The government’s announcement of further details of the implementation of Home Information Packs was widely welcomed by the residential property and mortgage industry.
Packs were a key element of the 2004 Housing Act and are due to become mandatory for all home sellers from 2007. The Housing Minister, Yvette Cooper, giving an update before the summer recess, confirmed the timetable and announced further details of the implementation approach.
Critical to the implementation is ensuring a sufficient number of Home Inspectors can be trained by 2007. Agreement has now been reached with the industry on the qualification for Home Inspectors and on the way in which current surveyors can become suitably qualified quickly and effectively.
In addition, a dry run will take place during 2006 to involve tracking a random sample of transactions from the point of marketing to completion. Mandatory implementation has been confirmed for early 2007.
Key to the success of the reforms will be their smooth implementation by the estate agency industry. Jane Pridgeon, Chairperson of Halifax Estate Agency, said “Estate agents are likely to be in the forefront of explaining the need for and benefits of the Packs to their prospective sellers. We are getting ready for what will be the biggest change for the estate agency industry in a generation”.
The country’s four largest estate agency groups Countrywide, Connells/Sequence, Halifax Estate Agents, and Your Move all welcomed the Minister’s update. According to Simon Embley, Managing Director of Your Move, “the Minister’s update brings added certainty to the whole implementation process and is to be welcomed”.
Several of the largest mortgage lenders, including Halifax, Nationwide and Skipton, also commented on the clarity created by the announcement. "We support any move to improve the consumer's experience and speed up the house buying process. Consumers want more certainty when moving home and the new packs should help in that respect" said Philip Williamson, Chief Executive of Nationwide Building Society.
They were joined in their support by key players likely to emerge as major providers of Packs to the estate agency industry, such as Rightmove, already the UK’s number one property website.
Rightmove has already announced an investment of £15m in its technology infrastructure to provide HIPs, building on its £10m investment in the Rightmove.co.uk property portal. “We welcome the flexible and commercial approach the government is taking to the design and implementation of the infrastructure needed for the reforms to work” said Ed Williams, Rightmove’s Group MD. “The revised approach of insisting that individual providers of Reports be responsible for maintaining their own database of Home Condition Reports, with the government able to access them as required, makes absolute sense. Rightmove expects to be able to provide the industry with a database solution open to all, whether or not the Report is going into a Rightmove Pack.”
There was a particular welcome from the largest surveying businesses. Concerns have been expressed about whether there will be sufficient qualified Home Inspectors to produce the Home Condition Reports which form a major element of the Pack.
Chris Shaw, MD of the UK’s largest surveyors said “Countrywide Surveyors welcomes the greater clarity on qualification routes and standards to be met for both existing practitioners and those wishing to enter the industry. We are confident these changes will deliver sufficient numbers although, practitioners now need to commit to the process and accelerate their accreditation to ensure that the profession is ready in good time.”
Stephen Shipperley, MD of the country’s second largest estate agency, likely to require 100,000 packs for its customers each year, commented “For some time, the question for the industry has not been whether Packs would be introduced, but when and how. This announcement is an important interim step before the detailed regulations covering the contents of the Pack are published in the autumn.”
“Every estate agent and every surveyor now needs to have a plan for their business” said Paul Creffield, MD of Rightmove’s HIPs business. “Given the schedule, unless potential HIPs providers have announced their detailed solution and are well down the route of implementing them, they just won’t be able to meet the government’s dates. Too many people have ignored this for far too long.”