Communities secretary Ruth Kelly's announcement on 22 May, barely a week before the initial implementation date for Home Information Packs (HIPs), that the packs would not be brought in until 1 August was met with dismay by many in the property industry.
RICS empathises with this view and finds the decision "extremely disappointing", yet feels the Government decision was the correct one in the circumstances as the infrastructure of accredited Domestic Energy Assessors and IT systems are neither in place nor tested for viability.
"The additional time should be used constructively to iron out problems," said RICS spokesperson Jeremy Leaf. "The practical implementation of HIPs must serve the best interests of the consumer."
Mixed message
There was some confusion over exactly why the Department for Communities and Local Government (DCLG) pulled the plug on the 1 June date as, the same day that Ms Kelly announced the two-month delay, a judge ruled that an RICS-initiated judicial review of the HIPS consultation process had merit.
The official reason given by Kelly for the climb-down was the lack of competent energy assessors to issue Energy Performance Certificates (EPCs) - a vital component of the HIP.
This much was true, but RICS was neither consulted nor informed on the decision to put back implementation.
Despite press reports to the contrary, RICS' decision to issue judicial review proceedings was not the reason for the Government's action, although as Jeremy Leaf pointed out: "This decision [to delay HIPs] shows our fears and concerns were justified."
What wasn't true was Kelly's announcement to MPs that RICS and the Government had reached "a pragmatic way forward that gives certainty and allows us to get on with implementation".
At the time, no such agreement had been reached and RICS had made no offer to withdraw its judicial review. Rather, RICS agreed proceedings should be 'stayed' - with the possibility of being re-activated - on the conditions that the Government provided a 12 week consultation on EPCs, published a Regulatory Impact assessment and paid RICS' legal costs.
Settlement
An agreement has subsequently been agreed with the Government over the consultation process.
Specifically, the validity period of an EPC - the issue at the heart of the judicial review - has been extended from three to 12 months by the Government and a 12 week consultation initiated.
This allows for the 1 August introduction date for HIPs to remain despite a full 12-week consultation being undertaken - as no EPCs will be out of date by the time the consultation finishes.
However, subsequent HIPs regulations, published by the DCLG, have caused further dismay as, according to RICS, they make HIPs "fundamentaly redundant".
The new regulations require sellers to have proof they've ordered a HIP at the point of sale of the property, but not to produce one at exchange of contracts.
Therefore, via a legal loophole identified by RICS, if a buyer is found and a property taken off the market before a HIP needs to be produced, the seller may never pay for one.
"This is another example of rushed policy that fails to meet the needs of consumers and the housing industry," said Jeremy Leaf.
"Unless the Government can show us the regulation that says a property cannot be sold without a HIP, consumers and industry will be left to draw their own conclusions. This will lead to two groups - those who pay for a HIP and those who legally get around the rules."
The subject reared its head again at a recent industry meeting on estate agency regulation and redress - jointly hosted by RICS and the National Association of Estate Agents (NAEA).
Jeremy Leaf probably spoke for a great percentage of the industry when he said: "It has taken ten years to get this far, but HIPs has suffered so many setbacks that you have to ask yourself if this is really the solution. We hope the DCLG will deliver in its promise of full consultation and if the outcome is that EPCs should be delivered outside of HIPs, serious questions must be asked about what remains."
Chief Executive of the NAEA Peter Bolton-King suggested that the Government would not listen to any further objections about HIPS and proposed that industry had to take the initiative to bring about change.
"We have to generate something that can achieve what HIPs initially, intended to achieve, because HIPs wont anymore."
It appears by repeatedly changing the landscape the Government has lost the backing of an increasingly disillusioned industry on the HIPS scheme.
With further meetings planned and more pressure inevitable from industry, the next few weeks should tell us more about just how much belief the Government still has in the project.
