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renter1

Buy Before Summer 2007

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Thats the advice i have been given by STRers and home owners all citing the Home information pack, surely a document costing £1,000 cannot trigger a crash or prevent it?

Based on my personal circumstances and advice I am planning to buy in 18mts time, anyone got the same plan? Im a FTB

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..... the Home information pack, surely a document costing £1,000 cannot trigger a crash or prevent it?

My view is that it will push up HPI.

Why?

Only people who are 'determined' to sell will be prepared to fork out for the pack.

And?

Reduced supply, same demand, prices up.

I'm sure Dr Bubb could explain it better, though.

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My bet is the HIPS U-Turn will come. Remember SIPPS, and that HIPS have been spoken of for generations and not yet implimented. Why is now any different - spin city.

Lets have a vote.

My view is that it will push up HPI.

Why?

Only people who are 'determined' to sell will be prepared to fork out for the pack.

And?

Reduced supply, same demand, prices up.

I'm sure Dr Bubb could explain it better, though.

If these people are desperate to sell then the market will favour the buyer. Builders and BTL's will be in the selling camp when the money tree tightens.

So they'll be typically deceptive but with less cash we'll have to wait and see.

Edited by music man

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Thats the advice i have been given by STRers and home owners all citing the Home information pack, surely a document costing £1,000 cannot trigger a crash or prevent it?

Based on my personal circumstances and advice I am planning to buy in 18mts time, anyone got the same plan? Im a FTB

Buy right now, as a buyer there is no advantage in having the seller pay for a pack detailing all the problems with their property, much better to be out of pocket and have your own solicitor do that for you 4 weeks into the process. ;)

The National Association of Extortion Agents dislike HIP's, it means they can no longer act daft and blatantly lie about the property without the fear of being sued. They really don't like the idea, so obviously it can only be a good thing.

Edited by BuyingBear

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If these people are desperate to sell then the market will favour the buyer. .

No. It will become "offers over £xxx,xxx" then sealed bids. Just like at the top of a market. Only this will be "forever".

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No. It will become "offers over £xxx,xxx" then sealed bids. Just like at the top of a market. Only this will be "forever".

I think you're confusing it with the Scottish system, nothing will change apart from getting more detailed information up front before you even put an offer in.

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I'm not convinced by the claims HIPs will reduce the number of sellers. After deleting the content of a long and rambling previous version of this post, HIPs will make the process easier for buyers. And, anything that makes the process easier for buyers will also make things easier for sellers as there will be easier for sellers to sell their houses. While this would be one factor that might otherwise boost the price of a house, I believe that it is too small a factor to make a big difference. The availability of credit and the general perception of how much is sensible to pay for a house (whether rational or not) will always be a bigger influence on prices than the small pressure of HIPs.

As an analogy, I usually prefer to use public toilets that are pay toilets rather than free ones. Typically pay toilets are better maintained by an attendant than free ones.

Billy Shears

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Logically if one third of sellers disappeared off the market that means they are no longer buyers either, so less sellers = less buyers.

It's supply and demand with a subsequent drop in demand from people staying put, I can see why lower volumes might upset agents, but stamp duty is already a tax on mobility far in excess of HIP's.

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HIPs may take some sellers out of the market, but only those sellers who were not serious players, and were therefore not affecting the market value.

The argument is a bit subtle but please bear with me:

Let's suppose you have 8 buyers who are all looking for a property in the next 2 months. You have 12 sellers with identical houses who all want to move in the next 2 months. The sellers must compete against each other by lowering their prices. The 4 sellers who end up with the highest prices will miss this chance to sell.

If you reduce the pool of competing sellers to less than 8, then it is the buyers who must compete, by outbidding each other, so as to not be one of the buyers who misses the boat. This is the argument that says introducing HIPs will remove sellers and therefore raise prices.

What kind of seller would cancel their sale for the sake of a £1000 HIP? Surely only someone who was not very serious about moving anyway. If you are not serious about moving, you are not going to compete with other sellers by undercutting their prices.

If the original pool of sellers contained say 2 non-serious sellers who were refusing to compete (e.g. they were "testing" the market), then the effective balance was already 10 sellers to 8 buyers, rather than 12 to 8. So removing these non-competing sellers will not affect the market price.

It might affect the "asking" price (downwards), but the asking price is not really of much consequence to anyone.

frugalista

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I doubt it will affect the market at all really. It might be an advantage to sellers, particularly where there are problems, since they will be able to either get them fixed or fight their corner as they are putting it on the market on the basis of exactly what is there. BuyingBear is right. If Stamp Duty isn't a dampener (and it certainly doesn't appear to have affected anything even the slightest) then why should HIPS have any effect whatsoever?

Industry, ANY industry will always moan about greater regulation. Its like scratching their balls really ;)

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Thats the advice i have been given by STRers and home owners all citing the Home information pack, surely a document costing £1,000 cannot trigger a crash or prevent it?

Based on my personal circumstances and advice I am planning to buy in 18mts time, anyone got the same plan? Im a FTB

As I've said before, the Glut of properties put on the market prior to HIP will drive down the prices and the crash will have started. Sellers will be rushing to get HIP after that will be watching the price of their property plunge :rolleyes:

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Let's suppose you have 8 buyers who are all looking for a property in the next 2 months. You have 12 sellers with identical houses who all want to move in the next 2 months. The sellers must compete against each other by lowering their prices. The 4 sellers who end up with the highest prices will miss this chance to sell.

If you reduce the pool of competing sellers to less than 8, then it is the buyers who must compete, by outbidding each other, so as to not be one of the buyers who misses the boat. This is the argument that says introducing HIPs will remove sellers and therefore raise prices.

Of course the market value is set on the margins, however somebody not serious about selling will want top vat, far in excess of market value, so they automatically price themselves out of the 'real' market. I don't think it will have much effect on liquidity as kite flyers make the market appear 'deeper' than it really is, however it will bring down average selling prices. Because buyers generally buy at a set discount to the asking price it may have the adverse affect. Put it like this, Rightmove won't like it one bit!

Come mid-2007 HIP's might seem like a nonissue compared to the potential problems out there, if anything it may act as a lightning rod for blame, which is why government could back out... they're not going to take it in the neck for a bunch of bankers, estate agents and the rabid fourth estate.

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No. It will become "offers over £xxx,xxx" then sealed bids. Just like at the top of a market. Only this will be "forever".

In that case they're not desperate sellers since this is not by any means a certain means of selling. Someone who is desperate actually needs to sell and can't afford to risk not selling.

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As an analogy, I usually prefer to use public toilets that are pay toilets rather than free ones. Typically pay toilets are better maintained by an attendant than free ones.

Billy Shears

Yes far les likely to find that someone has commited "toilet suicide" in a pay toilet. :lol::lol::lol:

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I think you're confusing it with the Scottish system, nothing will change apart from getting more detailed information up front before you even put an offer in.

No I'm not, I'm just saying what I believe will become more common, pehaps the norm, even. You are wrong about nothing changing. It WILL choke the volume of property put up for sale.

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The biggest problem with HIPS is going to be that all those home owners who have MEW'd or taken high gearing options on a OO or BTL property are going to have to borrow even more to cover HIPS costs when they a FTS (Forced To Sell!).

FTS is the new term by which we should refer to the many insane fools currently gleaming over their £3-5 million portolfio which ONLY cost them a few hundred thousand... their second or third homes or those FTB's who have borrowed the statutory 5 to 10 x income in order to get on the ladder because prices always go up.

The issue is that as prices decline and the credit crunch on debt begins to bite so many people will have no option other than to become FTS - the negative equity they will hold certainly won't pay off those loans and credits card statements.

It only takes a few FTS to undercut the rest of the market and keep pressure on a downward spiral.

or potentially...

Prices will rise because no-one wants to sell for a loss AND pay HIPS charges.

Either way I think HIPS won't have much impact on the market overall... people will always want to buy and sell houses.

- Pye

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I was planning to buy in about 18 months time, on the assumption that prices would have dropped by 15-20% by then. Now I'm not so sure, If BTL's increase their market share and keep the market high beyond it's natural cycle, the crash when it comes could be cataclysmic. I'm hedging my bets. I put half my deposit money, about ten grand, into gold in November (gold always rises before a recession). Since then gold's gone from $420/oz to $552/oz. So that's nice, but right now I cant see an affordable house this side of 2008/9, dammit.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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