ePerformance News from the Home Inspector Forum

The surge of October - part one

Now that all homes, regardless of when marketing began, and rentals require EPCs, even silent forum lurkers will have noticed members reporting increased volume since October 1st. We asked how the change in legislation affected DEAs and HIP providers, and in part two (below), we have the top-down perspective from accredition scheme managing director, Brian Scannell.

From day one of October, there was an unmistakable increase in work instructions placed on the forum. By the end of the month, instructions had soared by 75% and the total order value by 91.2%, compared to the previous month of September.

Despite recent news that some national providers had slashed fees to as low as £35, the average fee paid per EPC last month, according to the HIF index (see right), actually climbed by 9.26% - from £47.08 in September, to £51.44 in October.

Obviously, the HIF index is overwhelmingly dominated by independent DEAs, so we don't know if the end-fee - the price a client pays - is actually much different to that charged by national providers.

But what is driving demand? Home Informatoin Packs or landlords?

Google Trends might offer a clue:

Legend: home information pack | epc | energy performance certificate

The divergence between search volumes for HIPs versus EPCs is stark. Despite entering the traditional "up-cycle" season for buyers and sellers, Google actually records a slight decrease in search activity for [Home Information Pack].

Although the timeline clearly highlights October as a key trigger-event for the spike in EPC search traffic, it's not all down to the explosion of landlords scrambling for EPCs.

There's another aspect to this: home-sellers that lost their immunity against the HIP and EPC requirements as a result of the transitional exemption period ending October 1st.

Some have not been too happy about it either, it seems...

'Significant growth' in EPCs

Guildford-based HIP and EPC provider, The Partnership - a company using employed energy assessors -, has experienced strong demand for EPCs since October 1st, albeit from confused and reluctant homeowners: "To be honest, we've been rushed off our feet", said Managing Director, Peter Ambrose.

"Nearly half of our instructions came from properties already on the market that need an EPC, rather than lettings. There has been a significant growth in requests for EPCs, but unfortunately, the scepticism amongst the public is still strong. Frankly, we still find it difficult to justify to sellers the benefits of an EPC and they remain the single source of complaints and concerns about HIPs, with most sellers believing that HIPs are EPCs, than EPCs being just a component."

Demand for HIPs, however, has been "very patchy", Peter said, adding: "We can get really strong days where we're rushed off our feet, and then unbelievably quiet."

Probate driving HIP demand

"I would say that the growth in transactions for probate is driving HIP business to solicitors - who often outsource this work - so theoretically, DEAs with solicitor relationships may be doing well, although I doubt it - certainly lettings has been strong."

On the flipside

But according to John Mackenzie of Southern Energy Consultants - an independent DEA and HIP provider based in West Sussex - demand from the lettings sector has been flat: "I'm not experiencing any 'spike' due to the lettings business.", he said.

"Don't get me wrong, I have a number of Letting Agents on board but they're not really generating much business for me at present. My upsurge in business is due to HIPs - I'm absolutely flat out at the moment."

As if to remind us that Google doesn't quite know everything, yet, Ron Smith Galer, also an independent DEA and HIP provider, said: "At MyInspector October has been our busiest month so far. HIPs are back to the July level and rentals have been the icing on the cake. I am getting new business from clients nervous about using internet suppliers"

Calling time on the party

Some forum members are not expecting the music to last, though. Landlords were bombarded with warnings about the new regulations in the run-up to October 1st, via both the media and internet. The fuel of urgency was further ignited by rumours of a shortage of DEAs - mainly from within the lettings industry -, which sparked some landlords with a portfolio to act sooner, rather than later.

One company we spoke to, with over sixty properties, was told by its lender that HMO properties required EPCs. The property was not being sold and even after reading the CLG guidelines, the landlord still went ahead with the assessment.

With rental EPCs lasting ten years, forum member, Rob G, clearly doesn't believe the party will last. Just days before October 1st, he wrote: "...last week we broke our all-time record for number of instructions received in a day, although I don't expect it to be like this forever."

If Google Trends is anything to go by, maybe the bubble has already burst.  

Devon & Cornwall Home Inspectors Association

DCHI scoop £2500 NHER Energy Community Grant.

DCHI Secretary, Tim Baxter, and Chairman David Griffith, show off the £2,500 grant from NHER

Devon & Cornwall Home Inspectors Association (DCHI) were announced the lucky £2,500 benefactors of NHER's Energy Community Grant at this year's annual NHER conference in Birmingham on Oct 22nd & 23rd.

Managing director, Brian Scannell, said: "In reviewing the applications for the Community Grant, we were impressed with what DCHI were already doing and with their plans for the future. We hope that the grant will enable them to do even more to support the independent energy assessors and Home Inspectors in their region and we wish them every success for the future."

We asked Tim Baxter, DCHI Secretary, to tell us how they've survived during the last two turbulent years, and how they will use the money.

A little history of our merry band

By Tim Baxter

In July 2006, seven of us met one evening in The Butchers Arms, St.Ive, Cornwall and realised it would be helpful if we could meet regularly to discuss whatever needed to be discussed about the new industry before us, as well as to help each other with training and qualifying for our HI Diplomas.

Since that evening, the DCHI has gained not just strength in numbers, but support from local agents, solicitors and pack providers, as well as others connected to the industry. 'DCHI' has become a household name and we have actively promoted the benefits of using our locally resourced services to clients, emphasising the reliability and support offered through the DCHI.

From seven to 82 members

The DCHI currently has 82 Members who are actively involved with developments in the industry. Betweeen us, we can adequately cover local requirements for any type of energy assessment excepting Level 5 Non-Domestic - but we're working on that!

We meet on Tuesdays near the beginning of each month. On 4th November we held our 33rd Meeting in Exeter - the grant award was high on the Agenda!

At each meeting, we run through some preliminaries with Officers' Reports and try - where we can - to incorporate a speaker to talk on a reasonably relevant subject. One of our Members, Anne-marie O'Brien, is a lecturer at North Devon College She recently ran a series of lectures on the RdSAP 9.82 Update so that we could be up-and-running for the new domestic EPC requirements.

We also deal with particular issues of concern which Members have raised in advance.

Last year we achieved a Membership of 138 HIs and DEAs. However, the numbers tailed-off mainly due to the massive oversubscription of energy assessors into the industry.

Earnings in the West Country are near the worst in the country. Fees are a constant issue, but not a matter the DCHI makes comment upon, let alone attempts to influence. The DCHI's removal from commercial comment is sacrosanct, and has perhaps been its biggest asset.

'What goes around, comes around.'

Surprisingly, to others, DCHI's Members remain loyal and entirely focussed on providing their clients with good service; an essential quality here in the West Country - you really are only as good as your last job! Far from any conflict of interest, DCHI Members willingly offer help to each other in their businesses, passing leads and disciplines between each other without demand for gain. A lovely saying here in the West Country is: 'What goes around, comes around'. It has certainly worked for me, and for all.

The camaraderie

Many of our Members are very short of funds and struggle to make ends meet. But they do make the effort, and that is what has spurred us all on over the last 2 years or so. The support is wonderful - the camaraderie, better still.

This Grant Award will enable DCHI to move forward quickly with the design and completion of Phase III of its web site, giving Members a greater presence in the industry, and Clients better access to them.

It will also enable us to buy-in the expertise for lectures, and forums for our Members. With the various additional skills and disciplines - and surely more to come - the DCHI needs to keep its presence up-to-date, and advance the various fields of Energy Assessment, and/or Servicing, to its local Clients.

Our aim is always to harness the business in the West Country, for the West Country.

There are lots of other things we would do too. The industry changes daily, and we try to keep ourselves up to date with these changes.

We would dearly like now to form permanent bonds with those who have shown similar interest in the grant so that we may expand our experiences with others within this new industry.

Devon & Cornwall Home Inspectors Association

The surge of October - part two

In part one (above), we learnt what October 1st meant for DEAs and HIP providers working at the coal-face. Here, Brian Scannell, managing director of accreditation schemes, NHER and SAVA, shares his unique top-level overview of the market in the past couple of months, including his forward outlook.

An accreditors perspective

By Brian Scannell

The increase in report registrations started in early September and grew rapidly, peaking in w/c 6th October. There are slightly different trends in different sectors, so they're worth considering separately.

Marketed homes

The number of EPCs lodged for marketed sales in a week reached the highest level we have seen this year during w/c 6th October, but had dropped back by at least 30% by the end of the month.

Whilst a post-summer increase in listings may have contributed to the numbers, the main driver was properties without a HIP getting an EPC to comply with the Regulations.

I expect the decline in activity in this sector will continue into the winter and we will not see any recovery until early 2009.

Private rental properties

The number of EPCs lodged for private rental purposes grew very rapidly in September and early October, peaking in w/c 13th October. Since then, there has been some decline, but significantly less than for marketed sales and numbers appear to be holding up quite well.

Since this is a brand new market, we just don't know what will happen over the next few months, but it should be less subject to a seasonal downturn than the marketed sales market. It is also clear that this is a market where local relationships are important, creating an opportunity for independent energy assessors.

Social housing

The social housing market has been slower to develop, but is continuing to grow, albeit more slowly than we had anticipated. It is clear that there isn't a single preferred solution amongst social landlords and individual organisations are trying to find the solution that is right for them. As an interim measure, some are procuring EPC on a voids arising basis - some using local independent suppliers, others preferring to use national suppliers.

We anticipate that activity in this sector, including both ad hoc and large scale surveys, will continue to increase over coming months.

Newbuild

The newbuild dwelling market remains surprisingly strong. We had anticipated that the dramatic slowdown in construction activity would have been reflected in lower EPC and PEA registrations, but this hasn't happened - at least, not yet.

Home Condition Reports

The number of Home Condition Reports being lodged continues to be extremely low and is now significantly outstripped by the number of SAVA Home Condition Survey reports being lodged.

The HCS is effectively a "buyer's HCR" and is offered by some SAVA Home Inspectors. Total numbers remain low, but feedback is positive and as buyers become more discerning, there may be opportunities to increase activity.

Commercial EPCs

Commercial EPC registration activity is increasing steadily, but this is essentially a reflection of the growing number of commercial energy assessors registered with our scheme.

Comments from presenters at the recent NES conference suggested that there was more demand than capacity, but I am not aware of any formal assessment of the market having been undertaken.

I should emphasise that all of these comments relate solely to the the NHER/SAVA schemes and our perspective may be different from that of other schemes since most of our members are independents.