RichM Posted October 31, 2005 Share Posted October 31, 2005 (edited) 'Buyer beware' is still a wise notion Analysis of the front cover story regarding Home Information Packs (HIPs)(New law to add £1,000 to house sellers' bill) Could this be the ripple that smashes the dam? A more general concern about the introduction of HIPs is what effect it will have on the market. There is a strong possibility that it may cause a huge bubble effect, similar to that experienced in 1988 when double taxation relief was abolished. Probably too late, IMO - won't come into force until July 07, way after the big drops Edited October 31, 2005 by RichM Quote Link to comment Share on other sites More sharing options...
frugalista Posted October 31, 2005 Share Posted October 31, 2005 'Buyer beware' is still a wise notion Analysis of the front cover story regarding Home Information Packs (HIPs)(New law to add £1,000 to house sellers' bill) Could this be the ripple that smashes the dam? Probably too late, IMO - won't come into force until July 07, way after the big drops Ooh, I dunno about that RichM. Consider someone planning to buy in late 06. They might think: "maybe I will put it off till next summer so that I get more info from the seller". Especially if it is well established that prices are falling. It might just pull a few FTBs out of the market even when there are very few around? frugalista Quote Link to comment Share on other sites More sharing options...
zorn Posted October 31, 2005 Share Posted October 31, 2005 'Buyer beware' is still a wise notion Analysis of the front cover story regarding Home Information Packs (HIPs)(New law to add £1,000 to house sellers' bill) Could this be the ripple that smashes the dam? Probably too late, IMO - won't come into force until July 07, way after the big drops No, it won't cause a bubble. If anything, it will put some downward pressure on prices. The difference is that in 1988, buyers had to complete their purchase by a deadline in order to get the tax benefit. With HIPs, vendors have to put their property on the market. Quote Link to comment Share on other sites More sharing options...
Swipe Posted October 31, 2005 Share Posted October 31, 2005 (edited) HIPs may protect the buyer from the costs of being gazumped but they will encourage gazundering. Buyers will have no survey fees to lose if they decide to drop their offer price at the last minute and they are knocked back by the vendor. Edited October 31, 2005 by Swipe Quote Link to comment Share on other sites More sharing options...
Guest Posted October 31, 2005 Share Posted October 31, 2005 Buyers having no survey fees to lose is completely fair IMO. Last minute price changes by either party? Well, it's allowed in the law, because it's supposed to be a free market. Fair enuff. This change is good. Quote Link to comment Share on other sites More sharing options...
Fancypants Posted October 31, 2005 Share Posted October 31, 2005 Buyers having no survey fees to lose is completely fair IMO. Last minute price changes by either party? Well, it's allowed in the law, because it's supposed to be a free market. Fair enuff. This change is good. Agreed: notwithstanding my FTB bias. It suggests that the burden of the transaction costs will move from buyer to seller. This seems like a good long-term move to make speculation & flipping more difficult next time out. Of course, it will accelerate the crash somewhat and will no doubt be used as a convenient scapegoat by VIs for the same. Some vendors may try to increase prices to compensate for the additional costs, but they would find this like trying to build a wall on a mudslide. Quote Link to comment Share on other sites More sharing options...
Father Fred Posted October 31, 2005 Share Posted October 31, 2005 HIPs may protect the buyer from the costs of being gazumped but they will encourage gazundering. Buyers will have no survey fees to lose if they decide to drop their offer price at the last minute and they are knocked back by the vendor. The flipside to this is that HIPs should speed up the buying and selling process making it easier for vendors to tell buyers to get stuffed if they try to gazunder (they haven't spent so long getting to that point, and it won't take as long to get there again). Assuming the market allows them to tell them to get stuffed of course... Also, vendors often drop the price because a survey has pointed out something that the buyer did not know about (or claims he did not know about) when the offer was made. If the buyer is aware of the full facts when he makes the offer he is basically saying "I am an arsehole who's trying it on" if he tries to gazunder, whereas in todays market the vendor could give the buyer the benefit of the doubt. Quote Link to comment Share on other sites More sharing options...
theChuz Posted October 31, 2005 Share Posted October 31, 2005 The flipside to this is that HIPs should speed up the buying and selling process making it easier for vendors to tell buyers to get stuffed if they try to gazunder (they haven't spent so long getting to that point, and it won't take as long to get there again). Assuming the market allows them to tell them to get stuffed of course... Also, vendors often drop the price because a survey has pointed out something that the buyer did not know about (or claims he did not know about) when the offer was made. If the buyer is aware of the full facts when he makes the offer he is basically saying "I am an arsehole who's trying it on" if he tries to gazunder, whereas in todays market the vendor could give the buyer the benefit of the doubt. They are some fair points FF (where you been hiding btw?, welcome back) although i still prefer the Pack form a buyers point of view. The buyer will end up paying for the pack ( it will just get added to the sale price) but atleast your (buyer) not paying for a survey along with other FTB'rs. it will make it easier to walk away as a ftb'r. I see them as a good thing for both parties, slightly in favouor of the ftb'r. Quote Link to comment Share on other sites More sharing options...
Swipe Posted October 31, 2005 Share Posted October 31, 2005 Does anyone know if a HIP will be required to sell a residential property in an auction? No one I ask seems to know if they are required or not. Can anyone here shed any light on this? Quote Link to comment Share on other sites More sharing options...
Goat Posted October 31, 2005 Share Posted October 31, 2005 The real problem with these HIPs is that they will be of little real use. They will not include a valuation which means that most mortgage lenders will require another survey anyway duplicating the work. Much better a system where if the seller pulls out (after accepting an offer) he is obliged to meet the buyers costs. Quote Link to comment Share on other sites More sharing options...
tonytramcar Posted October 31, 2005 Share Posted October 31, 2005 Does anyone know how long the HIP will be valid for ? Will it have to be renewed after a specified period? This could become very costly ! Quote Link to comment Share on other sites More sharing options...
Once in a lifetime Posted November 1, 2005 Share Posted November 1, 2005 Does anyone know how long the HIP will be valid for ? Will it have to be renewed after a specified period? This could become very costly ! How long is it valid?If a home is taken off the market and put back on at a later date, the pack must not be more than three months old. However, parts of the pack - such as local authority searches - could be out of date if houses take more than a few months to sell. http://www.telegraph.co.uk/news/main.jhtml.../01/ixhome.html Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted November 1, 2005 Share Posted November 1, 2005 Does anyone know if a HIP will be required to sell a residential property in an auction? No one I ask seems to know if they are required or not. Can anyone here shed any light on this? I was wondering that too. Mind you some auction property already has an information pack prepared that has far more information than you would get from an open sale at the moment, including local searches, plans and planning applications. Quote Link to comment Share on other sites More sharing options...
r thritis Posted November 1, 2005 Share Posted November 1, 2005 It will be quite interesting to see how the transistion from the old to the new system will work. Will all owners already on the market at the switchover date suddenly have to go out and get a HIP? What if you are 'Sale agreed' at the switchover date? I think this will create downward pressure on the HPI during 2006/2007. It is totally different from the MIRAS change back in 89 which put pressure on buyers to complete, forcing the market higher. This time, the boot is on the other foot -the pressure will be on the seller to complete before the deadline. Then again- shouldn't get carried away, the change is probably only worth about a grand in total, so the effect may not be significant. Quote Link to comment Share on other sites More sharing options...
Fancypants Posted November 1, 2005 Share Posted November 1, 2005 http://www.telegraph.co.uk/news/main.jhtml.../01/ixhome.html if it becomes outdated relatively quickly, then this is an additional incentive for vendors to price realistically. There's no point them stubbornly clinging on to a high price with no serious offers if they only have to keep renewing the HIPs at not inconsiderable expense. It seems likely that this will add a little dash of liquidity to the market. A good thing, especially as the illiquidity is more noticable on the way down! Quote Link to comment Share on other sites More sharing options...
Once in a lifetime Posted November 1, 2005 Share Posted November 1, 2005 if it becomes outdated relatively quickly, then this is an additional incentive for vendors to price realistically. There's no point them stubbornly clinging on to a high price with no serious offers if they only have to keep renewing the HIPs at not inconsiderable expense. It seems likely that this will add a little dash of liquidity to the market. A good thing, especially as the illiquidity is more noticable on the way down! That was exactly my thinking, when I have said in the past here, that HIP could Affect prices. (Not all house prices… but some.) There is a hell of a lot of misinterpretation in the press lately on HIP. Almost as much misinterpretation as SIPP is getting. Quote Link to comment Share on other sites More sharing options...
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