Prescott plans a new disaster for house sales

John Prescott, the man who doesn't pay his council tax, will soon face
another major embarrassment. This is the chaos he will unleash by
introducing a serious new complication to homebuying, due to cost
homeowners £1 billion a year - all because he wishes to disguise his
need to obey a Brussels directive.

From June 2007, it will be illegal for anyone to offer a house or flat
for sale without paying up to £2,000 for a 100-page "Home Information
Pack", prepared by a certified inspector. This "HIP" will contain
details of legal and council searches, and a "Home Condition Report",
checklisting the kind of details obvious to a fairly rudimentary
visual inspection. (Buyers will still need to commission a full
structural survey and valuation.)

This is a flimsy cover, however, for the real motive behind Mr
Prescott's HIP scheme - his obligation to comply with EC directive
2002/91 requiring every home put on the market to have an "Energy
Performance Certificate", based on a formula which measures the size of
a property against recent fuel bills.

The more closely surveyors, estate agents and lawyers look into Mr
Prescott's scheme, the more horrified they become, not just by its
pointlessness, but by the damage it is likely to inflict on the
property market. According to his officials, it will require up to
7,500 inspectors, each needing 18 months' training.
The latest figure for inspectors in the pipeline is only 1,800, so when
the scheme comes into force in 18 months, less than a quarter of the
required number will be available.

Nevertheless, anyone caught by trading standards officials selling a
home without an HIP will be liable to a summary penalty up to £500. The
shortage of inspectors means that, unless Mr Prescott is allowed a
postponement from Brussels, delays of months, even years, will be
inevitable, creating havoc across the domestic property market.
The initial cost of commissioning an HIP will be incurred by the estate
agent, to be added to the bill when the property is sold. Although the
Government's estimated cost for an "average"
property is only £700 including VAT (quite onerous enough for sellers
on low incomes), in many cases the cost will be as high as £2,000, and
perhaps even more. Few vendors will wish to pay such sums more than
once, particularly when the cost of copying a 100-page report for each
prospective buyer could be £15 or more. Gone will be the days of
offering a home through more than one agent.

One horrified observer of this "disaster waiting to happen" is Philip
Collings, formerly the IT director for Railtrack, who has just launched
a website (www.hipfreehomes.com), explaining some of the more glaring
flaws in the scheme. He points out that, of the £1 billion a year it
will cost to run, the Government will take £87 million in VAT, and that
the details of each property will have to be registered on a Government
website, making it easier to carry out revaluations for council tax.

But Mr Collings also believes he has spotted a loophole in the scheme,
by which homeowners could avoid having to pay for HIPs. Although he is
not revealing the details yet, for fear of counter-action by Mr
Prescott, he is inviting property owners who are likely to sell within
two years to register their interest on his website, so that in due
course he can sign them up, for a modest fee, to an arrangement which
he believes could save them thousands of pounds and months of hassle