HIPs confusion to bring summer housing chaos
With under a month to go until Home Information Packs are due to become reality, a propertyfinder.com survey of almost 2,000 people suggests the housing market is in for a rough ride.
Most buyers and sellers have heard of a HIP
36% of the general public thought that HIP stood for Homeland Immigration Policy, while only 27% correctly identified it as a Home Information Pack. People actually buying and selling property at the moment were much better informed; with 80% of buyers and 94% of sellers picking the correct answer.
Confusion over the content
There is widespread confusion over what a HIP will contain with three fifths of buyers expecting to receive at least a home condition report, and two fifths expecting a full structural survey. They will be disappointed. Most people correctly picked the energy performance certificate, but astonishingly less than half of buyers expected evidence of title or a search, the two key legal documents in the pack.
Warren Bright, chief executive of propertyfinder.com said:
The level of ignorance in the general public is astonishing given the publicity HIPs have had over the last year, but at least most buyers and sellers have heard of them, even though they have little clue of what will actually be in the pack.
No rush to beat the HIPs
In propertyfinder.com’s April survey of estate agents, 57% reported an increase in the number of instructions they had received, while 43% said instructions had fallen or stayed the same. The number of properties propertyfinder.com listed in the last week of April was 5.4% higher than the number listed in the first week. Both these statistics are in line with normal seasonal patterns in the housing market. Furthermore, given that 93% of sellers knew that sellers will have to pay for a HIP and yet still supply has not increased beyond normal, there is nothing to suggest sellers are rushing to beat the deadline.
Warren Bright continued:
Supply has been extremely tight in the housing market for months now, but come June 1st, the number of homes coming onto the market will go into a tailspin as agents and sellers struggle to assemble all the documents needed to meet the new regulations, particularly given the acute shortage of energy assessors. Buyers thinking they will save some costs by waiting until after the HIPs deadline may find themselves fighting for a much smaller number of homes for sale - and end up paying a lot more to secure one of them. It could take months before the market returns to a more normal pattern. That will make the Bank of England’s job much harder when it comes to setting interest rates. With HIPs muddying the water, how will the MPC know how strong the underlying housing market is?”
Cost expectations for HIPs don’t reflect reality
On average, sellers expected to pay £496 for a HIP, while buyers thought they would cost £549.
Commenting on the costs, Warren Bright said:
The pricing of HIPs is still a mystery to many in the industry, not just to those selling their home. Given that most people, especially buyers, expect either a full structural survey or at least a home condition report, they will be in for a shock when they see they’ll still need to pay to see if their chosen property is in a fit state to buy.
For more information on Home Information Packs, and to ensure you're ready for June 1st, visit our HIPs Section for all you need to know.
Thank you to all of those who took part in our HIPs survey. propertyfinder.com surveyed 1,502 home buyers and sellers online on 28th and 29th April 2007. A further 301 members of the general public were surveyed in central London on 28th April.
