Lenders should seize HIP opportunity

A few forests-worth of articles have been written on the impending implementation of Home Information Packs and the debate shows no sign of abating. Is the initiative a good or bad thing? Will it work or won\'t it?

What will be the impact on the housing market?

But brokers should be thinking more about the propositions they are going to offer rather than whether HIPs will happen. A U-turn looks unlikely as the big day approaches and more and more money is spent on marketing the idea.

One of the interesting aspects of HIPs will be that all homes will receive an energy rating in the form of an energy performance certificate. These certificates will form a compulsory part of the Home Condition Reports within HIPs.

The report will use the standard assessment procedure and provide prospective buyers with a detailed report on how energy efficient the property is and its impact on the environment in terms of carbon dioxide emissions.

In much the same way as fridge freezers are now coded according to their efficiency, a property will be given an overall rating along with a potential rating that could be achieved. Details will also be given on other aspects of the property such as windows, walls and the heating system.

The positive aspect of this is the educational element regarding the effect our homes can have on the environment and indeed on our own wallets through inefficiency. And instead of simply pointing to where energy efficiency could be better the certificate will also give information on how this could be achieved, indicating the level of investment required and importantly the savings that this could yield.

These suggestions could encompass simple changes or more sophisticated techniques. They could cover things as basic as ensuring that thermostats are not set too high and improving insulation by filling wall cavities right up to recommending the installation of solar panels.

This opens up a niche for lenders to offer products targeted at properties receiving certain ratings. These could be designed to help borrowers improve the efficiency rating of their homes by helping to finance improvements.

Norwich and Peterborough has long taken this tack with its green mortgage which offers a free energy rating survey and the planting of 40 trees in the first five years, helping shift the property towards a carbon neutral position.

As the public becomes more conscious of environmental issues these products could become increasingly popular as long as rates are competitive. As ever, it is unlikely that borrowers will be prepared to compromise when it comes to the question of cost.