HIP's are History - Long Live EPC's!

The government today announced that it is suspending Home Information Pack's (HIPs) for homes sellers with immediate effect.

“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.” Source: Communities.gov.uk

Delivered by Labour housing minister Ruth Kelly, in 2007, HIPs were intended to streamline the house selling process, by requiring sellers to provide conveyancing information when properties are first put up for sale. Paid for by sellers, they contain property information, title deeds and local searches.

However, from the off, the packs drew criticism. Some have suggested that they lack vital elements, such as structural surveys. Meanwhile estate agents, and industry figureheads such as Kirstie Allsop, have cited the £100-£400 upfront fee as deterring house sellers from testing the market, and in effect, contributing to the stagnation of the housing market. Seemingly, many are painting HIPs as a scapegoat for the market's woes. Whether their claims are verifiable, remains to be seen, especially given number of factors contributing to the volatility of the housing market over the last three yeas.

Whilst today's news has been warmly received in some quarters of the housing industry, many in the HIP industry feel that little thought has been given to their livelihoods and clients.

The move was not unexpected, as both the Lib Dems and Conservatives have made no secret of their opposition to HIPs. However, what has surprised many in the HIP industry, is the speed with which the suspension will come into affect. Homes Minister Grant Shapps, had previously promised a 100 day consultation period to decide the future of HIPs. This would have given the HIP industry time to wind down or adjust the focus of their operations.

The eradication of HIPs, could see the first major job loses under the new coalition government. The Association of Home Information Pack Providers (AHIPP) suggests that between 3,000 and 10,000 livelihoods are either directly or indirectly dependent on HIPs.

Paul Sailes of HIP-Consulant.co.uk, has contributed an industry insider's view of today's announcement:

It is sad day for both HIP providers and the home buying and selling process. The HIP gave a great vehicle to deliver upfront information about the property marketed for sale. Of course, it had areas which could have been improved, what doesn’t. It would not have been hard to amend if the various parties shared the desire to do so. It is a sad reflection on our property market that various groups facilitated targeted campaigns aimed at the HIPs demise rather than utilising their efforts to help improve the HIP and reform our antiquated home buying and selling process.

Unfortunately, I believe the Home Information Pack will go down in history as a failure due to actions of those with vested interests; that also includes those who were consistently pro-HIPs. The home buying and selling process requires reform and still does, never more so than yesterday if it is intended we revert back to pre-HIP days. HIPs were a good first step towards the ultimate goal of successful reform. I see no winners from the actions taken by the government today and it worth sparing a thought for those businesses, jobs and families who will be directly affected due to no fault of their own and will undoubtedly suffer.

The future for HIP providers?

One element of HIPs, the Energy Performance Certificates (EPCs) will remain. EPCs grade a home's energy efficiency on a scale of A-G ratings. Costing considerably less than HIPs, at around £60, the seller will be required to supply one within 28 days of putting the house on the market. Sources have suggested that EPC's will remain valid for up to 10 years. However, questions have already been raised about the quality and scope of EPC's. Whether EPCs can absorb the fallout from the HIP industry remains to be seen. What is certain is that the original need for a full report, which would produce a fairer market, free from gazumping and gazundering remains.

Update: 21/05/10 Today Countrywide has announced that it is to reimburses clients for HIPs. Could this be another thorn in HIP provider's sides, as clients call for refunds for an effectively defunct product?

Barratt to deliver the UK's first Code for Sustainable Homes Level 6 houses!

Good news for those in the market for an affordable, attractive and energy efficient home. Towards the end of this year, UK home builder, Barratt Homes will be offering the first Code for Sustainable Homes* Level 6 rated sustainable houses to enter the mass market.

This news follows the agreement last summer of contractual commitments between Barratt Developments PLC, the Homes and Communities Agency (HCA) and South Gloucestershire Council.

After 2 years of testing at it’s prototype Green House site, Barrat began large scale construction of its eco-friendly designs at Hanham Hall near Bristol, in November of last year. Upon their completion, Barratt intends to gradually pass down these eco innovations, to the rest of its product range.

Fortunately, many of the improvements being implemented can easily be applied to existing housing stock. In recognition of the innovative nature of the development, the government has provided an additional £0.8m funding, so that the on-site biomass CHP plant's heat network can be expanded. Originally designed to provide energy to the development's 195 homes; it is hoped that the CHP which utilises renewable fuel to generate relatively clean energy will also be able to supply on-site amenities.

In order to fully satisfy the requirements of the Code for Sustainable Homes Level 6, attention is also being paid to external factors. For instance, it is hoped that the provision of gardens and greenhouses, will encourage residents to produce more of their own food. Similarly, the provision of pedestrian routes to nearby amenities are aimed at reducing reliance on motor transport.

Current government targets require that all homes built from 2016 onwards, meet Level 6 of the Code for Sustainable Homes. Although many specialists and self builds' have already attained this level, Barratt aims to be the first mainstream developer to offer "zero carbon" homes to the public on a wide scale. Given the bleak economic climate, reaching this milestone, marks real progress by the private housing industry in meeting sustainable targets.

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Public Sector Update

The public sector has also been making advancements in delivering sustainably housing. For instance, North Kesteven Council in Waddington, Lincolnshire is drawing close to completing it's first batch of Code for Sustainable Level 4 homes. The homes have drawn attention from the media, for their use of renewable resources such as straw (see above) to provide thermal insulation whilst also reducing their overall carbon footprint.

In a speech earlier this month, chief executive of the National Housing Federation, David Orr summarised the public housing sector's commitment to sustainability. Orr revealed that whilst 92% of housing association new homes are already achieving minimum standards set for CO2 emissions, only 2% of new homes built by private developers are meeting comparative targets.

If Orr's figures are reliable, then they cast doubt over the present commitment of private developers' to meet Government targets for 2013 and 2016. However, housing news portal 24dash.com reports that a Department for Communities and Local Government spokeswoman defended private builders, saying: "The fact is that all homes will be required to be zero carbon by 2016 and we are introducing legally binding regulations on the private sector.”

She added: "Over 150 organisations, including house-builders, have now put their names to the 2016 Commitment to work together to build 240,000 new zero carbon homes a year within a decade. It's ambitious, but it can and will be done."



With an election hanging overhead, it will be interesting to see whether this issue receives any attention in the ensuing campaigns. That said, regardless of which party takes office, the long-term challenges posed by a rapidly growing population, the implementation of tough environmental targets and funding cuts will have to be addressed if the UK is to maintain upwards standards of living.

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* The Code for Sustainable Homes estimates a new home’s ecological impact, against nine measures of sustainable design. Categories include energy & water consumption, carbon dioxide emissions as well as consideration for the house's impact on the surrounding environment.

Barratt Homes at NewHomesForSale

Structural Design Codes Overhauled - New EU Legislation

Arguably, one of the most important changes in recent history to construction standards comes into effect on 31 March 2010. The introduction "Eurocodes" will see The British Standards Institution (BSI) withdraw 54 British Standards for the design of buildings and civil engineering structures. Detailed overviews of the codes can be found in the sources section at the bottom of this article.

The Eurocodes will form a suite of unilateral European standards which cover the fundamentals of structural design. Included within the codes, are specific guidelines for the design of aluminum and masonry structures, concrete, composite steel and concrete, steel, timber, actions on structures, the design of structures to withstand earthquakes and geotechnical design. Consequently, these codes will have an immediate and far reaching effects on the UK construction industry.

Many leading engineers view them as the most technologically advanced standards in the world, which will provide a set of principles which offer far more versatility than previous standards. Their implementation across the European Union, will deliver a unified approach to design, whilst at the same time, will also accommodate the application of country specific construction requirements such as earthquake resistance, and climatic variations such as wind loads. Furthermore, many hope that Eurocodes will also catalyse easier access to the construction market.

In the UK, Eurocodes will be incorporated into Public Contracts Regulations, which currently determine the necessary standards for public buildings and structural projects. Many analysts have voiced concern over the delay in amending the Building Regulations Approved Document A, which will not include reference to the Eurocodes until 2013. However, the Department of Communities and Local Government (DCLG) has addressed the matter in a circular letter issued to Building Control Offices, in which it stated that "we would not expect this rescheduling [of the Building Regulations Approved Document A] to affect or deter the take up of the new national standards" (i.e. the Eurocodes).

Mike Low, Director, BSI Standards commented on the impending change: "The Eurocodes have evolved over 20 years, and because British engineers and BSI have played a key role in their development, I am confident that they will both strengthen the professions in the industry as well as our delivery of quality construction. Eurocodes will also provide an excellent foundation for developing international leadership here in the UK in creating the Smart & Sustainable Built Environment."

The BSI, along with affilliate key professional and trade associations, is organising a range of activities and events to smooth out the transition from the old British Standards to the new Eurocodes. Further details, including FAQs on the transition, are available from www.eurocodes.co.u, www.bsigroup.com/eurocodes and www.eurocodes.jrc.ec.europa.eu/.

Sources:

Highways Agency's involvement in the implementation of Eurocodes: Link | eurocode-resources.com: Link | Decoding the Eurocodes: Link | Department of Communities and Local Government (DCLG) - Implementation of Structural Eurocodes in the UK: PDF

£83 million for Phase 2 of Kickstart Housing Regeneration Poject

Housing Minister John Healey, has announced that £83 million of recently secured funding will enable work to restart on the construction of over 5,500 new homes, which had previously been stalled by the recession.

The Department for Communities and Local Government announced the initial batch of funding allocations for the next round of its Kickstart programme. This will allow work on previosuly mothballed key projects to recommence. This is a positive sign of recovery for builders and planner alike.

Details of the 87 projects have been uploaded to Bing mapping service (free). This provides an rough guide of the location and a brief snippet about the individual projects. This is all set out onto an interactive map (click here).


A map of the first round of allocations from Kickstart is also available here.

The West Midlands, has done particularly well, and 16 schemes will receive funding, making it the region with the greatest number of successful projects. Conversely, in the North-East, only two schemes will receive funding from Kickstart’s second round, making it the region with the least successful projects.

Elsewhere, housebuilder Morris Homes will receive £768,000 of funding to build 69 homes on a former college site near to Pride Park football ground in Derby. Meanwhile, Housebuilder Barratt, will receive £1.1 million of funding to build 50 affordable homes in Stockton-on-Tees.

Whilst the provision of funding is undoubtedly a positive sign, which should go some way to correcting the imbalance between supply and demand, it remains to be seen whether the Kickstart initiative can learn from the first phase's failings.

Last year it was reported almost half of the housing schemes which received funding in the first round of the Kickstart scheme had previously been rated "poor" by design watchdog the Commission for Architecture and the Built Environment.


HCA's review of Kickstart round 1 - PDF (75 KB)

A summary of approved schemes by region - PDF (62 KB)

The Pay As You Save - Eco Loans

Government plans for "green loans" to help home owners make their homes more energy efficient by installing technology such as insulation and solar panels were announced by the Energy and Climate Change Secretary Ed Miliband.

The Warm Homes, Greener Homes scheme will see the loans tied to the house where the eco-measures are applied, so they can be repaid over a long enough period that the savings on energy costs outweigh the payback instalments.

The "Pay As You Save" (catchy?!) programme aims to ease people past the financial barriers - such as high upfront costs - faced by people trying to make their homes energy efficient and more greener.

It forms a key part of the government's strategy to cut greenhouse gas emissions from housing by 29% by 2020. With around a quarter of UK emissions originating from energy used in homes, this is a crucial target. The Government says, that the scheme will also reduce energy bills for householders and boost jobs.

Some 65,000 jobs could be supported by the green homes industry by 2020, ranging from skilled installation and manufacturing of technology including small scale renewables, to providing advice on home and business energy strategies. In the short term, householders should see reduced energy bills. Installation measures such as solid wall insulation, may net energy cost savings in the region of £380 a year!

The strategy will be implemented in three stages:

• To insulate 6 million homes by the end of 2011

• To have insulated all practical lofts and cavity walls by 2015

• To have offered up to 7 million eco-upgrades by 2020

A campaign promoting the use of Energy Performance Certificates, will encourage home owners to add value to their homes, by installing energy efficient adjustments and improvements. Home-owners will even be able to undertake a "virtual green makeover" on their properties online before committing.

To promote the scheme at the local level, an additional £2.5 million will go to establishing a network of lived-in green show homes across the UK, to demonstrate to people what a refurbished home is like, and what technologies are available to improve houses.

Ed Miliband said: "The Warm Homes, Greener Homes strategy will remove the deterrent of upfront costs and reduce the hassle of moving to greener living."

"Making homes more energy-efficient will help protect people from upward pressure on bills, tackle climate change and make us less reliant on imported energy."

"New 'pay as you save' green finance, a new alliance between energy companies and local authorities to help people in their communities, as well as moves to encourage landlords to stop ignoring energy wastage in their properties, will help deliver the radical transformation that's necessary."


A cynical observer might view this initiative as simply more electioneering, in the run up to the general election. Another dampener on proceedings is the context in which this announcement is made; the UK economy is in a dire state, and thus the task of persuading home owners to take out yet more debt is an incredibly difficult prospect.


Useful Links:

Department of Energy and Climate Change (Docs: 1 | 2 )

The Guardian - Are we really going to let ourselves be duped into this solar panel rip-off?
The Independent - Government plans 'green loans' to make homes more efficient

Persimmon sees signs of improvement

Persimmon back in black

Persimmon, the housebuilder, reported a return to full-year pre-tax profit, helped by a one-off gain from the revaluation of its land values.

Persimmon, the UK's largest housebuilder by market value, plans to create 90 new sites after trading conditions showed further signs of improvement. Some of the sites will be facilitated by Government grant funding for affordable homes.

Persimmon reported a 7% rise in sales since the beginning of 2010 and said the sales rate per site was up by a fifth due to the company operating from fewer locations than a year earlier.

Annual sales fell to £1.42bn in 2009, compared with £1.76bn a year earlier.

However, the company generated a pre-tax profit of £77.7m, compared with a £780m loss in 2008, thanks in large part to a write-up of £74.8m based on a re-evaluation of the value of its land assets.

The company, which is one of the less indebted UK housebuilders, generated £356.8m of free cash flow in 2009, compared with £239.2m in the previous year.

This helped it to reduce net borrowings from £600.7m in 2008 to £267.5m last year, easily within the company’s debt facilities of £1bn, arranged in March last year.

Persimmon also opened 90 new sites during the year, leaving it with land holdings of 60,454 plots at the end of 2009, which according to current build rates should provide six years’ supply.

John White, chairman, said: “Our cash generation and cost control have placed the business in a strong position both operationally and financially for a recovering market.

“Prices have held firm since the beginning of the year and we remain focused on improving our operating margins and to profitably grow the business.”

However, the company added: "It is too early to make a precise forecast about the housing market, particularly in an election year, and we will remain cautious in our investment decisions."

The company reiterated its previous announcement that it does not intend to pay a dividend for 2009, following its strategy of conserving cash in the business to strengthen the balance sheet.


Persimmon shares, which have risen more than 18 per cent in the last year, rose 6.9p or 1.7 per cent in early trading on Tuesday to 407½p.

(Source)