Industry News

In order to ensure that people selling their homes continue to make an Energy Performance Certificate available to prospective buyers, we (the Government) have also laid before Parliament the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2010 which introduce a number of new requirements including:

- a new duty on the seller to secure that an energy performance certificate (EPC) has been commissioned before marketing of the property commences where no such certificate is already available

- an EPC has been commissioned when a Domestic Energy Assessor has been instructed to prepare the EPC and the EPC has either been paid for or has given a clear undertaking to pay for it

- a new duty on the person acting on behalf of the seller to be satisfied that an EPC has been commissioned before commencing marketing
a new duty on both the seller and a person acting on their behalf to make reasonable efforts to secure an EPC within 28 days

- all of the new duties carry fixed penalties where somebody fails in the duty conferred on them by the new regulations

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Government to suspend HIPs
The Negotiator - 20th May 2010

The government will suspend Home Information Packs with effect from tomorrow night [May 21], which means that vendors will no longer be forced to instruct a pack before being able to market their properties.

Speaking at a press conference this morning, Secretary of State for Communities and Local Government, Eric Pickles, says: "This useless, pointless and entirely unnecessary piece of legislation has slowed down the housing market and has caused unnecessary problems, so I have now signed an order that suspends HIPS effectively from the 21st of this month.

"We will consult and seek legislation to eventually abolish the pack. It will now be possible to put your house on the market without the necessity of having this wholly unnecessary and pointless document."

Pickles says he has made the announcement today to minimise the impact on an already-fragile housing market.

He adds: "We would much prefer people to to use the money they would have otherwise have spent on HIPs, to go down to Homebase or B&Q, to buy some paint, get some shelving, maybe go to a place where they can get some white goods, and to do something useful for the economy and something useful for their homes."

Speaking at the conference, the newly-appointed housing minister, Grant Shapps, says: "After just one week of being in office, to have signed the statutory instrument today means that home sellers will get an immediate relief.

"But they will still need to complete an Energy Performance Certificate because we take greening up homes very seriously. We think it's one of the most important ways to reduce CO2. We can cut down on the 27% of CO2 that is emitted from our homes."

He adds: "This is great opportunity. From this weekend, for the first time in years, people can go out and put their house on the market without having to shell out hundreds of pounds, and I know that that will welcomed throughout the country."

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HIPs are history: Pickles suspends Home Information Packs with immediate effect
Communities and Local Government Department 20th May 2010

In an important step at a point of fragile recovery in the housing market, Communities Secretary Eric Pickles and Housing Minister Grant Shapps today announced that with immediate effect, they are suspending the requirement for homeowners to provide a Home Information Pack (HIP) when selling their homes.

Mr Pickles today laid an Order suspending HIPs with immediate effect, pending primary legislation for a permanent abolition. The Secretary of State has taken this swift action in order to avoid uncertainty and prevent a slump in an already fragile housing market. Today's announcement sends a clear message of encouragement to people thinking of selling their home that they can put it on the market with less cost and hassle.

HIPs are currently holding back the housing market because sellers are having to fork-out extra cash, sometimes hundreds of pounds, just to be able to put their home up for sale. Suspending HIPs will reduce the cost of selling a home, remove a layer of regulation from the process and provide a welcome help to the housing market during the recovery. It will also mean a saving for consumers to the tune of £870m over ten years, giving sellers more money in their pocket to spend in the wider economy.

Mr Pickles and Mr Shapps also said that the Government is determined to help people reduce their energy bills, improve our energy security and tackle climate change by increasing the energy efficiency of their homes. Sellers will therefore still be required to commission, but won't need to have received, an EPC before marketing their property, and the Government will consider how the EPC can play its part in the new drive for a low carbon and eco-friendly economy.

Eric Pickles said:

"The expensive and unnecessary Home Information Pack has increased the cost and hassle of selling homes and is stifling a fragile housing market.

"That's why I am taking emergency action to suspend the HIP, bringing down the cost of selling a home and removing unnecessary regulation from the home buying process.

"This swift and decisive action will send a strong message to the fragile housing market and prevent uncertainty for both home sellers and buyers.

"HIPs are history. This action will encourage sellers back into the market, and help the market as a whole and the economy recover."

Today's move is part of delivering a key manifesto comment made by both parties in the new coalition Government. It will mean that sellers will no longer be told they have to buy a HIP before putting their home on the market, but they will now have the choice to provide one if they want to.

Housing Minister Grant Shapps said:

"This is a great example of how this new Government is getting straight down to work by cutting away pointless red-tape that is strangling the market. Rather than shelling out hundreds of pounds for nothing in return we're stripping away bureaucracy and letting home owners sell their properties.

"But we're also showing our commitment to a greener housing market by keeping Energy Performance Certificates and making them more relevant in helping buyers make informed decisions on the energy costs of their new home."

Notes to editors

1. Photos and video footage of the announcement will be available at: www.communities.gov.uk/newsroom/

2. Home Information Packs (HIPs) put sellers of residential properties in England and Wales under a duty to provide a pack of standard information to potential buyers when marketing the property for sale.

3. The duty was introduced in three phases, depending on the size of the property, starting in August 2007 and ending in December 2007.

4. The duties relating to HIPs are set out in Part 5 of the Housing Act (sections 155 to 159). The Government has decided to suspend the HIP duties with immediate effect pending their outright abolition at the earliest opportunity.

5. The effect of this is to provide that sellers and estate agents are no longer required to have or to provide copies of HIPs with effect from 21 May 2010.

6. In order to ensure that people selling their homes continue to make an Energy Performance Certificate available to prospective buyers, we have also laid before Parliament the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2010 which introduce a number of new requirements including:

a new duty on the seller to secure that an energy performance certificate (EPC) has been commissioned before marketing of the property commences where no such certificate is already available
an EPC has been commissioned when a Domestic Energy Assessor has been instructed to prepare the EPC and the EPC has either been paid for or has given a clear undertaking to pay for it
a new duty on the person acting on behalf of the seller to be satisfied that an EPC has been commissioned before commencing marketing
a new duty on both the seller and a person acting on their behalf to make reasonable efforts to secure an EPC within 28 days
all of the new duties carry fixed penalties where somebody fails in the duty conferred on them by the new regulations

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Suspension of Home Information Packs : Questions and Answers
Communities and Local Government Department 20th May 2010

Please note that the Home Information Pack duties are suspended with immediate effect from 21 May 2010. This means that homes marketed for sale on or after this date will no longer require a Home Information Pack. However, Energy Performance Certificates are still required.

I am just about to put my house on the market. Do I still need a HIP?

The duty to have a HIP has been suspended from 21 May. This means homes put on the market on or after that date will no longer need a HIP. However, you will need to have commissioned, but not necessarily received an Energy Performance Certificate before marketing can start.

What do you mean by "commissioned an EPC"?

This means that a seller or a person acting on their behalf i.e.an estate agent must have instructed an accredited Energy Assessor to carry out an energy performance assessment.

Who or what is an Energy Assessor?

This is someone who is accredited (regulated) to provide energy assessments on buildings. HIP providers may be able to provide this service as long as they are accredited under scheme as an energy assessor.

I have ordered a HIP but have not received it yet - what should I do?

You should contact your HIP provider as soon as possible. The duty to have a HIP will be suspended on Friday 21 May and homes put on the market on or after that date will not need one, although you will still need to have commissioned but not necessarily received an Energy Performance Certificate before marketing can start.


My home is already on the market with a HIP - do I have to do anything?

No. Sellers still need to provide an EPC to potential buyers under separate legislation but that should be included in your HIP.


Will I still need an EPC after the suspension of HIPs?

Yes. Sellers will need to have or to have commissioned but not necessarily received an Energy Performance Certificate before marketing can start.


Whose duty is it to provide the EPC?

The duty to provide an EPC falls on the seller.


When does the EPC have to be provided?

An EPC has to be available or have been commissioned before a home can be marketed for sale. It should be provided to potential buyers at the earliest opportunity and before entering into a contract to sell the property.


What is the penalty for not providing an EPC - who will enforce it?

There is a fixed penalty of £200. Enforcement of these requirements is the responsibility of Trading Standards Officers. There are also penalties for not complying with the duty to commission an EPC before putting the property on the market.


How do I get a copy of the EPC done on my home - I never received a copy of my HIP?

If you have had a HIP prepared on your home, the person who prepared your HIP should be able to provide you with a copy of the EPC.


Can I reuse the EPC I received in the HIP when I come to sell my home if it (the EPC) is more than 3 years old?

Yes. Following the suspension of HIPs, all EPCs will be valid for 10 years.


Can I still rely on the HIP produced for the home I am buying?

Yes. There is no reason why a buyer cannot rely on the documents contained in the HIP.


I know there was a HIP produced for the house I am buying but the agent is now refusing to provide a copy - is that right?

Yes. There is no longer a duty on estate agents to provide a copy of the HIP to potential buyers.


Does this mean more expense for first time buyers?

First time buyers will still receive an energy performance certificate from the seller but will now have to commission their own searches. These will typically cost in the region of £150 which is a relatively small amount in the context of overall transaction costs.


Why hasn't the Government consulted on this, they promised to do so in opposition?

The manifestos of the current Government (Conservatives and Liberal Democrats) promised to abolish HIPs and will do so as soon as primary legislation is available.

But the Government believes it needs to act quickly to suspend HIPs to remove unnecessary cost and bureaucracy from the housing market.

Supporters of HIPs are of course free to put forward their views on the suspension in the period leading up to the Government seeking powers from Parliament to abolish HIPs.


I am a HIP provider - will I get compensation?

No. The present Government (Conservatives and Liberal Democrats) have consistently opposed the introduction of HIPs and promised to abolish them in their respective manifestos.

Important to note that only requirement to provide a HIP is suspended. Sellers are free to choose to provide information to buyers on a voluntary basis and HIP providers can offer such products.


Thousands of people involved in the production of HIPs will now lose their jobs?

It is not good enough to carry on with a policy that is both unnecessary and costly, purely on the basis of providing job security. HIPs are not providing value for money for sellers or for buyers, so we should not continue burden to the market with this extra layer of bureaucracy.

HIP providers could still have a part to play in the housing market offering as buyers and sellers will still require Energy Performance Certificates (EPCs), evidence of title and local searches.


I am a Home Inspector and abolishing HIPs means that there is no possibility of using my qualifications?

There is work available to Home Inspectors who are accredited energy assessors in producing domestic EPCs which continue to be required for rental properties and properties marketed for sale.


Will the Government compensate Home Inspectors?

We appreciate that abolition of HIPs would remove the option of compulsory Home Condition Reports. However, when the Government was in opposition they made it clear that they opposed HIPs and set out in their manifestos plans to abolish them if elected.


Will an EPC still be needed after the suspension of HIPs?

Yes. Sellers will need to have commissioned but not necessarily received an Energy Performance Certificate before marketing can start. Estate agents cannot start marketing until they are satisfied that an EPC is available or has been commissioned.

Agents will also have to include energy information in written particulars, as was the case before the suspension of HIPs. They must do so as soon as the energy information becomes available.


Who will be responsible for providing the EPC?

The duty to provide an EPC falls on either the seller, in the case of a building being sold, or the landlord, in the case of a building being rented. In the case of new buildings the duty to provide an EPC falls on the builder.


When does the EPC have to be provided?

An EPC has to be made available at the earliest opportunity and, in any event, no later than exchange of contracts. As soon as the EPC is obtained the energy rating or the EPC must be included with any written particulars.


Where is the legislation on EPCs contained?

The legislation is contained in the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007 (as amended by the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2010).


What are the penalties for non-compliance?

The penalty for not ensuring that an EPC is available or has been commissioned and failing to include energy information in written particulars is £200. The enforcement of these requirements is the responsibility of Trading Standards Officers.


How long will the EPC be valid for if it is not part of a HIP?

All EPCs for all buildings are valid for 10 years from the date that they are prepared.


What about the requirement to include energy information in written particulars?

The duty to include energy information in written particulars has been retained. It arises once an EPC has been obtained.


What if the EPC is not available when I prepare the written particulars?

Written particulars can still be prepared and made available but the energy information should be added to the written particulars as soon as it is available.


Is there a time limit on this?

The seller and estate agent must use all reasonable efforts to ensure that the EPC is available within 28 days of the property going on the market.


How long will the HIP suspension last - why don't you just abolish them outright?

Outright abolition will need primary legislation and we will do that as soon as practicable.


Why not just suspend HIPs and leave it at that?

The Government is committed to implementing its policy to abolish HIPs. The power to suspend is therefore an interim measure.


Will estate agents have any HIP duties once they are suspended?

No but there will be duties under the EPB Regulations for agents to ensure that an EPC has been commissioned before marketing starts and to include the rating in written particulars when available.


Am I still obliged to provide a copy of the HIP?

No but there is no reason not to do so if it improves the chances of a successful sale. The seller will still have to provide a copy of the EPC to potential buyers at the earliest opportunity and in any event before exchange of contracts.


I received a request for a copy of the HIP before the suspension date - am I still obliged to provide it?

No but see answer to previous question.


Can buyers still rely on a HIP after the suspension date?

Yes. If the HIP was compliant with the regulations there is no reason why a buyer should not be able to trust it.


Will estate agents still be liable for breaches that occurred before HIPs were suspended?

Yes. The suspension of the duties is not retrospective. However, it will be for enforcement authorities to decide whether to pursue the matter.


Can personal search companies go back to using insurance in their searches when they can't get information from local authorities?

The rules on the content of searches only applied to searches in the HIP and will not apply to searches provided in other circumstances.


Will the CLG be providing guidance on the effect of these changes?

Yes, the CLG website and others (DirectGov & Business Link) will be updated as soon as possible.


There is evidence that HIPs were beginning to work - why not try and improve them rather that abolish them altogether? And where is the evidence that HIPs were damaging the market?

The election manifestos were clear that if elected, the Conservative Party and Liberal Democrat parties would abolish the HIP.

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