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New research has predicted major disruption to the property market in the months  before and after the introduction of mandatory HIPs.

 

A survey carried out amongst estate agents by HIP provider Simply HIP predicts that there will be a rise of 23 per cent in the number of houses for sale in the three months immediately prior to June 1 2007, the current start date for the mandatory scheme, as homeowners rush to put their properties on the market.

 

However, the survey also predicted that  the number of people looking to purchase property during the same period is likely to drop by 16 per cent as purchasers, especially first time buyers, try to offset the cost of buying a house onto the seller, by waiting until after June 1. And that, according to Simply HIP, amounts to potentially £6 billion worth of property not selling when compared to sales figures over a similar time period without HIPs.

 

The research further predicted that 33 per cent would delay marketing their homes for at least two months after June 1, 2007,whilst they waited to see the effects of the new legislation and the associated costs.

 

The research is telling, in the sense that it says at least as much about the misconceptions and attitudes of estate agents, as it does about the impact of HIPs on the property market, and some of the blame for this must be laid the feet of the Government. In particular, and contrary to the views of housing minister Yvette Cooper, there is no reason why sellers should not pass on the cost of the HIP to buyers, even first time buyers, and following on from ASDA’s announcement that their new estate agency will feature a free HIP (and many other agents will follow suit), cost simply wont be an issue for a significant percentage of  sellers.

 

Ultimately, the impact of HIPs on individual buyers and sellers will vary according to how well - or how badly - individual estate agents and conveyancers react to them.

 

 

 

 

 

 

 

HIPs Threaten Market Disruption