CML responds to HIPs consultation

In its response to the government's latest consultation on home information packs (HIPs), the Council of Mortgage Lenders calls for the implementation of HIPs to be postponed until full evidence from research and area trials is available, on which an informed decision about the likely effectiveness of HIPs can be based.

This latest consultation, launched on 25 January, set out proposals to:

issue government guidance to local authorities to speed up the provision of searches;

provide a six-month transitional period after HIPs are introduced during which properties can be marketed without searches as long as these have been commissioned; and

explore measures to link energy performance certificates with incentives to encourage energy efficiency in the housing market.

Overall, the CML believes the government has been slow to recognise the problems with local authority searches (despite repeated representations on this issue over a period of some years). These problems are not new and should have been resolved well before HIPs were introduced.

The CML also believes that the HIPs timetable increasingly lacks credibility, with proposals for change still being made less than four months before full implementation, and without proper testing. In particular, the CML is concerned that:

the baseline research published in January does not provide sufficient evidence to justify

the current proposals for HIPs, and regulatory impact assessments will not be published until late March, far too late for proper scrutiny before implementation on 1 June;

the HIP approach "gold-plates" the requirements of the European Directive for the delivery of energy performance certificates (EPCs);

there may not be enough energy assessors on 1 June, which will cause market disruption if people cannot market their properties without an EPC; and

take-up of the home condition report in the area trials has been only 60% so far, even with the government funding the cost, leaving serious questions about their likely level of take-up when consumers have to foot the bill for them.

The CML remains interested in exploring the possibilities for "green" mortgages. However, at present there is no standard definition of a green mortgage. Other incentives for people to make energy efficiency improvements - such as council tax rebates for energy-saving measures, and readily available EPCs at all points during home-ownership - are much more likely to encourage consumers to take positive energy-saving action.

CML head of policy Jackie Bennett commented:

"No-one would dispute that the house-buying process is slow in the UK and could usefully be speeded up to benefit consumers. But there is no clear evidence that HIPs will solve the problems.

"Incentives to make homes more energy-efficient are desirable, but again it is unproven whether including energy performance certificates within the home information pack will result in consumers taking energy-saving measures.

"This close to the implementation date, there are still far too many unknowns about the potential market impacts. We call on the government to postpone the introduction of HIPs until they have been properly trialled and reviewed."