Tuesday, May 22, 2007
properties flooding market pre HIPS
Firstrung: A staggering 884,000 people claim to have put their properties on the market in the past three months in order to avoid paying for a HIP
New research from Spring, a home information pack (HIP) and property information provider, reveals that a staggering 884,000 people claim to have put their properties on the market in the past three months in order to avoid paying for a HIP. These become compulsory from 1st June 2007. The company warns that this rush of homes on to the market could lead to an increase in property prices.
Posted by converted lurker @ 11:24 AM (154 views) Add Comment
17 Comments
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1. royston said...
Let me see if I understand this:
1. Supply of houses has gone up to avoid HIPS
2. Demand for houses is shrinking is the face of rising interest rates
= Rising Prices?
I think I need to go back and study economics again because I obviously missed something!
2. Sam said...
I think the introduction of hips has showed us a few things, nothing more revealing than the fact that there isn't a shortage of houses. only that a few greedy people holding a lerger chunk of the bricks and morter.
just like the fact there's enough food for everyone but alas a few countries seem to be able to overfeed themselves at the expense of others.
3. Scott said...
Good point Royston, thought I had missed something too. And the 500,000 that have put their houses on the market is not that different to the 600,000 who would have done it anyway (2.4m/4) in the last 3 months. Or is that an extra 500,000 in which case it is a big story
4. Davros said...
Yep, supply and inverse demand. Haven't you heard of it?
5. dohousescrashinthewoods said...
Yes, I have seen this "potential rise" bandied about, but it makes no sense at all.
A flood of properties on the maret would have the opposite effect.
Someone suggested people might put houses on the market a silly prices, with no intention to sell, just to avoid a HIP later. Now that could well bump [asking] prices up.
It would also keep things looking rosy for a few months and disguise a developing crash, but would make for sharper drops when the HIP effect wears off.
Either way, it's going to be an interesting few months.
6. Papabear said...
@ royston:
Nothing wrong with your knowledge of economics. What you are experiencing is the "it's different this time" (a.k.a. "prices will always go up") theory, as put forward by estate agents, mortgaage providers and other VIs.
7. Alan said...
I don't follow the logic here. I thought the scarcity of property was supporting upward prices (Rightmove).
The HIPS were only supposed to cost £700 (ish), that's nothing on an asking price of £600,000 (my road in Essex).
Why the panic selling? I think it's people my age (late 50's) cashing in their properties as they reach retirement age. Profit taking, if you like.....
8. converted lurker said...
Looks like govt are caving into the lobbying pressure, just announced that HIPS will be put back for 'further consultation'..
9. confused76 said...
"The company warns that this rush of homes on to the market could lead to an increase in property prices"
... not worth a comment... I am waiting for these agents and self professed market expert to go unemployed after the summer... hopefully not on welfare
10. Countdown2207 said...
I think Alan has made a good point here.
I also believe that a lot of people anticipate a HPC on its way and want to cash in their properties quickly.
If "Spring's" survey would be true than that surely means we will have an oversupply of properties and sellers compete and drop their prices.
At the end instead of saving the HIP fees they will lose thousands of pounds by having to drop their asking price.
One thing is fairly sure; the UK will have to have this "Energy efficiency report" in place by January 2009 like all other EU members...
11. Papabear said...
OK, they have now "delayed" the introduction of HIPS. That should mean many properties will now be *pulled* from the market which, according to the inverse supply/demand theory, means lower house prices - hooray!
12. royston said...
Even if we suspend disbelief and accept that asking prices might inflate, there are two other factors that are relevant for actual sales prices in the short term. First, how will the desperate seller react? I mean the guy who has had his property on the market for a few months but it has sold yet. There is more supply now. Surely he must drop his price in order to attract sellers when there is so much competition. Second, in the face of so much choice buyers must be tempted to throw in a few low bids - on a 'you never know basis'.
13. Mikedx said...
Royston, to add to what you said about the seller dropping his price, we know how slimy those estate agents are. Wouldnt surprise me in the least if estate agents would deliberate not relay the low bid to the seller(s) to keep their own margins high.
14. Orwell said...
Can't be done as they themselves have a limited margin look at the reality ... 2 1/4 percent at the very best?
15. Orwell said...
The sort of reductions that will become evident will be far higher with time probably (if this happens) and we may be talking of 10 20 % ? this is simply too much for even EA's to cook!!!!
16. Ash4781 said...
I didn't realise there were so many speculators out there!
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