The watered-down home information packs that will be mandatory from June 1 focus on energy-efficiency ratings.Jon Nealelooks at the implications and puts three British homes to the test

On a remote ridge in the Welsh Marches, a surveyor is hard at work, tape measure in hand. But this is no routine survey. He is calculating the energy efficiency of a five-bedroom farmhouse in this isolated valley hidden in the Shropshire Hills.

For those expecting space-age equipment and thermal cameras, the process is disappointingly mundane. It involves measuring walls, checking boiler serial numbers and inspecting loft insulation. But it will become a common sight in every corner of England and Wales from June 1, when anyone selling their house must commission a home information pack (HIP) or face a £200 fine.

The introduction of HIPs represents a profound change in the way we buy and sell our homes. For the first time, the government will not allow anyone to market a house or flat without a set of documents prepared upfront. The pack will include land-registry documents, local searches, evidence of title and the most important document of all: an energy performance certificate (EPC). This will rate homes from A to G, depending on how well they generate and conserve heat, in a system similar to that used on white goods. A, of course, is the best rating possible; G is the worst.

Why are HIPs happening, and how will they and the energy rating affect homeowners? Will they affect property prices? Five weeks before their introduction, property professionals as well, as large sections of the public, are concerned about their potential effect on the housing market. Is that concern justified?

Originally, the packs were flagged as a way to speed up the process of buying and selling houses. It was a laudable aim, augured in Labour’s 1997 manifesto. The government estimates deals that fall through – whether from gazumping, gazundering or delays that trigger a collapse in a chain – cost £1m daily in wasted surveys, fees and time. But while there is agreement that change is needed, this attempt to remedy the situation has sparked industry opposition.

Initially, the central plank of a HIP was the home condition report (HCR), a mandatory assessment of the property, by a new breed of inspector, that was to act as a survey of the property. This was scrapped last year in an embarrassing U-turn, amid mounting complaints that buyers would not trust it, the shortage of home inspectors would cause delays, and mortgage lenders would still demand an independent report.

Dropping the HCR did not, however, dampen industry anger; if anything, the decision to carry on with the rest inflamed it. “We never believed HIPs would improve the selling process, but without the HCR, they become meaningless,” says Peter Bolton King, chief executive of the National Association of Estate Agents. “It is the document potential purchasers would have understood and that would have been of real use to them.”

Now the government seems to have made the importance of getting our homes more energy-efficient the reason for the packs’ introduction. Earlier this month, the housing minister, Yvette Cooper, said: “EPCs are the single most important element. Indeed, they are the only new compulsory element. Otherwise, HIPs simply collect together the legal information and searches that are already provided and paid for in the home-buying and selling process.” All this is going to cost homeowners. During trials involving the use of free packs, sellers and buyers have largely praised them as a good way to speed up the house-buying process – but said they would not be so enthusiastic if they had to pay for them.

From June 1, sellers will. The EPC will cost about £100; what the overall pack will cost is debatable. The government claims that they will cost on average £300-£400, but there are warnings from within the industry that the real figure could be more than £1,000. HIP London, a provider of the packs in the capital, says the official figure skirts around charges for searches and, in particular, the extra costs leaseholders will face.

Hamptons, the estate agency, has already said it will offer free packs in an attempt to attract potential sellers, but Paul Marsh, deputy vice-president of the Law Society, warns that consumers should read the fine print on such offers. “I am concerned about this, as sellers could unknowingly sign up to a sole-agency agreement,” he says. “There is a danger in an estate agent controlling a HIP. The right person is the solicitor, who can take it to any number of different agents.”

Few disagree with the concept of EPCs, which will help householders work out how to reduce their energy bills and carbon emissions. Fridges and other kitchen appliances already feature energy ratings, and manufacturers and consumers have taken them to heart. But refrigeration and cooking account for less than 10% of the energy used in a typical house; heating and hot water, more than three quarters of the total.

So introducing ratings for houses, the biggest purchase most people ever make, does seem logical.

A YouGov poll suggests that more than 70% of people want to know about the energy efficiency of the homes they are buying, and believe it is a good idea to rate them; the Energy Savings Trust estimates householders could save up to £300 a year if they did what an EPC recommended. Cooper has said that if only one in five owners made even the basic changes suggested, the resulting cut in carbon emissions would be the same as taking 100,000 cars off the road.

Such statistics are difficult to argue with. Still, even though the harshest critics don’t believe that at this late stage, HIPs will be scrapped, the new issue is whether or not they are the best vehicle for promoting energy-efficiency.

Even other arms of government are dubious. The Better Regulation Commission (BRC) wants the energy ratings delayed, saying that the requirement for a new one each time a home is put on sale goes well beyond what a forthcoming EU directive requires. “In our review of the regulatory aspects of the Stern report, we explicitly cautioned against ill-considered regulatory responses to the climate-change challenge, and using these as a justification for measures that have other moti-vations,” says the BRC’s chairman, Rick Haythornwaite. “We would like to see evidence that all options to minimise costs have been considered.”

The Royal Institution of Chartered Surveyors (RICS) says that efforts to speed up property transactions and make householders become more energy-efficient don’t go far enough, and that blurring the line between the two is simply confusing.

“We have no issue with EPCs, but they should be carried out when the surveyor is visiting the property for the mortgage valuation or survey, rather than having to organise a special trip, which is not energy-efficient,” says Jeremy Leaf, of the RICS. “EPCs and HIPs are good in principle, but don’t need to be rushed. That will only increase the risk of compromising activity in the property market and of making things even harder and more expensive for first-time buyers.”

Owners will now be allowed to put their properties up for sale while they finalise the pack, but a home’s energy rating must be attached before details can be placed in an estate agent’s window – or anywhere else.

Agents opposed to home packs expect uncommitted vendors to baulk at the cost and decide not to sell; they warn that in a market with a chronic lack of homes for sale, more teething problems could spell disaster.

“I don’t care what the Association of Home Information Pack Providers says, and I care even less what Yvette Cooper says. They do not realise how unprepared the industry and public are,” says Nick Salmon, commercial director of Harrison Murray estate agency and founder of Splinta, an antiHIP group.

More here from Times Online……

The city-centre flat

Type of house: A two-bedroom flat, built in 1993

Location: the Jewellery Quarter, Birmingham

Current energy-efficiency rating: 80% (C)

Potential energy-efficiency rating: 82% (B)

Current bills:£198 per year

Potential savings:£13 per year

Main failings:Manually controlled heating

Proposed improvements typically costing less than £500: None

Proposed improvements typically costing more than £500: Install automatically controlled, fan-assisted storage heaters, at a cost of about £1,000 for a property of this size (saving £13 per year)

Survey carried out by: Stephen Callaghan of Energy-assessors.com

Homeowner:Chris Shears, 25, a project administrator. He bought the flat nine months ago through a shared-ownership scheme and already has energy-efficient light bulbs throughout

He says:“I was disappointed to just miss the B grade. It seems there is little I can do to improve the rating, although the suggested improvement was helpful

“I would consider installing new storage heaters if I was going to sell, as they are not hugely expensive. But I think that bringing up the energy efficiency by a grade would have an effect on a buyer of a flat like this.”

The Georgian farmhouse

Type of house: Five-bedroom farmhouse, built in about 1800, with Victorian additions

Location: Ratlinghope, near Shrewsbury, in Shropshire

Current energy-efficiency rating: 30% (F)

Potential energy-efficiency rating: 48% (E)

Current bills: £1,789 per year

Potential savings: £550 per year

Main failings: Solid stone walls are not good insulators; the main floor is built directly on the earth, leaking heat; only 20% of the windows are double glazed; there is only one energy-efficient light bulb

Proposed improvements typically costing less than £500: Add 2in of insulation to the stone walls, at a cost of about £40 per square metre (saving £478 per year); top up loft insulation to 250mm, which will cost about £240 (saving £58 per year); install low-energy lighting (saving £15 per year)

Proposed improvements typically costing more than £500:Change all windows to double glazing, costing from about £350 per window (saving £39 per year); install photovoltaic cells – a typical domestic system costs between £10,000 and £18,000 to install (saving £68 per year)

Survey carried out by: SSH Chartered Surveyors, Hereford

Homeowners: Andrew Sayer, 50, the managing director of a Birmingham-based firm providing services to local authorities, and his wife, Jane, 48, a part-time administrator. They are adding Thinsulate – a plasterboard backed with reflective material – to their walls to reduce their bills

He says: “Old houses are going to struggle to achieve high scores. But I didn’t think it would be quite as bad as that in terms of energy-efficiency. I was disappointed that our boiler, which is just six months old, received only a medium rating.

“It would be good to feel that if we do all these improvements, we could get a much higher rating, but we can’t get away from the fact that the house is not very energy-efficient.

“When you buy a house these days, you have to stick your finger in the air and guess what it will cost to run, as energy has become so horribly expensive. I suppose in a few years’ time, it will have become standard. However, I think the energy-efficiency rating is more relevant if you are looking at lots of similar properties, say a dozen terraced houses, rather than a one-off 200-year-old farmhouse.”

The London terrace

Type of house: A four-bedroom terraced house, built in 1912

Location: Wandsworth, south London

Current energy-efficiency rating: 42% (E)

Potential energy-efficiency rating: 56% (D)

Current bills: £952 per year

Potential savings:£247 per year

Main failings: Solid brick walls without insulation; suspended timber floor; no low-energy lighting; no individually controllable radiators; only 55% double glazing; noncondensing gas boiler

Proposed improvements typically costing less than £500: Add 2in of insulation to solid walls, at a cost of about £40 per square metre (saving £170 per year); top up loft insulation by 250mm – the typical cost is £240 (saving £30 per year); add insulation to hot-water tank and pipework – costing about £300 (saving £19 per year)

Proposed improvements typically costing more than £500: Install thermostatic radiator valves, which cost £250-£300 per radiator (saving £39 per year).

Further improvements could be made by installing solar water heating – a domestic system will cost £3,000-£4,500 to install (saving £17 per year) Survey carried out by:Sava inspector Ian Barton Homeowners:Cathy Robinson, 47, and her husband, Joseph, 53, both journalists. They have four children living at home

She says:“I didn’t think we would get a good rating, as it is a draughty property. We will now look at insulation and thermostatic controls for the radiators, get some quotes on the windows and do something about our boiler.”