Helping buyers to make their homes greener and the market more efficient

Published	14 December 2007

From today all homebuyers will benefit from A-G energy ratings which will help them to cut their fuel bills and carbon emissions and first time buyers will see their upfront costs drop, with the completion of the roll-out of Home Information Packs and Energy Performance Certificates.

Buyers whose homes score poor energy ratings of F or G (currently around one-fifth of all homes) will receive an offer of a discount or free help with energy efficiency measures from the Green Homes Service which will be established, helping to save hundreds of pounds off fuel bills.

Before completing the roll out, the Government commissioned independent economic research and advice to analyse the impact of HIPs for three and four bedroom homes and its interaction with current market conditions.

The report found no evidence of any impact on transactions, prices or mortgages, and the advice concluded that there were strong arguments for rolling out as planned, and further delay could cause greater uncertainties.

HIPs benefit buyers, particularly first time buyers, who get important information for free, such as searches, which previously they would have had to pay for. They have also helped cut the cost of searches, with more than 85 local authorities reducing their prices. By providing information at the beginning of the process, HIPs can help to cut delays, and increase transparency and competition.

The implementation of HIPs so far shows the roll out has gone smoothly.

HIPs are taking on average 7 to 10 days to prepare
The majority of property, and drainage and water searches, are being delivered promptly within 5 days
EPCs are being prepared on average within 2 to 4 days
The average cost of a pack is £300 to £350 - costs which apart from the new information included in the EPC are already part of the home buying and selling process.

Housing Minister Yvette Cooper said:

"All homebuyers should be able to get an energy rating for their new home as well as useful advice on how to cut fuel bills and carbon emissions too. Those buyers with low rated homes will also be able to get grants to help put in things like loft insulation or a new boiler. HIPs will also help buyers, especially first time buyers, by giving them important information about their homes they previously had to pay for."

The Government published an independent report by Europe Economics on the impact of HIPs on the market, on November 22. Their report finds no evidence of any impact on transactions or prices, although there is a predicted short term impact on new listings as sellers change the timings of their listings. The report concludes that this impact on listings is short lived and the impact on the market is marginal compared to the wider factors.

The Government also asked Europe Economics and Peter Williams of the National Housing and Planning Advice Unit (NHPAU) to consider whether changing housing market conditions meant we should change the approach to completing the roll out. They concluded that were strong arguments for rolling out as planned, and further delay could cause greater uncertainties

The introduction of HIPs is part of a wider programme of reforms to home buying and selling including e-conveyancing and better redress, which aims to provide consumers with a clearer, more transparent and effective service, with better value for money, benefiting all potential homebuyers and helping in tackling climate change.

The Government will continue to actively monitor the rollout of HIPs and energy performance certificates and the home buying and selling process to ensure we can respond where further improvements are needed.

Notes to editors

Background on European Economics report

1. The Europe Economics report, HIPs - Housing Market Analysis, conclusions state that:

"... HIPs may have had an additional modest-but-material effect on listings activity but no discernable impact on transactions, mortgages, or prices."

"Going forward, with further potentially even more significant factors adding to pressures upon the market - such as unwinding of fixed rate mortgages, the credit crunch and a slowing economy, the effects of HIPS (if any) on prices, mortgages and transactions is likely to be an even more limited proportion of the total impact, and even less possible in practice to measure separately - it will just be to small to notice..."

"With 60 per cent of the market already covered by HIPS and with a degree of uncertainty regarding the future house price trends there are strong arguments for putting the whole market under the same regime, particularly in the context of more testing and uncertain market conditions."

2. Other measures being take forward to promote interests of the consumer and ensure the smooth implementation continues include;

Plans to publish guidance for local authorities and personal searchers to help them speed up searches and deliver a fairer deal for consumers:
A consultation on proposals for a complementary searches charging regime;
An extension of the temporary First Day Marketing provisions for an additional 5 months to allow for full flexibility (from 1st January to 1st June 2008);
Temporarily amending the HIP Regulations until 1 June 2008. During this time HIPs will only need to include the Lease, while the HIP will authorise other leasehold documents;
Commissioning Ted Beardsall, Deputy Chief Executive of the Land Registry - and member of our Home Buying and Selling Stakeholder Panel - to advise on what else can be done to improve the search process and the provision of leasehold information.