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HIPs blamed for 37pc fall in the number of family homes up for sale
Last updated at 23:37pm on 05.10.07
Estate agents claim HIPs are driving sellers out of the market, creating a property famine (Picture posed by a model)
Home Information Packs are being blamed for a 37-per-cent fall in the number of family homes coming on to the market.
The HIPs became compulsory for homes with three bedrooms a month ago and for those with four or more in August.
Estate agents claim the regime is driving sellers out of the market, creating a property famine.
The market has also slowed down in the wake of higher borrowing costs, caused by five baserate rises in the past year and the impact of the global credit crunch.
The suspicion that HIPs are to blame is given credence by the fact the 37-percent fall is significantly higher than a reduction of 28 per cent in instructions for smaller homes.
A survey by the Royal Institution of Chartered Surveyors found 73 per cent of its estate agent members indicated a fall in the number of larger properties coming on to the market over the past month.
The proportion reporting a fall was not so great in London because the high price of property means the £300-500 cost of a pack is relatively small. Many agents in the capital are also offering free HIPs.
While the average reduction in new instructions for large properties was 37 per cent compared to the same period last year, the figure was even higher in some regions.
HIPs appear to be driving away the 20 per cent of sellers who have, in the past, put their home on the market 'on spec' to see if they can find a buyer or get a good price.
The RICS believe HIPs could cause real damage to the property market, which is fragile at the moment.
Evidence is emerging every day to show the market is cooling.
The Halifax reported this week that average house prices fell by 0.6 per cent in September and the Bank of England says home loan approvals are down by 9 per cent on last year.
RICS spokesman Jeremy Leaf said: "Although they are not the only factor, HIPs are continuing to have a detrimental impact on the housing market, in spite of assurances from the Housing Minister this would not happen."
The Government is expected to force in the HIPs regime for all homes by the end of this year. The Tories have pledged to scrap the packs.
House prices are running at more than five times the average first-time buyer's income in many parts of the country, a study has found.
Professor Steve Wilcox of the University of York found there were only a handful of areas where house prices were less than three times average incomes - the traditional multiple that mortgage lenders will offer.
Kensington and Chelsea was the least affordable area, with a house price-to-household income ratio of 9.23.
Eight other local authorities in the capital had ratios above 5.5. Sixteen of the least affordable areas were in the South West, with ratios ranging from 6.96 in Christchurch to 5.58 in West Devon.
Reader views (6)
I think the Government should have consulted more conveyancing professionals before bringing in such a ludicrous idea as HIPS. The reason the Hip providers are so pro Hips is they do not want to lose the millions they have spent on promoting it. They are claiming class actions will be brought if HIPS are abolished, by such providers, but what about the loss of income to the Estate Agents who are receiving less instructions, the conveyancers who have seen a reduction of new instructions by as much as a half of normal business, the building world and other areas who are reliant on the housing market for income, if HIPS continue. It is the worst piece of legislation for many years and if the Government want to increase popularity, then they should rethink HIPS which is actually creating delays due to the confusion of it, in the housing market and has had no impact on speed in the process. If the Government wanted to stop time wasters, HIPS was not the answer to this. Bring in a similar regime to Scotland where once your offer is accepted, the transaction becomes binding and you lose your deposit. That would have done it! HIPS can only be seen as a money spinner for the government on extra VAT income. It is a shambles!
- Lyn Lyons, Woking, Surrey, UK
HIPs cannot see the fuss about it! unless you got something to hide? Sellers are very quick to reap the rewards of inflated house prices, but not willing to help provide up to date details regarding your house...why should the onus always be on the buyer!
- Jade, London
Hips are silly. Just another tax. And more paperwork, time wasting and stress. Nobody wants them, unless you are a Hips company...
- Jacqueline, Hampstead, London
HIPS, ASBO, Communist Supporters Officers, extra taxes, loads of infrastructure misery: that is about it from 10years of labour and will not be missed when everything gets corrected by the new government! Cameron over to you!
- Stevo, Islington, London
These HIPS are a right shambles and another bad Labour project. I am trying to buy another house and these things just cost and have added nothing positive but for a lot of extra stress. The sooner they are illegal the better.
- Lordie, London
Er, so HIPs are to blame. Nothing to do with rampant housing price inflation, interest rate rises and a faltering economy, eh?
- Austen, London
