Housing market is taking a real hit from the new HIP...

Sep 4 2007 by Helen Logan, Evening Gazette

WELCOME to our comment column, in which leading figures from the region present a thought-provoking view on an issue affecting their company or organisation or the wider community. Today it’s the turn of GORDON CATTERICK, director of Sanderson Estate Agency.

LITTLE has been said about Home Information Packs since their launch.

However, having observed the market for the last four weeks, I have concluded that the cost of the HIP is already deterring home owners from putting their four-bedroomed properties on the market.

In the first month since the launch of HIPs, Sandersons Estate Agency has been instructed to prepare only one pack, despite having seven offices across County Durham and North Yorkshire serving areas such as Stokesley, Richmond and Darlington.

The cost of the HIP is obviously making people think very carefully before putting a property on the market.

And the reason for this - if the property does not sell, the vendor still incurs a cost of up to £500.

At the same time, the environmental credentials of this new pack must be questioned.

The idea behind the HIP was originally to speed up the process of buying a house and to prevent gazumping.

When this proved impractical, the Government jumped on the green bandwagon and much has been written about the inclusion of the Energy Performance Certificate.

However, how ‘green’ is it if an estate agent is asked to print off an entire document of more than 65 pages for a number of prospective purchasers?

The HIP was launched on August 1, 2007. Since then, every home with four or more bedrooms which has been put on the market must first provide a HIP.

Properties which were marketed prior to the beginning of August are exempt.

As well as the Energy Performance Certificate, the pack includes a sale statement, searches and the evidence of title.

The HIP costs between £300 and £500.

Furthermore, on August 17, the Government announced its intention to extend HIPs to include the mass market of three-bedroomed homes from September 10, 2007.

As yet there has been little hostility towards HIPs, but this will happen.

The majority of estate agencies are offering a deferred credit arrangement with payment for the HIP being made on completion of the property sale.

However, if a house fails to sell and is then withdrawn from the market, the vendor will receive the bill for the HIP.

That is, the home owner incurs a considerable expense for an unsold house.

The summer holidays have obviously slowed the housing market but there is a definite sense that HIPs have put a halt to people speculating on the sale of a property.

With vendors unwilling to take a £500 gamble, and the HIPs shortly being extended to include the mass market of three-bedroomed homes, the housing market will definitely take a hit!