HIPs hiccup for housing?

Recent research predicts that the number of houses for sale in the three months before June next year will increase by 23% as householders hurry to put their properties on the market before the introduction of HIPs (Home Information Packs) on June 1.

A HIP will be required after June 1 2007 by every residential home seller before they will be legally able to market and sell their property. The contents of the pack will have to include a report on the physical condition of the property, terms of sale, evidence of title, planning consent, sellers' property information, replies to searches and warranties & guarantees. Historically, this information was not required to be able to put a house on the market and was also paid for by the purchaser after their offer had been accepted.

The cost of a HIP is estimated to add anywhere from £600 to £1,000 onto the price of a house; for larger houses the cost will be considerably more.

However, the number of people looking to purchase property during the same period, March, April & May 2007 is predicted to drop by 16% as purchasers (especially first time buyers) try and offset the cost of buying a house onto the seller, by waiting until after June 1st. This equates to £6 Billion worth of property potentially not selling compared to a similar time period without HIPs.

The research also showed that 33% would not market their homes for at least two months after June 1 2007 and the introduction of HIPs as they would prefer to wait to see the effects of the new legislation and the associated costs.

The survey also found that 51% of those interviewed were unaware of the introduction of HIPs; 62% did not know at least three of the components of a pack (HIP); and 55% did not know what the initials HIP stood for (Home Information Pack).