GMAC reveals HIPs concern
At the BSA’s annual conference this week, Britain’s biggest building societies are expected to warn that government plans to force home owners to prepare Home Information Packs (HIPs) when they put their house up for sale will have a negative impact on the housing market.
Research by the BSA found that 84 per cent of building society chief executives want HIPs to be made voluntary. The fear is that there could be a glut of property for sale before their proposed introduction in June 2007, creating a downward blip in prices. This could be followed by a rise in prices.
Stephen Knight, chairman of GMAC-RFC, commented: “We share the BSA’s concerns regarding the introduction of HIPs mainly because no preparation so far has addressed the core, fundamental concern with HIPs, namely that a substantial compulsory charge is being introduced to a largely discretionary market. Bringing in an £800 ‘tax’ for anyone putting a property onto the market fails to capture the point that, in general, buyers need to buy, but sellers don’t need to sell. This could cause a significant jolt to supply and a reduction in the flow of second-hand properties in future.
“A property move in the UK is often triggered by vendors testing the water. When they receive an offer they then understand what they can afford to buy. A chain is created. HIPs could prove to be a giant ‘roadblock’ to this discretionary process.”