So I did what any good social media girl would do, I fired the news out on Twitter. Little did I know then that it would create a raging debate!
As an investor that often buys property direct from the vendor, I can honestly say that in our experience when a seller is on their uppers to such an extent that they need to consider selling their home, the last thing they need is yet another expense and barrier to doing so, both in time and money. To my mind this creates a form of discrimination.
What Were They For?
HIPs were brought in as a solution to try and speed up the selling /buying process. In truth all they did was raise £100 million per year for govt tax revenue and make the process as long as it ever was. #fail - as they say on Twitter!
And while we are on the grubby subject of money, in my opinion, this is what it was really about. Yes, of course it is very sad that some 3000 people who work in the HIPs ‘industry’ (one which did not exist until a coupe of years ago) will lose their jobs, but one has to wonder at the stupidity of setting up a business based solely on one piece of govt legislation. To my mind this is a recipe for disaster for any business.
All Change
Surely we are all aware that a govt can change at the drop of a hat (as we witnessed the other week) and one if the first rules of business is to not put all your eggs in one basket. Diversity spreads risk. (A personal mantra of mine and one which has served me well in property land!)
Whilst I have sympathy for those caught up in the mess, I for one am glad at the demise of HIPs. Maybe now it may help the property market move on from the dead dodo it is at present. Folks who have been stuck due to finances being extremely tight may be able to take advantage of a sale of their property before values fall anymore.
Of course it is only one factor in a very complicated system, and many more things will need to be sorted so that we can return to a stable set of market conditions. However, agents are already reporting an increase in valuations and property coming on to the market. More home sales generally means higher rents will ensue as the supply of housing goes back on the market making rentals more scarce and competition greater.
Many have commented that the HIPs system helped first time buyers get on the market, personally I don’t think it made that much of a difference. What makes first time buyers get on the market is the availability of finance, not having a HIP in place.
Below are some comments sent back to me from twitter after I saw the news on the BBC.
This is the message I sent out: “Property HIP’s officially dead. Suspended as of today”
Here are some of the comments I got back from Twitter in response;
What an incredible waste of money (investor)
It was on the BBC news this AM that HIPs is officially suspended as of this morning. HOORAY! (estate agent)
If I built a business around a scheme that the Gov introduced & then got abolished shortly after, I would be worried too. But what now? (investor)
Many will lose jobs through no fault of their own (HIP provider) [this in response to my tweet - see above!]
Is there enough money in just EPC’s alone? They remain valid for 10 years…(Investor)
Do you really think a HIP and EPC business is not going to be devastated in a similar way as a HIP only business would be (HIP provider)
So it begs the question….what do you think? Is it a good or bad thing that HIPs have met the grim reaper? Lets not forget that many HIP providers have made plenty of money out of this in the last couple of years, and it’s been known for a long time that a new government would scrap them.
