War against Homeowners. News from the Front.

Today, the junior minister entrusted with rolling out the Government's latest weapon in the War against Homeowners, a device known affectionately as the Home Information Pack, or HIP, announced that the Home Condition Report (HCR) would not initially be part of it.

Previously, the HCR was paraded as one of the most important elements of the HIP. It would help buyers make their minds up and save loads of time and money for people buying crumbling wrecks which had been tarted up a bit. The Government was told that it would never work. They were told that the standard of a HCR was not high enough for mortgage lenders and not low enough for the semi-professionals entrusted with doing them to carry out without making a total mess. They were told that there was insufficient time to train the "Home Inspectors" required. They were told all these things by the Law Society, by the RICS, by the NAEA, by the Tories who in a brief burst of lucidity had probably realised what was going on. But John Prescott - was he listening? No. And Ruth Kelly? Too busy praying probably. And now some poor junior minister has been wheeled out to take the rap. Ha ha ha!

There are 152 Companies trying to market hips to agents, financial institutions and solicitors. 152. The total market for HIPs is around £1.5bn gross with a profit margin of around 5%. Even a minister with a calculator can work out that there is less than half a million pounds profit in it for each of them per annum. A whole load of people are going to be very disappointed. Millions of pounds have been invested in this fiasco by people who should know better. Most of this will be lost. The HIP providers to whom I have spoken expect 10-12 of them to be around in 18 months' time.

What is worse is that the 7,000 or so people who have signed up for Home Inspector courses at around £2,000 each will have very little to do when they do qualify. The only element of the HCR that will remain for the time being is an Energy Efficiency Report which, because it will require a Home Inspector to visit and there aren't enough of them, will no doubt also be shelved for a while. People will be reluctant to pay the full HCR fee for an Energy Efficiency Report. That's pretty obvious to us, but probably the Government will have overlooked it.

The other alarming feature of the roll-out of HIPs is that many solicitors seem to be unprepared for it. We will have no problem in arranging HIPs for clients, and we would of course suggest that they speak to us before marketing their property.

Meanwhile, a poem....


The HIP-popotamus (written by T S Eliot with no clear idea of its relevance)

The broad-backed hippopotamus
Rests on his belly in the mud;
Although he seems so firm to us
He is merely flesh and blood.

Flesh and blood is weak and frail,
Susceptible to nervous shock;
While the true church can never fail
For it is based upon a rock.

The hippo's feeble steps may err
In compassing material ends,
While the True Church need never stir
To gather in its dividends.

The 'potamus can never reach
The mango on the mango-tree;
But fruits of pomegranate and peach
Refresh the Church from over sea.

At mating time the hippo's voice
Betrays inflexions hoarse and odd,
But every week we hear rejoice
The Church, at being one with God.

The hippopotamus's day
Is passed in sleep; at night he hunts;
God works in a mysterious way -
The church can sleep and feed at once

I saw the 'potamus take wing
Ascending from the damp savannas,
And quiring angels round him sing
The praise of God, in loud hosannas.

Blood of the Lamb shall wash him clean
And him shall heavenly arms enfold,
Among the saints he shall be seen
Performing on a harp of gold.

He shall be washed as white as snow,
By all martyr'd virgins kist,
While the True Church remains below
Wrapt in old miasmal mist.

The Sordid Truth about Referral Fees

Whoever you instruct to act for you: Solicitor or Conveyancer; you need to ask them one question: "do you pay Referral Fees?" Referral Fees are a commission, bribe, or bung, call it what you will, paid by the Solicitor or Conveyancer to someone for introducing them to a client. For many agents "I know a good Solicitor" means "I know a Solicitor who pays me a good referral fee". Some of us in our profession call this corruption, but of course it is perfectly legal, and some firms even tout themselves around estate agents and other intermediaries offering considerable sums for recommendations.

And when I say considerable, I mean it. One Solicitor to whom I spoke about this: I will say no more than her firm was based in Croydon, which you might think was punishment enough; admitted that of fees paid by a client for what seemed to be an uncomplicated transaction, nearly 40% was paid to the introducer.

Now you might very well be thinking: "if these people are so stupid that they will pay all of their profit away, why should I worry?" Well, apart from the fact that your transaction is being handled by people with such clearly defective business acumen, you might conceivably think that your fee is being used to deliver an efficient and thorough service by paying for highly qualified staff who devote a reasonable amount of time to your transaction. Well obviously not! If your transaction's profit margin is paid to some greedy commission agent, then in order to make ends meet, your lawyer is going to have to take on more and more work, and that means your transaction gets off the bottom of the pile now and again, and no more.

This whole process, which makes the "cash for honours" scandal look on the level, has become instutionalised big business. Large corporate agents will have tie-ins with conveyancing factories, and their staff are penalised if they fail to introduce enough cases to them.

The bottom line is that the consumer is paying for all this. Firms that pay referral fees cannot deliver value for money almost by definition. Your cash is being siphoned off to pay bribes.

So ask that question!