Rush to beat HIPs deadline creates dip in house prices
14th Feb 2008
The rush to beat the deadline for extending Home Information Packs (HIPs) to homes of all sizes saw a surge in the number of small properties being put up for sale in November and early December.
It led to a fall in house prices according to a survey carried out by the property website, Rightmove.
HIPs were introduced for four bedroom houses in August and then for three bedroom homes in September. The scheme was extended to properties with two or fewer bedrooms on 14th December.
Rightmove says that in the first week of December 2006, 38% of properties coming on to the market had two or fewer bedrooms. That jumped to 48% over the same period in 2007 as people selling smaller properties tried to beat the deadline for acquiring HIPs.
The Rightmove survey examined more than 100,000 properties put on the market between 11th November and 8th December 2007. The average asking price fell by 3.2% compared with the previous month. Two thirds of the fall was due to seasonal factors as the period before Christmas is traditionally quiet but the rest of the fall was down to the sudden surge of cheaper properties being put up for sale at the same time.
Miles Shipside, Commercial Director of Rightmove said: “New listings are very low at this time of year, so the artificial wave of ‘low-end sellers’ has really distorted the average prices of new properties coming on to the market.”
Rightmove says the January figures are also likely to be down but February should bring a rebound because the HIP effect should have worked through the system by then.