Tuesday, 25 September 2007Falling on Deaf Ears
Hips legislation finally arrived, but to whose benefit has yet to be revealed
So Hips are here. And despite opposition from more property, legal and mortgage market luminaries than you can shake a stick at, the government has stoically resisted all efforts to be deflected from its path of purported property transaction reform.
Notwithstanding the fact that just about every constituent part of this interventionist piece of legislation has been given the thumbs down by professionals within and without the financial services arena, the government has pressed ahead.
The House of Lords rejected it, the government's own parliamentary sub-committee concluded that the reforms were not fit for purpose and along the way central planks of the original proposals were jettisoned as unworkable.
We are now left with an emasculated piece of legislation that will do nothing to prevent gazumping - an element of the early rationale for intervention.
We know that the energy efficiency reports could have been introduced outside of the Hips package - and that they amount to nothing other than illusory window dressing anyway.
And we also know that the only people supporting this initiative or believing it to be a good thing and representative of progress are those who stand to profit from it. And since the original postponement of the introduction of Hips we have also seen a degree of corroboratory evidence to support claims that their introduction will disrupt the property market.
The surge in the numbers of homeowners marketing their property in advance of the original launch date of Hips was no coincidence.
This legislation is universally unpopular and - according to the government's own research - the subject of the most prolonged and consistent opposition of any bill it has sought to introduce.
So, given that Prime Minister Brown's inaugural speech talked about him leading a government prepared to listen - how does what we have now got chime with what we said we wanted? One can only assume that the subtext of his pledge was that while we may indeed have a government prepared to listen, we also have one that is equally inclined to ignore that which it does not want to hear.
And such has been the clamour to bring to a conclusion the tortuous path of this regressive piece of legislation that it has in all but name reclassified four-bedroom properties as three-bedroom plus study homes.
Had this most bizarre of scenarios been played out within the world of commerce what accusations and investigative activity might one suppose could now be in place? The question then is why, in the face of such logical, rational and sustained opposition has the government pressed ahead?
Could it be that it is self-interest rather than public interest that has been the real driver ?
It is already a given that the Treasury's VAT revenue is in for a major boost as a result of Hips. Disregard any nonsense about the costs of this being neutral. Of course this is not the case. Yes, the vendor will be stumping up the mandatory outlay for the production of the pack.
This will not absolve the purchaser from travelling a similar route. Both purchaser and lender will require the valuation and condition of the property to be confirmed. This means duplication of cost and more VAT for the government. It is emerging that this is not the only way in which the Treasury will benefit. The information collected from the information packs is to be recorded on a government database which can be used by inspectors setting council tax levels.
The Valuation Office Agency and online estate agent Rightmove has now asked for access to the Home Information Pack database as well.
Eric Pickles, shadow local government secretary could be smack on the button when asserting that Hips are nothing less than a home information tax. Hips are not about making it easier to get on the housing ladder - they are a stealth way of conducting council tax revaluation by the back door.
No wonder the government has been so keen to promote this pig's ear piece of legislation - their snout is so deep in the trough of taxation by stealth that no matter who is in charge, they just know of no other way?
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