Money news: Plans to make house buying simpler are gutted in 'shambles'
Sunday 23 July 2006
The introduction of home sellers' packs in 2007 was left in disarray last week after the Government shelved a key part of the new scheme.
The Home Information Pack (HIP) - a document containing survey information, an environmental report and details of local searches and deeds - has long been touted as a way of speeding up housing chains. The idea is that by shifting the responsibility for compiling this information away from the buyer, at a cost to the vendor of £600 to £1,000, problems won't emerge at a late stage that hamper the sale.
In particular,the reform has been advocated as a way of helping struggling first-timer buyers, who are the lifeblood of the housing market.
But last week, after months of pressure from critics including lenders and estate agents, who argued that the scheme would prove a costly disincentive to selling, the Housing minister, Yvette Cooper, announced that the packs would no longer require a compulsory Home Condition Report (HCR).
This report, a de facto survey, would have included physical details of the property although leaving out important information such as the state of the home's wiring and any subsidence risk.
The U-turn leaves the packs containing nothing more than the deeds, a new energy certificate on how "green" the property is, and local authority searches.
In a statement to the House of Commons, Ms Cooper said the decision was down to fears of a "big bang" introduction with "potential disadvantages to consumers".
Opposition MPs branded the Government's decision "a complete shambles" (see page 18).
The launch will still go ahead on 1 June 2007, Ms Cooper said, but without the HCR as a compulsory element.
Fee-charging ATMs: Low earners left to pay for their cash
Many deprived parts of Britain are becoming "deserts" for free ATMs, and are populated instead with cash machines that charge fees of up to £3 per withdrawal, according to a report by Citizens Advice.
Many people on low incomes were being hit hardest, it said, as they had no choice but to pay when their nearest free cash machine was several miles away.
Chapeltown, Leeds - one of the poorest parts of Britain - has 10 charging ATMs but no free ones.
Fee-charging machines have a "disproportionate impact" on people claiming benefits as these now go directly into bank accounts instead of being withdrawn over a post office counter, the report said.
The Government began paying benefits in this way to cut costs, but those costs were being passed on to the claimants, it said.
While the average cost per withdrawal is £1.50, some machines levy as much as £3. The UK has 58,000 ATMs, of which 43 per cent now charge.
The growth of fee-charging machines is down to banks not getting enough business from poor areas to justify the installation and maintenance costs, and the preference of retailers for the more lucrative deals offered by operators of fee-charging ATMs.
David Harker, the chief executive of Citizens Advice, warned that the problem was growing. "People on low incomes often need to take out small amounts of money and more frequently; they should not be penalised as a result. "Rural communities are among the worst affected: people may have to travel miles to the nearest free machine."
The charity is calling on banks to guarantee that there won't be any further reduction in the number of free cash machines in deprived areas.
HSBC recently said it was looking at placing new free ATMs in areas where there aren't any at present.
Investment: 52 funds have gone to the dogs
The number of poorly performing investment funds is up by more than a third, according to research by independent financial adviser (IFA) Bestinvest.
There are now 52 funds that have let down investors - up from 38 in January, it said.
Among the managers named and shamed in its biannual Spot the Dog report are Prudential with its UK Growth fund (managed by M&G); Henderson's Growth and Income; and St James's Place and its UK & General Progressive.
To qualify for "dog status", a fund must have failed to match the benchmark return in its investment sector in each of the past three years. It must also have underperformed by at least 10 per cent.
Bestinvest points out that, despite its findings, fund managers are not necessarily getting worse. "Historically, the number of dog funds tends to fall when volatility is low, and rise when it is higher," said its spokesman, Justin Modray.
Star managers are not immune to underperformance, he said, citing the recent stock market falls that wrong-footed many.
"Investors should not always ditch dog funds, but they need to have a good reason for holding on to them," he stressed. "For example, a poor manager may recently have been replaced with a better one, or a skilful manager may have simply had a poor short-term run."
To check which funds have been doing poorly, a free copy of the report is available from 0800 093 0700.
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