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Shahla
Money Managing Guru
Joined: 13 Nov 2004
Posts: 3324
Cash Points ££ 126163.28
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 Posted: Fri Nov 23, 2007 6:02 am Post subject: HIPS to Freeeze Transactions and Hit UK House Prices |
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: Nadeem_Walayat
The British Government's decision to expand the requirement for ALL UK Home Sellers to provide a Home Information Pack as of 14th December 07, will likely result in a big freeze on transactions hitting the UK housing market from 14th December 07. As fewer properties are put onto the market and thereby less transactions take place. Whilst this could be construed as being short-term supportive of house prices, it will hit the housing sector hard, which includes mortgage lenders and estate agents that could see as much as a 25% drop in business over a short space of time, and therefore the expectations are for further shocks in the housing and financial sector, this time focused on estate agencies.
The HIPS had been originally planned to come in force during June 2007, but have been delayed and staggered in the rollout due to industry concerns and lack of qualified energy assessors.
However after the initial slump in transactions, this extra cost of approx £500, associated with selling properties will lead to a further deflationary effect on the UK housing market as Home Buyers will still have to conduct their own surveys before mortgages would be approved. Especially as HIPs do not contain a compulsory home condition report.
The Home Information Packs (HIPs) were ironically introduced to increase the speed of transactions in the Housing market as each potential buyer would no longer need to conduct expensive repetitive searches on the same property before discovering potential problems that could lead to the sale falling through.
The HIPs packs include the following compulsory documents:
Home Information Pack Index
Energy Performance Certificate
Sale statement
Standard searches
Evidence of title
Additional information for leasehold and common hold sales, where appropriate.
Additional optional documents may be included such as flood risk search and home condition survey report. Sample
The current consensus forecast is now for a stagnating UK housing market during 2008. The expectation is that as house price declines occur, this consensus will eventually change to recognise a declining housing market in line with the Market Oracle forecast of a targeted 7% drop during 2008 and a 15% drop over 2 years.
UK Housing Market Forecast for 2008-09 - As of 22nd August 2007
UK House Prices to fall by 15% over two years, falling prices to be accompanied by cuts in UK interest rates. (22nd Aug 07),
1st May 07 - UK Housing Market Heading for a Property Crash
25th Sep 07 - UK Housing Market on Brink of Price Crash - Media Lessons from 1989!
28th Oct 07 - UK House Prices - Primary Reasons For a Sharp Fall
10th Nov 07 - Crash in UK House Prices Forecast for April 2008 As Buy to Let Investors Sell on Capital Gains Tax Change
http://www.marketoracle.co.uk/Article2859.html
By Nadeem Walayat
Copyright (c) 2005-07 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved. |
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