Gordon Brown recently finally apologised over the emails sent concerning Tory politicians by his aide, Damian McBride. However, the Government has still neither apologised nor withdrawn the fiasco that is Home Information Packs (HIPs). The continued existence of HIPs continues to undermine any potential recovery in the housing market.

Interest rates have been cut by 0.5% by the Bank of England to just 1.50%. This means that rates have now fallen by 2.75% since October 2008. However, whilst this is very good news for borrowers, it has been disastrous for savers and has had little real impact on the economy. Indeed, so desperate has the Labour Government become, that it has resorted to the most extreme measure of all, something that most of us thought we would never witness in this proud country of ours - the printing of money. The inevitable consequences of such a policy is hyperinflation. It will be recalled that this is exactly what happened in Weimar Germany during the 1920's, where people would have to carry their money in wheelbarrows rather than in wallets and purses, and where it was cheaper to literally burn money instead of firewood. And what was the end result of all that? Yes - the advent of one Adolf Hitler and the Nazies...

According to a recent report from the Royal Institution of Chartered Surveyors (RICS), house sales have now fallen to their lowest level since 1978. What happened in 1978? - the notorious Winter of Discontent when even the dead were not buried - the last time the Labour Party messed up the economy big time.... Symptomatic of the fact that the Government stubbonly refuse to admit to their mistakes is the fact that the hated Home Information Packs have still not been done away with.

The Council of Mortgage Lenders (CML) estimates that house repossessions will reach 75,000 in 2009, up from an estimated 45,000 repossessions in 2008.

From the 1st October 2008, if your renting out your property, you will now need to provide your tenant with a so called “Energy Performance Certificate”. Really, of what value are these “certificates” in the lettings market? Will your prospective tenants even look at them? According to the propaganda, an Energy Performance Certificate is intended to give an estimate of the comparative energy efficiency of a property. Well, if the prospective tenant really cared about energy efficiency, its efficiency is going to be readily apparent from even a cursory inspection of the property. If the house is old and decrepit, has no central heating, no double glazing, no loft insulation, etc, then it doesn’t require an expensive report to tell them that if they take the property, then they might very well have a problem keeping warm when winter bites and they may have to consider investing in some portable electric heaters. On the other hand, if the property has gas central heating, but the boiler isn’t a modern condenser model – a matter readily discernible from a simple inspection of the property, then again it doesn’t require an expensive report to tell the prospective tenant that their gas bills might be slightly higher as a result. In our humble opinion, such certificates in the lettings market are a complete waste of money. As Basil Fawlty once put it - “Next contestant, Mrs. Sybil Fawlty from Torquay. Specialist subject - the bleeding obvious.”

Only 100,000 new houses are likely to be built in the UK in 2008 according to The Observer, the lowest number since 1945 and 70,000 less than in 2007. This leaves PM, Gordon Brown’s, policy of building 240,000 new houses a year in tatters, and it was of course his Government’s decision to continue with the ludicrous policy of introducing Home Information Packs which sparked the housing market slump (along with its general mismanagement of the economy) in the first place.

Figures from the Bank of England show that the number of new mortgages being approved has fallen 39% in a year to its lowest level for 13 years. The Bank attributes the figures to a continuing slowdown in the housing market and the credit crunch.

The Bank of England kept interest rates on hold at 5.5% earlier this month. However, the odds are on a quarter point reduction to 5.25% in February. Indeed, with house prices falling and most of the important economic indicators pointing to a significant downturn in the economy, the Bank of England has been slow to react in reducing interest rates to a more appropriate level. Accordingly, the Bank may therefore be forced to make larger reductions later in the year to ward off recession.

Whilst Nationwide Building Society found that house prices increased in October, they sounded a note of caution in their recent press release. They stated that whilst some "may be tempted to interpret October’s numbers as a sign that house prices are immune to deteriorating affordability and tightening credit conditions, such a conclusion would be misguided. Most leading indicators of housing market activity are continuing to weaken. Surveyors are reporting the weakest levels of new buyer inquiries in many years and mortgage approvals are falling from recent highs amid weaker demand and tighter lending criteria for riskier borrowers. Slowing demand, however, will not have an immediate impact on prices if homeowners are in no rush to sell. New instructions to sell have in fact been falling since May, when there had been a temporary surge of property onto the market. Different factors could be driving the low level of instructions, including a reluctance to trade up amid current uncertainties and the fact that low unemployment is limiting the number of forced sales. The overall result is that the stock of unsold homes is still relatively low, and this is providing some residual support to prices. The underlying dynamics of the market, however, are clearly not as strong as this time last year."

House prices fell by 0.6% in September 2007 according to Halifax. The credit squeeze, the rise in interest rates, and the introduction of Home Information Packs are likely to be contributory factors behind the fall.

According to the Royal Institute for Chartered Surveyors (RICS), the number of properties at auction increased in the second quarter of this year to 5,120, an increase of 32%. Much of this increase was attributed to a large rise in the number of repossessions caused by rising interest rates. The RICS estimate that the number of repossessions could increase to over 45,000 in 2008.

HIP'S has been extended to 3 bedroom houses from the 10th September 2007. The extension will now mean that approximately 60% of the housing market is covered by HIP'S. According to the Government, HIP's will "speed up the housing market". However, in reality, the £400 - £700 fee is more likely to act as a deterrent to home owners placing their house on the market. Far easier either not to move or to let the house out if one has to move. That will be the rationale for many. Indeed, according to Jeremy Leaf from the Royal Institute of Chartered Surveyers, HIP's has already had a hugely detrimental impact on the housing market with the supply of new houses coming onto the market "drying up".

The Government recently anouned that the phased introduction of the Home Information Packs (HIPS) scheme would be linked to its ability to supply adaquate numbers of qualified Domestic Energy Advisors to implement each phase. Hence, the Government has avoided date linking the phased roll out.

Well, as regular visitors to this site will know, we are not exactly fans of the loathsome Home Information Packs scheme and as was inevitable, their introduction has now been put back until August. Why don't the Government just come clean and admit that they got it wrong? By only delaying its introduction, they are simply postponing the inevitable. The whole crackpot scheme was ill conceived from the start and has now degenerated into a complete shambles.

A recent report by the Alliance & Leicester has found that the number of one person households is likely to increase by 53% to around 9.9 million by 2026 and that the increase will account for around three quarters of the total growth in the number of households in that timeframe. The report attributed this to the rise in divorce rates and the fact that people are remaining single for longer. This trend not only means that the country’s housing stock will have to increase to accommodate it, but that type of new build housing being built will have to change with proportionately more flats being built. When commenting on the reports findings, Stephen Leonard, Director of Mortgages at Alliance & Leicester, stated: “Our report shows [that] the demand for housing will increase over the next 20 years. Interestingly, the pressure will come from the changing make-up of households as we see more people living on their own, and the concept of the traditional family home steadily being eroded. We can expect to see an increase in flats and converted houses in the future due to the rise in the one person household, as understandably, people living on their own will be less likely to splash out on a larger property. Social trends influence the way we live – right up to the house we live in. We are currently witnessing a change in society that is set to continue well into the future. Mortgage lenders need to recognise that future generations of homebuyers will have differing needs and financial circumstances and will need to consider this when designing mortgage products.”

The tenancy deposit scheme comes into force on the 6th April 2007. The new schemes essentially hold the deposit with a third party and offer an alternative dispute resolution (ADR) service to avoid court action. The two new schemes are:

• A custodial scheme whereby the deposit is held by the scheme during the tenancy and during any legal dispute.

• An insurance-based scheme where the landlord or agent keeps the deposit, but the deposit is insured in case of any dispute.

Either scheme must repay all or part of a deposit within 10 days of notification once a tenancy has ended or a dispute has been resolved. The penalty for landlords that fail to comply with the new rules is an amount equivalent to three times the deposit to be paid within 10 days.

Housing Minister Baroness Andrews argues that “Tenancy Deposit Protection is a key consumer protection measure which will also introduce a simpler way of resolving deposit disputes and help raise standards in the private rental sector. Under the new schemes, alternative dispute resolution services will be free to use for both landlord and tenant for the first time.” Nevertheless, results from a recent pilot scheme were extremely mixed.  

The custodial scheme will be run by Computershare Investor Services whilst Dispute Services Ltd will manage the insurance based scheme. The ADR service will be handled by the Chartered Institute of Arbitrators.

An advertising campaign has recently been launched to promote Home Information Packs which become compulsory for vendors from the 1st June 2007. The central focus of the campaign is the assertion that the packs will take much of the stress out of selling your home. Many would beg to differ with such a statement however. After all, which is likely to cause the most stress for a seller: the present arrangements or having to pay upto £600 for a Home Information Pack? It doesn't take a rocket scientist to work out what the answer is....

On the 1st June 2007, the most ill conceived piece of legislation since the poll tax comes into force: Home Information Packs. The consumer group Which? summed the whole scheme up best by dismissing it as a “half baked compromise of little value but of real expense to consumers”.

House prices rose by around 8% on average in 2006 and it is anticipated that they will increase again in 2007, but at a slower rate than in 2006. Forecasts range from 3-7%. The main factors fuelling the continued increase include the ongoing shortage in the supply of houses and the relatively strong economy. Nevertheless, as the rate of increase in property prices continues to outstrip wage growth and as it becomes ever harder for first time buyers to gain a foothold on the property ladder, many are warning of problems ahead.

Former government minister, Nick Raynsford has accused the Council of Mortgage Lenders (CML) of being opposed to the fight against global warming and a "malign brake on reform". Raynsford  slammed Michael Coogan, the director general of the CML, for his call to drop compulsory energy performance certificates next year. The certificates provide an indication of how a property's insulation affects energy costs.

In a letter, Raynsford tells Coogan: "The CML under your leadership ... has acted as a malign brake on reform, and has sought to undermine the efforts of those who have worked to make the home buying and selling process less wasteful and stressful for the public. You are now at it again. Your latest speech calls for the abandonment of energy performance certificates. At a time when it is clear the country expects all of us in responsible positions to address the biggest challenge of our times, climate change, it is extraordinary that you should be proposing a measure which works against this objective. Even more astonishing is the fact that your speech made no mention of the issue of climate change, or the extent to which domestic properties ... are contributing to global warming."

By way of response, Coogan emphasised that any proposals needed to be both "effective and cost effective" and that "what is now left of the government's proposed reforms is a scheme which gold-plates European legislative requirements. Asking the government to think again is not suggesting that energy performance certificates should be abandoned. Indeed, we have argued that they should be made more widely available ... We agree with Nick Raynsford about the challenges posed by climate change [and] would be happy to discuss initiatives with the range of stakeholders".

On the 9th November 2006, the Bank of England will be announcing whether interest rates will be going up and there are warnings already that a further rise may slow the housing market. All the indicatiions are that there will be a quarter of a percent rise and then a further quarter of a percent rise in the new year. The National Association of Estate Agents (NAEA) is advising the Bank of England against the rises. From the minutes of the October meeting of the Monetary Policy Committee (MPC), who set interest rates, there is a strong indication the Bank of England will vote for a rate rise next week, said the NAEA. Peter Bolton King, NAEA chief executive said: "The residential housing market on the whole has performed well in 2006 and it is clear that activity has improved from the downturn seen in the market during 2005. However, I would ask the Bank of England to remember that the market differs significantly throughout the UK, with some areas of the country seeing a slower housing market, whilst London, the south-east and East Anglia are performing particularly well. A further rate rise could have a detrimental effect on the areas that are already looking slightly flat." Mr Bolton King pointed out that figures from the Council of Mortgage Lenders and the NAEA in September showed a slight downturn in the market since the last rate increase in August. He said: "The market, it appears was buoyant enough to absorb the rise without too drastic an effect and from all reports, the market is still in good shape. However, there has to be doubt as to whether a further rate rise will be absorbed with the same confidence [and] I urge the MPC to consider this carefully before they cast their vote."

With the average cost of a house now nearly £200,000.00, young first-time buyers are now increasingly relying upon "the bank of mum and dad" to get on to the housing ladder according to a new report. Research from Skipton Building Society has revealed that one in four 20-35 year olds get their parents to contribute to their deposit. According to Jennifer Holloway from Skipton Building Society, "Faced with industry figures which put the average cost of a house in the UK at nearly £200,000.00, climbing onto the property ladder must seem as daunting as climbing Everest. It is little wonder first-time buyers are looking to their parents for financial help. The reality is that if you want to be a homeowner, you have to make the most of the money you have. Our advice for young people is to start saving as early as possible - even if it means forgoing the odd night out or new pair of shoes."

Around 20% of tenants at some point allege that a previous landlord has unreasonably withheld some or all of their deposit. Two schemes designed to remedy this situation, however, have now been put back yet again, this time until the 6th April 2007.

The new schemes essentially hold the deposit with a third party and offer an alternative dispute resolution to avoid court action. The two new schemes are:

• A custodial scheme whereby the deposit is held by the scheme during the tenancy and during any legal dispute.
• An insurance-based scheme where the landlord or agent keeps the deposit, but the deposit is insured in case of any dispute.

Either scheme must repay all or part of a deposit within 10 days of notification once a tenancy has ended or a dispute has been resolved.

The penalty for landlords that fail to comply with the new rules is an amount equivalent to three times the deposit to be paid within 10 days.

The pilot scheme however had mixed results and the date of the launch of the schemes has been postponed on multiple occasions. This further delay does not bode well.

Jeremy Leaf, a senior member of the Royal Institute of Chartered Surveyors, has warned that the government's Home Information Packs (HIPS) are likely to be significantly delayed. He said that it is "almost inconceivable" HIPS can be launched by June as planned. His comments come two months after the government announced that the survey - which was to be a mandatory part of the pack - would now only be voluntary. Mr Leaf concluded by saying that the governments plans for the introduction of HIPS were in complete disarray.

It is our own considered opinion that the total shambles that is HIPS, a fiasco initiated by John Prescott (he that has retained his full salary despite losing most of his department), should now be completely abandoned.