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HIPS to devastate the UK housing market
Added: (Tue Jul 11 2006)
Home Information Packs (HIPS) are set to devastate the housing market by restricting the supply of available stock, in a market where demand is already outstripping supply.
Introduced, so it is often claimed, to speed up the Conveyancing process and save the buyer money, it is becoming increasingly obvious that this is an ill thought out piece of statutory legislation which will benefit nobody but the Government and the fly by night companies that have sprung up overnight to make money from it.
There is no where near the required number of inspectors needed to carry out the inspections, and at the rate at which they are being qualified a huge shortfall is predicted.
Worse still, there is still no statement from the lenders that they will accept the home inspector’s reports as sufficient to offer a mortgage, without a further property survey that will be paid for by the purchaser.
What this all amounts to is meddling in a market which has been fine up until now - the saying "if it aint broke, don’t fix it" is very apt in this situation.
It has been said that the legislation is designed to stop the practice of vendors putting their property on the market to see what it is worth, then withdrawing it after an offer has been received, which is supposed to be costing the innocent would be purchaser time and money.
Question is how is HIPS going to cure this, and an even bigger question is whether the problem is sufficiently large to justify this huge sledgehammer piece of legislation.
It beggars belief that anyone would put their property on the market, and :
1. have a board in the garden to advertise to burglars that they can get details of the target property from a local estate agent before attempting an entry one night (after observing the property for a while)
2. put up with the inconvenience of would be purchasers viewing it at all sorts of hours, and upsetting the family routines while it goes on
3. have to live their life without all those necessities that have been packed away to de-clutter the place to make it appear larger
4. listen to the negative comments of the not so impressed
5. have to keep the place constantly tidy
6. get a reputation with the local agents as a time waster
and all to see what it might be worth if they did decide to sell.
If truth be told, the real reason the vendor has taken their house of the market is probably because the estate agent overvalued it in the first place, and now wants a big reduction to get a fast sale so he can make his commission.
If any legislation is needed it should be aimed at the dubious practices of the estate agents that are still the only part of the whole property transfer market that is not under government control.
The biggest probable effect of HIPS (at a cost of about £1000 a hit) will be to put £1000 on the price of every property that goes up for sale.
I sold a house once that had dodgy DIY central heating (I know cos I did it myself), internal subsidence (covered up by a fresh layer of render and plaster), unprotected wiring (discovered during the replastering) that was very, very old and rotten (red, black and green colour codes) and woodworm infestation in the loft (hidden by nailing shut the loft entrance so the surveyor couldn't get in.
The buyer had a building survey carried out by a RICS surveyor (copy to the mortgage lender) and he didn't pick up on any of it.
How the hell is a newly trained HIP inspector going to do any better than that, and what happens when the new buyer discovers the problems, whose going to be liable?
"Buyer beware" has been around a long time - HIP legislation is not going to change that, simply add another layer of bureaucracy in to the mix, with the only losers being both buyer and seller.