Are
HIPS Distorting the Housing Market ?
The average house price in the United
Kingdom increased by 2.7 percent last month, the
strongest rise in 6 months, with the average price
of a home in England and Wales reaching £241,642.
It is considered that this "distorting effect"
is largely due to the Government's controversial
introduction of Home Information Pack (HIPs),
as owners of 3 bedroom properties registered their
homes for sale before the deadline which made
it mandatory for sellers to pay for surveys.
HIP packs were introduced for sellers of properties
with 3 bedrooms from September 10 and homes marketed
before this date did not require one of the packs,
they were initially launched for homes with 4
or more bedrooms from the beginning of August.
The packs are required to contain information
about a property, including title deeds, local
searches and an energy performance certificate
(EPC).
The Government has yet to confirm when HIPs will
become compulsory for all residential sales, but
it is predicted that completion of their introduction
will take place before the end of this year.
The latest price report by Rightmove indicates
that the number of 3 bedroom properties for sale
increased by 65 per cent in the first week of
September and, during October, the average asking
price of a UK property rose to £241,642,
up from £235,642. This rise reversed the
asking-price decline of 2.6 per cent reported
in August and pushed the rate of annual growth
back up, to 10.4 per cent.
HIPs will undoubtedly continue to unbalance the
market creating unusual peaks and troughs. However,
other factors have also had an effect recently
such as, the economic climate, a series of interest
rate rises, turbulence resulting from the credit
crunch and the effect on Northern Rock.
Stephanie Reid
Marketing Manager
The Buy to Let Business
