Tuesday, May 15, 2007

Supply increases …

Home sellers flood market in panic over HIPs

Apparently lots of sellers are trying to sell their home before the HIPS debacle becomes law. Personally I don't buy it. Why would a seller who has made many thousands sitting on their backside be worried about a measly 500 quid. (Hopefully it will hurt BTL-ers though). Learned opinions please?

Posted by talking rot @ 07:38 PM (3081 views)
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13 thoughts on “Supply increases …

  • Not so much an issue of transaction costs (which – by the way – is to be forked 100% by the seller and cannot be put in the price… sorry this is basic microeconomic theory!)
    IMHO the Hip’s are a signal that potentially, many owners who do not need properties to live in them (read the BTLers) are going to take profit.
    So if I were a BTLer, having 5 or 6 properties, I would put a couple on the market and test the water. With no obligation to sell.
    But this way I would find more about how difficult it may become to sell a property in a hurry… if I were to be selling in a hurry
    And so market sentiment starts to be eroded…

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  • This is my opinion only (and please don’t slate me about it if you think its a ridiculous idea):

    When washing machine and refridgerator manufacturers first introduced energy efficiency labels, only the most energy efficient/environmentally friendly products sold well, the others did not – and as a consequence both products become more energy efficient, with the other products becoming obsolete. Now (and its a long shot), in the age of being enviromentally friendly, some homeowners, BTLs may feel that once their home is energy certified – and it scores poorly on the ranking, they may feel at risk that the value of their property may come down and/or might not be able to sell so easily as a very energy efficient home.

    It is a only an idea.

    (First time posting, LONG time reader…..27 and living with parents….again)

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  • IMHO the rush for HIPs is probably because many of these properties are dodgy and would have to have work spent on them to get a clean bill of health from a HIPs report. Selling before HIPs will put the onus on the Buyer to find out the problems rather than the Seller declaring them.

    I think HIPs are a good idea and could start to make things a bit more transparent. I actually think the original HIPs proposal be for it was scuppered by the VIs was very good.

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  • Comments to this Article are Great !

    E.g. ………………………..

    I really don’t hope house prices don’t fall for the following reasons:

    1. I wouldn’t be able to bore my work chums with stories of how paper-rich I am.

    2. ‘Common’ people on average wages would once-again be able to buy homes for their families (how dare they!).

    3. I wouldn’t have anyone to rent my 10 buy-to-let flats to. How else an I supposed to make a living!?

    For these 3 reasons I think HIPS are a bad thing.
    Posted by Chris on May 15, 2007 1:16 PM

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  • I think you may find that many homeowners are putting their houses on the market in order to get the HIPS exemption till Jan 2008, in case they need to sell later this year. It costs them nothing. In fact they will probably ask a ridiculously high price on the basis that they might be persuaded to sell if they get an offer at or near that price.

    Even if you have made thousands an extra £500 for effectively doing nothing is attractive to many people. You also avoid the bother of getting a HIP done if you sell before next year.

    BTW I have been making financial decisions based on a HPC for the last 2 years amd I just keep wondering when/if it is ever going to heppen!

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  • HIPs are seen as a ysympathline in the sand…

    Nothing more – prospective sellers fear that imaginary line in the sand that will cause their equity to diminish. Therefore they are reacting in anticipation of market sympathy.

    Worth noting that this is a projection of the emotion of ‘fear’

    The collapse is coming – just look at what is happening to the Irish market (south)

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  • Buy to let is unethical and the UK is filthy with them. Perhaps the communists were right after all.

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  • Andrew Kershaw says:

    £500 quid?? OK this is only 0.25% on the average house price, and i agree it means nothing.

    Now think again –
    Cost of improving your house to meet the legislative HIP standards??
    Well thats a bit different isn’t it?

    Doubt is the father of innovation –
    Galileo Gallilei

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  • Cheekie Charlie says:

    Yeh great lets have somebody with a couple of weeks training to tell you your loft needs an extra layer of insulation and charge you £200+ for 15 minutes work or maybe if your lucky he may recommend your boiler needs a jacket then you really would get your moneys worth out of these newly skilled professionals. What a ripoff from start to finish.

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  • The Capitalist says:

    HIPs are classic Old Labour meddling. Originally intended to include a Home Condition Report (done by a new breed of Home Inspectors) this was dropped last July. Now they are promoted as some sort of Green bill of health on a home. Don’t make me laugh – “darling it’s perfect and in the right school catchment area, but it with no cavity wall insulation and dodgy boiler the carbon footprint is simply untenable!”

    And yes £500 will stop people marketing their homes, don’t forget about a third of the market is people simply having a punt to see if they get the asking price. A major part of the market will now go and will perhaps be another factor that causes the crash. IMHO.

    AK – there is no EPC standard, just a scale of how efficient your home is. There is no law saying you must improve your home (Old Labour may have ideas on that – another reason to raise council tax)

    Let’s hope the Commons vote today on HIPs goes for a delay or annulment.

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  • Surely anyone who is intelligent would have a survey done of each property they are likely to buy before actually buying. Therefore anyone who is in the market to buy would have a few of these done. £500 quid is nothing compared to the potential losses of buying something that is so expensive and that might go sour.

    So, if you were trading up the housing ladder, having the seller pay the cost of a HIP and from an independent source, will actually save you money and the seller money, presumably because he is also looking for a place to move to. The HIP for each property only needs to be purchased once per house on the market, instead of once per serious offer of a house on the market.

    So, this convinces me that the argument against this is not coming from home owners but house owners and speculators.

    Also these people could easily pass the cost onto the final buyer. So perhaps its the particular desire to keep potential purchasers uninformed that is driving the argument against this.

    HIPs are one of the few and far between GOOD things that I’ve heard of that this government has put forward.

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  • Chilli
    “So, if you were trading up the housing ladder, having the seller pay the cost of a HIP and from an independent source, will actually save you money and the seller money, presumably because he is also looking for a place to move to.”

    – Eh??? Do you know what percentage of the property market is rental?

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  • The Capitalist –

    OK – There is no EPC standard and no enforcement to improve your home.
    But in sales – making your product as attractive as possible is key, and if it costs a little more it costs a little more.
    2 electrical devices – one with low energy efficiency (green sticker) and one with high energy efficiency (red efficiency). Which one gets bought?
    Your sat on the market for 12 months with a big red sticker on your HIP and theres no interest what do you do? – two options – deflate the price or make improvements.

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