Hips effect 'could push up house prices'

The introduction of home information packs (Hips) could diminish wait-and-see sellers and push property prices up, it has been claimed.

Research from the National Association of Estate Agents (NAEA) revealed that almost 20 per cent of homeowners would consider putting their home up for sale to test the market if their neighbour had got a good price, even if they hadn't previously planned to sell.

According to the NAEA, the introduction of compulsory Hips on June 1st will impact this group, with less sellers likely to want to pay up to £500 for a pack before they can test the market.

The organisation said that this could ultimately reduce the supply of houses on the market, causing it to slow down and increasing property prices.

NAEA chief executive Peter King commented: "A significant percentage of sales that go through start with a seller 'testing the water'. The lack of ability to do this without paying for a Hip first is likely to put many sellers off."

The association has previously confirmed that a shortage of properties on the market relative to demand in many parts of the UK was one factor pushing up house prices in March, which could be good news for buy-to-let investors seeking capital growth.

Landlord Mortgages, leading Buy To Let Mortgage Broker comments “Landlords are investing for the long term i.e. retirement. Any short term appreciation in value due to Home Information Packs is of no real interest to the landlord, the landlord is looking for long term sustainable growth and a healthy rental market.”

LettingAgent.com comments “Rents are likely to increase sharply this year as interest rates rise and make it harder for landlords to borrow significant amounts (Buy To Let Mortgage borrowing is based on achievable rental yields). The introduction of Home Information Packs will only make things worse for those seeking rented accommodation.”



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