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Packing a punch

  • 12/11/2007
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The home information pack industry has had a difficult start but, warns Paul Robertson, there is more controversy on the way

Recent controversy over the advertising of domestic energy assessors’ training courses has once again pushed home information packs (HIPs) into the limelight.

The Advertising Standards Authority has confirmed it has eight complaints over training companies claiming newly qualified energy assessors can expect to earn up to £50,000 per year. This is regarded as a ludicrous figure by many in the industry.

Dominic Toller, director of marketing and new business at HIP provider LMS, which employs around 140 energy assessors, says: “We have been flabbergasted at the expectations the market had for these people’s likely earnings. It is a qualification that takes a few months to study for and costs a couple of thousand pounds. It is a good job, but does not warrant that level of income. The basic salary is in the £20,000 region plus incentive bonuses.”

HIPs are destined to stay in the news in the run up to Christmas, with an expectation of a roll out to the whole of the market and the expiry of same-day marketing agreements at the end of the year. This is all given extra tension by the Government’s lack of clarity about its plans.

Mike Ockenden, director general of the Association of Home Information Pack Providers (AHIPP), hopes the packs will eventually roll out fully. He says: “I expect to see the market live for all properties by the end of the year, and have heard nothing to contradict that from the Department of Communities and Local Government in my meetings with it.”

Toller is also convinced, noting the Government is waiting for data out in mid-November. He says: “We are expecting the data to say that the roll-out so far did not create instability in the housing market. There are plenty of concerns in the housing market, but none are down to HIPs.

“Once the Government has this established, it will roll out to the rest of the market. It is then we will see the benefit of HIPs. We are covering about 60% of the market now, so we are expecting a substantial increase in business.”

However, the roll-out will not necessarily flood the market with work immediately. Greg Elliot, director of Warmfront Energy Assessors, believes a roll-out to the whole of the market by the end of the year would not cause current volumes to increase. “We would expect a stabilisation of current volumes as the market normally goes flat in December. The extra work would fill that gap then ramp up slowly in the New Year.”

Progressive implementation

Delays in full implementation across the whole market have had benefits. Toller says: “Actually, the slow phasing-in of HIPs has not been a bad thing – as problems have arisen they have been dealt with without upsetting the entire market. HIPs are very robust now.

“When we first started, some of the local authorities were taking weeks before they let the search companies turn searches around. Now we complete the vast majority in under ten days. This is huge progress but there is still a way to go. HIPs are not a difficult thing to pull together. The challenge is to do hundreds, if not thousands, a day, while coping with fluctuations in market capacity.”

The removal of first-day marketing rules will be another boost for the market. At present a home owner requiring a HIP needs to have instructed the HIP and either paid or agreed payment terms. From the New Year, in order to put a property on the market, owners must have instructed the searches and asked for the lease documents, but have completed and paid for all the rest of the HIP.

However, once again the Government has not divulged its plans. Ockenden explains: “The transitional arrangements expire on 31 December. The Government has an option to either let them expire or extend them. We would much prefer that the Government let arrangements expire and allow HIPs to do their job, but it is likely the Government will extend them for a time to allow the one and two-bedroom HIPs market to settle down.”

Nevertheless, the speed at which HIPs are provided will become paramount in getting a property to market. Some believe this will be a catalyst for market consolidation. Some smaller HIP providers may struggle to turn HIPs around in four to five working days. Toller says: “They will start losing instructions to more automated competition.”

However, Elliot disagrees. “I think the industry is ready and has anticipated these events. When we set up we did not look at the current market but the one we expect to see in January. There will be an increase in work once same-day marketing agreements lapse,” he says.

That said, he too expects consolidation as a result of financial pressure due to the late run out of HIPs. He says: “We will see consolidation on more than one level. Some firms are under pressure financially from June, when HIPs failed to launch and from August when they did not roll out to the whole of the market.

“Aspects of HIPs, such as the energy performance certificate, may come down in price, which will mean that a lot of firms are going to find the next six to eight months hard going.”

While it can be seen as natural that in any new market there is a shaking-out, Ockenden is certain that a provider of any size offering a good product efficiently will thrive. He says: “This market is not geared towards the big players as the technology is available for little money for anyone to use. High street solicitors, for example, can use the Law Society’s software.”

Nor will the New Year herald a lower profile for HIPs. Ockenden concludes: “Once this has all come to pass then we will commence, with a vengeance, the campaign to get home condition reports reinstated into HIPs.” n

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