Fri, 09 Nov 07
HIPs continue to have an adverse effect on the housing market, claims the NAEA....
A survey of members conducted by the National Association of Estate Agents (NAEA) has produced the largest response ever to one of its surveys with over 1000 replies indicating what a contentious issue HIPs still are.
Over the past 10 days members were asked to compare the market this October to the same time last year. The results show that 83% of agents have found that requests for market appraisals have dropped with 9% of respondents finding a reduction of more than 50%.
When asked about the change in the number of instructions for 3 or more bedroom properties, a staggering 76% stated that they had seen decreases in excess of 10% of which 46% had seen a drop in excess of 30%. This compares with a much smaller reduction for 1 or 2 bedroom properties with 37% of respondents finding a drop of more than 10%.
Sellers try to ‘beat the HIP’
Peter Bolton King, Chief Executive of the NAEA, comments: "Clearly everyone accepts that there are a number of financial and economic factors that have caused the market to take a breather after 7 hectic years. However, these figures show that there is an anomaly between instructions on properties where a HIP is required and where one is not."
He continues: "I have heard of many examples where potential sellers have decided against putting their property up for sale because they do not want to risk wasting £300 or indeed much more, if they decide not to sell.
It has been correctly stated previously that many sellers decided to ‘beat the HIP’ by marketing their property before August 1st 2007. It would therefore be reasonable to think that there would be a lull for a few months thereafter.
The NAEA therefore asked members how available stock levels were year on year - 76% of the 1050 respondents stated that in October their stock was either the same or less.
Peter explains the significance of this: "At this stage of the market cycle, with sales slowing and normally a traditional autumn bulge in instructions, it would be normal to expect stock levels to be significantly higher. The fact that only 24% are saying that this is the case should worry the Government as this is just not normal. This once again appears to show the adverse effect HIPs are having on the market, the lives of consumers and indeed the overall economy."
No added value
The survey then went on to ask the question of ‘What should happen to HIPs next? The NAEA survey gave several options of ways to move forward including the full roll out of HIPs.
However, only a tiny 6% felt that this was the right option with 76% stating that HIPs should be scrapped but Energy Performance Certificates should instead apply to all properties.
Peter says: "Despite the fact that agents have now had an opportunity to work with HIPs it is clear that the vast majority of respondents do not believe that they add value to the process and are finding it hard to get purchasers to take interest in them. We feel very sorry for the many Domestic Energy Assessors who are waiting for the opportunity to earn a living.
As a result we again call on the Government to take into account the above evidence and to reflect on the potential increased damage to the market if they roll HIPs out across all properties.
We would urge the Government to take the opportunity to review the situation and find a quick way of enabling the Energy Performance Certificates to be applied to all properties without the need for a HIP."
Time to rely on hard facts
In response to the latest NAEA survey on Home Information Packs (HIPs), which suggests that HIPs have had an adverse impact on the market, AHIPP is calling on the industry to demand facts not fiction.
Paul Broadhead, Deputy Director General, Association of Home Information Pack Providers (AHIPP) commented: It is not surprising that the NAEA’s latest survey has highlighted, yet again, that agents want HIPs to be abandoned. The NAEA has made its negative position on packs very clear and as a result its blaming of any market disturbance on their introduction is highly predictable, forming an obvious part of its futile campaign to get packs scrapped.
Instead of making judgement on the anecdotal feedback from 1,000 of the NAEA’s members, I would urge Government and the industry to rely on hard facts. For example, in the Halifax House Price Index issued today, house prices fell 0.5% in October, continuing the ‘steady downward trend experienced since the end of 2006’. Its index makes no reference to HIPs and with the packs not introduced until August this year, provides a clear indicator that packs are not the reason for the current slowing in the market.
With the ongoing credit squeeze, the first run on a bank since the depression and three interest rate rises since the beginning of the year it is not surprising that the market has experienced some turbulence. I do not accept that a charge of roughly £300 for a HIP will really stop someone deciding to sell their property. The Government now needs to take the essential next step and extend HIPs to the entire market so that consumers can begin to realise the positive changes they have been implemented to achieve.
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