The second phase of the HIPs attack starts today as they become mandatory for three bedroom houses, but this will have a negative knock on effect on the three bedroom market, says the National Association of Estate Agents.
The introduction of Home Information Packs for four bedroom properties came into force at the beginning of August, and the NAEA is expecting to see a similar adverse reaction in the three bedroom property market as they saw in the four bedroom one last month.
In the wake of the first phase, the NEAE found that the four bedroom plus market decreased considerably. 63 per cent of estate agents reported a decrease in properties coming on the market, with an average decrease of 37 per cent, and the introduction of HIPs was cited as the primary reason for the drop, as homeowners are playing avoidance tactics by staying out of the market altogether.
Peter Bolton King, Chief Executive at the NAEA, comments: “Our concerns have always been that the introduction of HIPs would lead to a lack of supply following implementation. This does indeed seem to be the case with four bedroom homes and is now likely to be replicated in the three bedroom homes market. The next few months will prove crucial in seeing whether HIPs are going to cause the sort of problems we feared.”
The average price of HIPs being paid by NAEA members is £350, which implies that they are being put together without the voluntary home condition report – one of the only potentially useful aspects of the pack other than the energy performance certificate, according to the NAEA.
HIPS have prompted strong reactions amongst agents across the country, with one MAEA member commenting: “The introduction of HIPs is currently having a severe adverse effect on our market place. We dread to think what will happen as HIPs for three bedroom properties and other homes come into force.”
Trevor Kent, former President of the National Association of Estate Agents, believes HIPs have caused a 50 per cent slump in the number of houses going on the market and harbours similar sentiments regarding their negative impact and effectiveness: “It doesn't do what the government said on the box it would do. It does not speed up house sales, it does not help first time buyers, it does not lessen gazumping, it does not improve the green credentials of the housing stock.”
Learn more about Home Information Packs