condition Reports were compulsory. So there was no point left in HIPs and they might as well be dispensed with altogether? No, no, HIPs were still totally vital because they were all about the … the … the Energy Performance Certificate. How could a prospective purchaser live without knowing whether his potential dream house was a nice A (short green stripe) or the blood red and scarily long stripe that denoted a wasteful G?
Fine, it turned out. Purchasers were already able to figure out that Ye Olde Cottage with the leaded windows was a G with a Stripe of Shame as long as your lower intestine and if they wanted Ye Olde Cottage they did not care, and if they did not want Ye Olde Cottage but Ye Modern Boxe they could already see the double glazing. After two re-brandings HIPs had became a national moan. Still the Stupid Driver faced with the demand from the on-board computer to steer moaned, “But I’m bad at that.”
With the election and change of government the HIP finally died, unmourned. Even the Association of Sadder and Poorer Little Squirrels accepted the game was up.
Except that in the graveyard something stirs… the Energy Performance Certificate is required by the European Union.
They’re just one more way to shaft the public, exactly what you expect from a Labour government.
In the middle of selling my flat right now. The HIP was somewhat bungled, but I guess it doesn’t matter now. I almost feel for the company that presumably will now be shut down. Almost…
we’ll still have a mindless boondoggle of this sort in Scotland. Because … won’t someone think of the children. Or something
I don’t understand how this was supposed to stop gazumping. A word, by the way, I’d never seen before but have fallen in love with.
A colleague of mine was involved in a project designing and writing software which was to be used by the inspectors. Apparently it was all very easy you had to say how many windows there were and how many were double glazed , how many energy efficient light bulbs there were and how thick the loft insulation was etc etc. From that the computer used a simple formula to generate either the small green stripe of the nasty long green one.
Utterly pointless of course but he reckoned the job could have been done by a small trained monkey so god only knows why people were being charged £10K for a training course.
Eric,
Me neither.
As far as I am concerned, the HIP was the camouflage to get the EPC in place.
Why have an EPC?
My guess is – drum roll – taxation. Once all houses have an EPC they can fine, I mean, tax you on it until you behave.
The HIP also set the precedent for routine home inspections and that too could well be about taxing homes more rigourously and ensuring they are in the right band.
Nonetheless there was still blather in certain morning papers that up to 10,000 jobs might be destroyed (and in a recession, too)!
The evil!
However, all is not lost. We can re-create even more jobs, even more cheaply, by issuing squeegee merchant licences, which allow their holders to enforce a £20 charge upon every car they can encumber.
Or, hell, just employ a hundred thousand kids full-time as pickpockets, in order to increase the circulation of money and reduce economic inequality. They’d probably be more efficient at both than any official attempts to date, too.
Here in the backward, redneck USofA, we have a crude and iggerant way of dealing with this issue.
If you’re trying to sell your home, on the days that you have a showing, alongside the obligatory milk-and-cookies, you leave a year’s worth of gas and electric bills. That way, even a three-toothed hillbilly can see just what the energy consumption of the home is. If you don’t do this voluntarily (and many realtors will suggest that you do), a prospective buyer will simply assume ‘hey, this house costs a lot to heat and cool’.
What a concept. And the Gummint doesn’t even have to be involved at all.
Oh, wait . . . . . I get it now . . . .
llater,
llamas
Eric – I believe the idea wasn’t necessarily to stop gazumping, but to remove some of the financial impact of it from the buyer. Because buyers had to pay for a home inspection before they had a finalized agreement to buy/sell they were at risk of losing that money by being gazumped. In theory that could happen multiple times, and get quite expensive.
In practice, of course, it was mostly nonsense, though for a reason Natalie misses. For most buyers a second survey was required not because they were suspicious of the seller’s survey, but because their *lender* required one. Perhaps if the HIP had been in some way binding as a survey on the buyer, seller and lender it would have worked to stop gazumping (though the law of unintended consequences suggests not), but the half-baked job done by the government meant that would never happen.
They could have stopped gazumping by making acceptance of an offer a binding contract, as I understand they used to here in Scotland when proper solicitors bought and sold houses. Gazumping was considered an English disease. Then estate agents crossed the border…
No, it’s about the EU’s energy certificates and taxation. Gazumping was the excuse.
Our EPC was done by a trained monkey who tapped away on his PDA before telling us our score and that the difference between the actual score and the potential score was because we still had some incandescent lightbulbs.
So quarter of a mil on a flat and you’re supposed to care what fucking lightbulbs it comes with.
By the way, what’s to stop me drawing up a binding contract to stop myself from being gazumped? Is it that no-one would sign such a contract, or is there some other reason?
Rob – I submitted something longer a minute or so ago, but it looks like the submission was filtered (or I screwed up) – so the short answer is – there’s nothing to stop you doing it, or the seller for that matter.
I did it myself, with mutual benefit to the buyer and to me as seller. If the post doesn;t appear, I’ll repost.
[editor: hmmm…I see nothing from you pending and unpublished in the blog’s back-end. I think teh intenetz must have eaten it rather than our dreaded samizdata smitebot]
Well, in essence, the guy who wanted to buy my apartment in the late 80’s was fearful of being gazumped, having suffered it before, quite late in his purchase process.
My apartment was potentially quite sought after, and if I’d been more relaxed about selling, I could have held out for longer, and possibly sold at a higher price anyway – but I was emigrating (as I thought) and I wanted to clear the decks and not have a lump of real estate hanging around my neck. I’d benefited handsomely from the run-up in real estate prices anyway.
So, for about UKP 120 I executed a one-page contractual agreement that provided he could prove that he had a pre-agreed mortgage to cover the cost of the property, I would sell to him at the price I was asking. The sale was contingent ONLY on the bank’s inspection. I couldn’t raise my price, he couldn’t negotiate down.
So for UKP 120 I had eliminated most of his and my perceived risk, by locking in a price independent of any interference by the banks and lawyers.
My chief risk had been that the whole thing was going to proceed in good faith and at the last minute, he’d try to nickel and dime me down, which would have tied me up in dealing with a property sale while I was in Japan.
Why did I get the contract prepared and not him? I think I’d have offered to do one for anyone who came along and seemed to want to negotiate in good faith.
As an insurance policy (and as a sales gimmick) it was dirt cheap.
So it can be done. Thanks, Bod.
Rob,
Here in Oz gazumping is a non issue. When the sale is agreed the buyer puts down a tiny deposit and both buyer and seller sign an agreement making the sale final, contingent on both a satisfactory inspection and finance being approved by the bank/building society.
I had never heard of gazumping until I came to the Sceptic Isles.
Gazumping (flipping the good faith buyer the bird because you have just found a bigger fool) was [past tense] really only a problem in a rapidly rising market, when bigger fools were wandering the streets, begging sellers to take advantage of them.
There will be a few price oscillations on the way down, but it seems like the bigger concern today would be buyers backing out when they realize the guy across the road would gladly sell his similar property for a good deal less.
Government. Always dealing with yesterday’s problem.
They’ve been trying to get a similar agency in the US. Any house going on the market would also have to replace any appliance which did not meet new efficiency standards.
Shocker – GE backs this legislation.
Per CountingCats, here in Tennessee, there is a deposit or “earnest money” that makes things pretty settled pending the deal actually closing. This doesn’t necessarily prevent gazumping but then you have breach of contracts to deal with if it really puts the buyer out that much. I think we even managed to get a better deal on our house because we offered above the going rate for the earnest money (the sellers were motivated and wanted things to go smoothly).
As far as HIP, when you are selling a house, there is a standard form to fill out with a space at the bottom for anything you know might adversely affect the value of the house. If you lie, you open yourself to be sued. No squirrels or boondoggles required. Now, you might say the US is overly litigious but the alternative doesn’t seem to be much better.
Apparently, there is something called “gazundering” wherein a buyer contacts the seller just before exchange of contracts, and tries to reduce his offer.
The strains caused by this when a long chain is put at risk are quite substantial, apparently.
Yes, I must admit that the government has done a good think in getting rid of HIPs
And in stopping the drive to ID cards.
And in getting of the “child trustfunds”.
And in cutting back a bit on the “business and regional support” administrators.
Small things perhaps – but welcome.
You can still do it the old way in Scotland if you wish.
When your buyer phones up to haggle, cut him short; say “get your lawyer to put a written offer to my lawyer, then and only then I will give you an answer”.
They’ll kick and scream, of course, and try to get you to name your price, but stick to your guns and you will have a binding offer in due course, probably a higher one than you would otherwise have got.
Estate agents can go to hell.