NAEA: Hips could cause gazumping

06 February 2006
The introduction of home information packs (Hips) could bring back the practice of gazumping, estate agents have warned.

By introducing the scheme, the supply of properties on the market could be cut, which would give buyers less choice and allow sellers to profit.

Gazumping involves sellers accepting a second offer on their property, which is higher than the initial offer made by another would-be buyer.

The warning from the National Association of Estate Agents (NAEA) comes after mortgage lenders criticised the introduction of Hips.

Under the Hips scheme, from June 2007, sellers will have to pay for a home condition report before putting their property on the market.

The NAEA warns that the scheme will alter the balance of property on the market.

"Buyers who are concerned about a lack of properties available from June 1st next year may find themselves in a gazumping situation," Peter Bolton King, NAEA chief executive, commented.

"There is also an argument that says the Hip could actually make gazumping easier. The objective of the Hip is to speed up the buying and selling process by making all the required information available at the start of the process."

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