08/02/2008 by Dave.

Paragon Mortgages, the UK’s largest specialist buy-to-let mortgage provider, has urged landlords to review the energy efficiency of their properties ahead of new energy performance rules being introduced later this year. 

From October 1 landlords will be required to make an Energy Performance Certificate (EPC) available to prospective tenants as part of the lettings process. The EPC, which is valid for 10 years, will rate a property’s energy performance and make recommendations about how to improve the energy efficiency of the property.

Although landlords are under no obligation to carry out any recommendations made, prospective tenants could use the EPC as one of the factors to determine which property they choose to rent.

The certificates have already been introduced into the home sales process and could play a valuable role in boosting energy efficiency across the housing sector when they are extended to the private rented sector.

John Heron, Paragon Mortgages managing director, says: ‘If two properties are of a similar standard and rent level, then the tenant is likely to choose the property with the better energy efficiency.

‘Landlords already provide high quality rental accommodation, but if they are looking to make improvements to the energy performance of a property, now is a good opportunity. Fortunately, there is financial help for landlords and they should take full advantage of the grants available to them.’

Landlords and tenants can access a range of grants to improve the energy efficiency of their homes. Schemes include:

The Landlord Energy Saving Allowance

The LESA was introduced by the Government in 2004 and allows private and corporate landlords who pay income tax to claim back up to £1,500 per property for the installation of energy saving measures, including loft, cavity wall, floor, hot water system and solid wall insulation, as well as draft proofing. The scheme applies per property, rather than per building, so a house converted into four flats would be able to claim up to £6,000. However, the allowance does not cover holiday lets or resident landlords.

To claim the relief, landlords must include the expenditure as a deduction in their self-assessment tax return. For more information, landlords should visit HM Revenue & Customs at www.hmrc.gov.uk.

Warm Front

Grants of up to £2,700 are available to tenants of private landlords if they are in receipt of certain benefits to make insulation and heating improvements to a property. The landlord doesn’t have to make any financial contribution, only give permission to their tenants for the work to be carried out on the property. The tenant must apply for the grant and a Warm Front assessor will visit the property to suggest which improvements should be made. People entitled to the grant include householders aged 60 or over in receipt of income support, council tax benefit, housing benefit, job seekers allowance or pension benefit, and householders with a child under 16 also in receipt of the same benefits. For a full list of the type of tenant eligible for the grant visit www.warmfront.co.uk. This scheme is only available for households in England.

Local council benefits and grants

Local authorities and councils in the UK offer a range of different grants and financial assistance to landlords to help them improve the energy performance of their property, but the level of assistance differs from council to council. To check what grants landlords are entitled to from their local authority, they should call the Energy Efficiency Advice Centre, a service funded by both the Government and the Energy Saving Trust, on 0800 512 012.

Energy Supplier Grants

Energy companies offer subsidised rates on insulation and certain grants to their customers. Many of these grants are available to customers that rent a property as well as homeowners, so tenants could be entitled to discounts on measures such as cavity and loft insulation. The Energy Saving Trust, www.energysavingtrust.org, has the full range of grants and subsidies available to energy customers.

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31/01/2008 by Dave.

The introduction of Home Information Packs (Hips) has helped to reduce speculative marketing, it has been claimed.

According to AA Legal Services, the mind of the seller is already focused before they put the property on the market meaning only genuine sellers enter the process.

James Molloy, product manager for AA Legal Services, said: “We hope that now only those who have a genuine, considered desire to sell their property enter the market at the front end, and Hips have undoubtedly reduced speculative marketing.”

Mr Molloy said that despite the view that speculative marketing keeps the market fluid, he felt a lack of commitment could be dangerous.

“Such lack of commitment has contributed to, in my view, an unacceptable level of aborted transactions in the pre-Hips era,” he explained.

“My view is that where we see a reduction in broken chains, a large contributing factor is the introduction of Hips,” said Mr Molloy.

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17/01/2008 by Dave.

The introduction of Home information packs (Hips) has raised awareness of the benefits of insulation, according to the National Insulation Association (NIA).

Hips come with a compulsory Energy Performance Certificate (EPC), allowing buyers to see how much it would cost to heat the property and according to the NIA, buyers are more likely to choose an energy efficient home that will cost less to heat.

“If you are faced with a choice of two properties and one is more energy efficient than the other, you are more likely to choose the one that is going to cost you less to heat and maintain,” said Neil Marshall, chief executive of the NIA.

The comments follow the news that npower, the UK’s fourth largest energy supplier, has increased both its gas and electricity prices.

According to the Energy Saving Trust, homes without loft insulation could lose as much as 15 per cent of their heating through the roof.

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30/11/2007 by Dave.

The Government has announced that Home Information Packs (HIPs) will be required for all properties being sold in England and Wales from December 14th. Since September, only properties with three or more bedrooms have required a HIP before they can be sold.

The Government claims that first time homebuyers will see their upfront costs drop and all home buyers will, for the first time, receive A-G green ratings for their properties, which will help cut fuel bills and carbon emissions.

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, as announced by the Prime Minister earlier this week.

House hunters will get detailed information about the energy efficiency of their home with a green rating of A-G, similar to consumer friendly fridge ratings, in an EPC.

Housing Minister Yvette Cooper said: “HIPs and EPCs are already helping consumers to save hundreds of pounds off their fuel bills and are cutting search costs too.

“All home buyers will be able to benefit from energy efficiency advice, with those receiving low green ratings of ‘F’ and ‘G’ especially targeted for support and grants to make improvements to cut their costs and carbon emissions.”

Early monitoring of the scheme shows 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.

Packs include: An energy performance certificate, local searches, guarantees for any work on the property, and copies of planning, listed building or building regulations consents.

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23/11/2007 by Dave.

With the Government having recently performed yet another U-turn when it comes to HIPs (Home Information Packs) - this time by extending the deadline requiring new build properties to have an Energy Performance Certificate to April 6th 2008 - a new survey from the National Association of Estate Agents (NAEA) shows just how contentious HIPs have become, given the record response rate to the survey from its members.

Members were asked in October to compare the market to the same time last year. The results showed that 83% of agents found that requests for market appraisals dropped with 9% of respondents finding a reduction of more than 50%.

When asked about the change in the number of instructions for 3 or more bedroom properties, 76% stated that they’d seen decreases in excess of 10% of which 46% had seen a drop in excess of 30%. This compares with a much smaller reduction for 1 or 2 bedroom properties with 37% of respondents finding a drop of more than 10%.

Peter Bolton King, Chief Executive of the NAEA, comments: “Clearly everyone accepts that there are a number of financial and economic factors that have caused the market to take a breather after 7 hectic years.

“However, these figures show that there is an anomaly between instructions on properties where a HIP is required and where one is not.”

Bolton King added that he’d heard of many examples where potential sellers had decided against putting their property up for sale because they didn’t want to risk wasting £300 or indeed much more, if they decided not to sell.

“It has been correctly stated previously that many sellers decided to ‘beat the HIP’ by marketing their property before August 1st 2007. It would therefore be reasonable to think that there would be a lull for a few months thereafter.”

When members were asked how available stock levels were year on year - 76% of the 1050 respondents stated that their stock was either the same or less.

“At this stage of the market cycle, with sales slowing and normally a traditional autumn bulge in instructions, it would be normal to expect stock levels to be significantly higher.

“The fact that only 24% are saying that this is the case should worry the Government as this is just not normal. This once again appears to show the adverse effect HIPs are having on the market, the lives of consumers and indeed the overall economy,” Bolton King added.

The survey then went on to ask the question of what should happen to HIPs next? It gave several options of ways to move forward including the full roll out of HIPs. However, only 6% felt that this was the right option with 76% stating that HIPs should be scrapped but Energy Performance Certificates should instead apply to all properties.

“Despite the fact that agents have now had an opportunity to work with HIPs it is clear that the vast majority of respondents do not believe that they add value to the process and are finding it hard to get purchasers to take interest in them.

“We feel very sorry for the many Domestic Energy Assessors who are waiting for the opportunity to earn a living,” Bolton King noted.

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15/10/2007 by Dave.

The public remain unconvinced by Home Information Packs (Hips) according to London & Country.

They believe most of the public do not understand what you actually get when purchasing a Hip.

A spokesperson for London & Country, said: “At the moment the jury is still very much out on Hips. Only time will tell.

“People were very aware that they needed them but there was an overall feeling of not having value for money.”

Research published in October stated that 62 per cent of people believed that Hips would not have an impact on how a home would sell.

“There is not an appreciation of the value of the Hips as yet. You were going to have to do the energy rating anyway, so getting it in the Hip could probably represent not too horrendous value,” she continued.

From September 10th 2007 all people selling a three-bedroom house and above had to provide a Hip.

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17/09/2007 by Dave.

Hips, which were launched in August and now extend to all properties with three or more bedrooms, are a collection of information that the homeowner must supply when selling their property.

However, a survey by Abbey Mortgages has found that four million people plan to market their home as a two-bedroom purchase to avoid the need for a Hip, with a popular choice being to disguise the third as a study.

The news may also be pertinent to home improvement loan customers thinking of renovating part of their house.

And while disguising a third bedroom may seem like an effective way to avoid the Hip requirement, head of mortgages at Abbey Nici Audhlam-Gardner explained why it is not such a good idea.

“By remarketing your home as a two-bedroom house with a study, you’ll become invisible to thousands of potential buyers that are searching online,” she said.

“You might also make your property seem overvalued.”

Hips were originally planned to become compulsory in June but this was later pushed back to August.

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11/09/2007 by Dave.

Those predicting the introduction of Home Information Packs (HIPs) would cause market confusion and disruption have some early indicators of seller behaviour in this month’s Rightmove House Price Index.

Measuring around 90% of property advertised through estate agents in England and Wales, the property website reports the average number of 4+ bedroom properties coming to the market per month in 2007 (between January and July) was 40,000. In the month following the August 1st HIP deadline, this fell to 23,400; a slump of 41%. And it’s showing no signs of an upturn, with last week being the lowest week of the year so far as just 4,159 4+ bedroom properties were added to the Rightmove site.

Miles Shipside, Commercial Director of Rightmove comments: “Whilst there was a surge of 4 bedders coming onto the market for just one week at the end of July, there has been a much greater dearth of them in the four weeks since.

“If this happens with the remainder of the phased introduction of HIPs, the concern will be that impulse sellers are being put off by the additional costs and hassle of a pack. Whilst it should all settle down with time, it will take longer as sellers are now facing the challenges of a cooling market and the highest interest rates for 6 years.”

The reduced number of 4+ bedroom properties coming onto the market has also depressed average national asking prices by 2.6% (£6,298). Although the largest monthly fall measured since January 2002, it’s largely a statistical anomaly caused by HIPs The annual rate of increase meanwhile has slipped from 12.8% to 9.6%.

Aside from the market distortions of HIPs, there is additional evidence of the housing market slowdown being especially tough through the summer months - the 121,000 properties coming onto the market this month representing the lowest September since 2004.

The result is that numbers of 1 and 2 bedrooms newly listed properties were 24% down on the average for the year, with 3 bedroom properties down 15%. Meanwhile, sellers looking to trade up are faced with high moving costs due to current levels of mortgage rates and property prices.

Of those that are coming to the market, only sellers of flats have held their asking prices steady. To attract scarce summer buyers, sellers of terraces have trimmed their asking prices by 1.7%, semi detached by 2%, whilst detached property dropped by 4.2%.

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30/08/2007 by Dave.

The demand for home information packs (Hips) has been great and the scheme is here to stay, according to one expert.

A spokesman for Simply HIP said this week that customers looking to purchase property, including those with homeowner loans, should be aware that Hips are here to stay.

Ashley King, managing director at the firm, said although August is usually a quiet time for estate agents, the demand for Hips has been strong.

“On the first day we had over 20 instructions and its been 20-30 a day thereafter so we would say that [demand has been] in excess of our initial expectations.”

He assured house buyers and home loans customers that despite differing reports that the scheme would or would not be fully implemented, Hips would not be going away.

“There is a good percentage of agents, in my opinion, that now really realise that Hips are here and they are going to stay and that they’d better get on with it!”

Hips became compulsory for houses on the market with four or more bedrooms on August 1st and will be rolled out to properties with three or more on September 10th.

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23/08/2007 by Dave.

Research by Abbey Mortgages has found that millions of homeowners plan to exploit a loophole to avoid purchasing the Home Information Packs (HIPs) that are now mandatory for anyone selling a home with four bedrooms or more from September 10th.

In order to avoid shelling out for a HIP, 4.5 million homeowners with four bedrooms said they would be prepared to market their home as a three bedroom home - and describe their fourth bedroom as something else.

The most popular way to remarket a fourth bedroom, according to 82%, is as a study. Indeed, the word ’study’ could well become a code-name for a fourth bedroom on a property’s particulars.

Other names that people would use to describe their extra bedroom include: playroom (21%), games room (15%), walk in wardrobe (12%), TV room (6%), library (4%) and computer room (3%).

Despite this, the mortgage bank is warning homeowners against marketing their property as having a reduced number of bedrooms. Doing so may make your home appear overpriced and damage your chances of selling, which outweighs the relatively low cost of HIPs.

Furthermore, with 89% of Britons now using the Internet to search for properties, and 73% using the number of bedrooms as a way of filtering out irrelevant properties from a search, you may also run the risk of being missed by potential buyers.

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