Blanchard Consultancy – the independent construction consultant

In a statement this afternoon, the Department for Communities and Local Government (DCLG) said it was removing Home Condition Reports as a mandatory part of Home Information Packs (HIPs).

We republish the statement in full below:

The Government today announced plans for the introduction of Energy Performance Certificates as part of the phased roll-out of Home Information Packs to help consumers cut costs and waste when buying a home and help the environment too.

In the light of the plans for testing and concerns about the readiness of industry, the Government announced new proposals to phase the introduction of HIPs, prioritising the delivery of energy efficiency information with further testing later this year on the other aspects of HIPs.

This means that HIPs will be introduced in June next year with searches and energy performance information, enabling buyers and sellers to get A-G ratings on their homes similar to fridge ratings as well as a list of practical measures to cut their fuel bills and carbon emissions at the same time.

The Energy Savings Trust estimates that by following the proposals in the Energy Performance Certificate, the average homeowner will save £300 a year on fuel bills. Government also believes that the information could be used to support the growth of green mortgages and other incentives.

However on the basis of detailed consultations with industry and the latest market and testing information, the government has decided to phase the roll out of other aspects of Home Information Packs, introducing the rest of Home Condition Reports on a market-led basis in the first instance, in order to ensure a smooth implementation
with clear benefits for consumers.

Minister for Housing and Planning, Yvette Cooper said: "HIPs can deliver great benefits for consumers and the environment. But it is important that they are implemented in a sensible way, based on proper testing. That is why we will begin with the most important element - energy efficiency ratings for homes. This will mean practical information for homeowners on how to cut their fuel bills and carbon emissions. People should be backing HIPs to help everyone respond to the global challenge of climate change.

"We look forward to working with the lending industry, HIP providers and those training to be home inspectors as we develop the next steps."

The dry run will begin with further consumer research in the summer as well as analysis of over 14,000 HIPs produced so far, in order to inform area based trials later in the year which will be independently monitored.

Ministers are determined to avoid the risks to consumers and to the implementation of Energy Performance Certificates from a "big bang" introduction in June next year. In particular, further testing is needed on the costs and impacts of Home Condition Reports and the government does not want to see early roll out of Energy Performance
Certificates jeopardised by late amendments or delays to the rest of the scheme.

The latest information casts doubts on the readiness of the industry to be able to pass on the benefits to consumers from next June. There are concerns about the number of home inspectors who will be in place in time. In addition evidence from the Council of Mortgage Lenders shows that many lenders will not be in a position to make maximum use of Automated Valuation Models which will support the use of the Home Condition Report. The Government is keen to avoid risks to consumers from industry delays and potential late changes to the implementation timetable next year.

Therefore, the Government will begin by promoting the take up of HCRs on a market-led basis - including examining the case for pump priming and other incentives. Mandatory introduction of Home Condition Reports remains on the table, however the Government wants to encourage market led take up first, in order to allow a more flexible roll-out that responds to consumer demand and the results of further testing. The Government will urgently review with key stakeholders what support is needed to ensure that there are sufficient home inspectors in place, and that consumers are fully protected.

The Tories have demanded the government scrap its forthcoming house sale information packs, saying they could cost homeowners up to £1,000 each.
They are using an Opposition Day debate in the House of Commons to show "profound concern" over the controversial house sale packs.

The Tories say there has been a lack of preparation for the packs, due to start in England and Wales in June 2007.

Ministers insist it will speed up sales and make the process cheaper.

The Conservatives' campaign features TV presenter Kirsty Allsopp, of Channel 4's Location Location Location, along with the Tory housing spokesman Michael Gove.

"If people trust these dodgy home information packs, I fear they will be lulled into a false sense of security," said Mr Gove.

"If they don't and commission their own survey, costs will be duplicated."

Speedier transactions

The new law will require sellers to assemble, at their own cost, a pack including title deeds, local authority searches, answers to standard questions and a home condition report, all of which will be given to any potential buyer.

The aim is to knock weeks off the normal house-buying process, reduce the scope for gazumping and to make sure that fewer deals fall through.

The government says they will cost about £650 for each seller to put together, but save buyers £1m a day, which they currently waste in aborted transactions.

A survey by Oxford Economic Forecasting suggested the packs might cost more, about £1,000 each, and that their use could lead to more unemployment and depress spending.

The Daily Mail newspaper reported that ministers wanted an urgent review of the programme after warnings it could adversely affect the UK's housing market.

It said 125 MPs, including former Labour ministers Frank Field and Kate Hoey, have signed a cross-party Commons motion asking Chancellor Gordon Brown to axe the house sale packs.

Average house prices in England could rise from £195,000 to nearly £290,000 by 2011, research from Oxford Economic Forecasting (OEF) has said.
Under-supply of new housing will fuel house price inflation, the OEF added.

Getting on the housing ladder will become even harder, it said, as house prices rise from eight times average salaries to 9.2 times in 2011.

David Orr, chief executive of the National Housing Federation, said there was a "crisis" of affordability.

"High house prices are already having a disastrous effect on local communities. People are unable to find a home in the area they grew up," Mr Orr said.

"Over the next five years we'll see home ownership being pushed further out of the reach of middle earners and even those on relatively high incomes," he added.

The Federation, which sponsored the OEF report, added that about 80,000 extra new homes needed to be built each year to boost supply and avert a dramatic rise in house prices.

However, the OEF's prediction goes against many other housing market forecasts.

The Halifax and Nationwide have both said that house price growth will be modest over the medium term, while research group Capital Economics has said that it expects prices to fall later in 2006.