"Abolish HIPS" say Estate Agents
As the government announced the roll out of HIPs on all homes by December 14th, propertyfinder.com’s survey of 842 estate agents reveals just what a shambles the legislation has been so far. HIPs, which are already compulsory in the home selling process for homes with three or more bedrooms, will be introduced on all homes from mid December.
70 per cent of estate agents think that HIPs have disrupted business, and 84per cent of them want the legislation abolished altogether. Instead the government is doubling the number of properties caught by the legislation. Estate agents say that 51 per cent of sellers do not know they need a HIP when they instruct the agent to market their property. Furthermore, a fifth of this group of sellers are put off marketing their property because of the extra hassle and cost involved.
This move is going to impact upon the very people Yvette Cooper has today pledged to help with affordable housing. The people who live in one and two bed homes are on lower incomes and will be deterred by the extra £350 cost of a HIP (average cost across all agents surveyed). The cost varies very little according to the size of the property so is a disproportionately large expense for smaller, less valuable homes. This is likely to constrain supply of first-time buyer property.
42 per cent of buyers do not know what a HIP is and don’t find the information contained useful, whilst a further 51 per cent know what a HIP is but don’t rely on it. That is a massive 93 per cent of buyers who find a HIP unhelpful - sellers are effectively paying £350 for nothing.
Warren Bright, chief executive of propertyfinder.com said: “Estate agents across the country can see HIPs are simply not delivering and want them abolished. Sellers don’t know what they are and buyers ignore them. Now this discredited scheme is being extended to all properties, the confusion will only deepen. For the government to be heaping new burdens on the property market at a time when it is already feeling some strain is beyond belief. The government should leave the housing market alone, not tie it up in red tape.”
Comments
I do not understand why EAs are so against HIPS. I often hear EAs bleating that the public have no interest, but what if a Hip turned up problems with searches or ownership. perhaps the EAs prefer the purchaser to find out at the end of an expensive and time consuming process, that way, the purchaser may be more inclined to accept possible problems, and a sale maybe unaffected. The purchaser has previously paid more for this essential information through their solicitor, and changing the system benefits and further protects the purchaser. should the estate agent grasp this, it may result in the public having a better overall opinion of EAs. The answer is simple, if you dont like HIPS then refer your customers directly to their solicitors, who are also responding to the competition and providing fast accurate Hips and competing with the HIP Panels. Change is always difficult to accept but apart from the EPC we have always paid more for these services and it has always been at the wrong stage of the process. Granted, the up front fees can be higher but many Providers are now offering to implement the charge when the sale is complete.
Posted by: Steve Garner | May 1, 2008 10:21 AM
Consider this. I lived in an estate in Derbyshire consisting of very sound and 'affordable' housing but built with poured concrete. Sound as a medieval castle but energy efficient NO! The EPC not only gives it the lowest rating possible but shows that it cannot be improved beyond that rating.
Buyer can't get a mortgage. Seller has to stay put or sell at a ridiculously low price to a developer who bides his time by buying up the estate and then demolishing it and putting 2 or 3 times as many houses on the same ground, including of course the 'obligatory' - 'affordable' homes at 2 to 3 times the price of the original dwelling. Who gains? Estate Agents, Local & National Government (various taxes) and of course the developer. Who loses out - first the original owner who is trapped already in the cheapest housing and then the priced out of the market first time buyer.
Posted by: Bruce Baker-Johnson | May 15, 2008 11:31 AM