HomeBuy delays bring collapse of chains
THE Government’s HomeBuy scheme is a serious attempt to help get the housing market moving and to encourage first-time buyers onto the housing ladder through shared ownership.
However, it has become a victim of its own success, with funding running out in parts of the country just weeks into the new financial year.
As a result, we are noticing that applicants buying properties through the MyChoice HomeBuy scheme, in which they can choose any property on the market, are now finding their funding and mortgage applications are being delayed. The average sale is taking twice as long, resulting in many chains breaking down.
At the same time, a number of HomeBuy agents are halting all requests for MyChoice HomeBuy and they have warned applicants not to incur any costs or instruct any solicitors or surveyors until they know what further funding is available.
Even prospective buyers who have received a letter saying they have been allocated funds are unsure of whether that promise will materialise.
So what does this mean for our industry? Is this an end to the money for first-time buyers in many parts of the country? Is there any more funding in the pipeline for later in the year, given the Government has to tackle a struggling economy while dealing with the MPs’ expenses fiasco?
If we want the market to keep moving, the obvious answer is that we need more money.
So why did the Government announce in the Budget that it would fund an additional £80 million for the less popular HomeBuy Direct scheme for new-build property sales when surely the money should have been targeted where it is needed most?
There are also a number of other shared equity schemes, all to be welcomed to get the market moving, but we’re now hitting a bottleneck which is having a serious impact on the rest of the market.
If something isn’t done quickly to address the situation and make more money available, we are very rapidly going to find ourselves back at square one.
What future for HIPs?
ASIDE from the rising cost of putting together a Home Information Pack, a giant question mark continues to hover over their future.
In a few months’ time, Gordon Brown will go to the country and call a General Election. If the Tories are elected to power, HIPs will most likely be scrapped.
It’s no surprise, therefore, that fewer and fewer agencies are now bothering with HIPs, making it harder for those of us who do follow the rules to get instructions. At the same time, we seem to be picking up mistakes on those HIPs that have been undertaken elsewhere in the chain.
We’re also having to contend with delays caused by the implementation of first day marketing, adding to the whole inadequacy of the system in place.
Quite simply, HIPs are not working because they are not workable and this is having a significant impact on volumes of transactions.
House prices may be rising in certain areas – and gazumping returning on the back of limited stock — but the number of sales going through is stalling and first day marketing, along with lack of mortgage or shared equity finance must take some of the blame.
So what of the future? What’s likely to be left if a new party is in Government? I believe that Energy Performance Certificates will be kept for residential, lettings and commercial property, but that we need to move to a system that is similar to that operated in Canada.
Homeowners there are encouraged to improve their energy rating — and are offered associated grants to do so.
I also believe that domestic energy assessors will have to upgrade their skills and adapt their role. We should also consider implementing a new breed of non-RICS regulated home inspectors/DEAs who are able to provide certain types of valuation and, in particular, mortgage valuations.
DEAs would then have a broader role with a clear career path and would also be able to provide the lending industry with mortgage valuations.
Whatever the pain we are going through now, let’s hope it is short-lived. Only a change of Government now will make the difference. Let’s hope it is sooner rather than later.
Massive disparity in search prices
LOCAL authorities across the UK are throwing the Home Information Packs process into further disarray by charging ludicrously huge variances for the cost of personal searches.
Following the abolition of the search insurance fee, around £5 or less before the introduction of the first-day marketing rules on April 6, councils are now charging anywhere between £11 and a staggering £220 for personal searches — forcing search companies and estate agencies to absorb the cost.
But surely this position is unsustainable. What firm will be able to take a hit in such huge price hikes without passing it on to the end user — the consumer? Yet again, it will be the householder who will have to foot the bill for this ridiculous situation.
Already, personal search firms have been lobbying local authorities over backlogs that have been building in searches being undertaken, claiming it is taking up to four times longer than previously to book their search requests with the added nightmare of having to speak to numerous different council departments.
Whether search companies will be able to obtain the information within 28 days of properties being marketed, as is required by law, remains to be seen.
At the same time, the Council of Property Search Organisations (CoPSO) is advising its members to make every effort to obtain property records, regardless of cost or difficulty in access, and to take legal action against local authorities who bar their way.
No-one disputes that it is important to get the quality of the search right but with the Land Registry also hiking up its charges for registering properties and supplying documents such as searches and official copies, it is inevitable the price of HIPs and conveyancing will have to increase substantially. It is an example of yet more red tape adding yet more cost and inconvenience to our profession — and yet we seem to roll over and accept it and we all suffer as a result.