The introduction of Home Information Packs, or HIPs, has had a clear effect on the property market.
That’s according to the Royal Institution of Chartered Surveyors (RICS), which has done a poll among its members across the UK.
It discovered that the number of properties needing a HIP coming onto the property market in September continued to fall, when compared to the same month in 2006.
And 73 per cent of respondents saw a decrease in three bedroom or larger properties coming onto the market.
HIPs were first introduced for four bedroomed houses on 1st August this year, and extended to three bedroomed properties on 10th September.
The original intention behind HIPs was that they would reduce the amount of gazumping and sales that fell through. If you have a three bedroomed house or larger, you must pay for a HIP to be prepared before you can put your home on the property market.
The RICS survey showed that the worst affected areas were Yorkshire and Humberside with a 46 per cent drop in new instructions of 3 bed homes or larger, and the South West recording a 41% drop.
More chartered surveyors there saw a fall than a rise in new instructions for homes with three or more bedrooms.
The North was also affected with a 40% drop, and Wales also saw a fall of 39%.
The South East and North West seemed least affected, with drops of only 33% and 32% respectively.
In other areas, both East Anglia and West Midlands recorded a 38% drop, while the East Midlands saw a drop of 36%.
London’s property market saw a drop in instructions of 37%. It’s believed that HIPS will be rolled out to all properties by the end of the year. And that is likely to affect the capital more, as it is traditionally dominated by flats and smaller accommodation.
Home Information Packs were first announced in the Queen’s Speech in November 2003, and were originally planned to be launched on the 1st June this year.
But just ten days before, Communities Secretary Ruth Kelly announced they would be put back two months, and would initially only be for larger properties.
The pack must contain a number of documents, which can’t be more than three months old when the property is first marketed.
They include an Energy Performance Certificate, title documents for the property, and local authority and drainage searches. If the property is leasehold, there must also be a copy of the lease, building insurance policy and any legal details for the landlord or management.
Other optional documents include two sellers’ questionnaire forms called a Home Use Form and Home Contents Form, and a legal summary.
It was originally planned that every pack should contain a Home Condition Report, setting out the general condition of the house in plain English. The idea behind this was that as a buyer looking round the property market, you would be aware of any problems with a house before you went to look at it. This was the key tool to reduce the number of delayed or cancelled sales.
Their mandatory inclusion has now been postponed after lobbying from the industry. When they are eventually introduced, the Home Condition Reports will have to be carried out by qualified Home Inspectors.
The RICS was set up 136 years ago, and is considered to be the most respected and high profile standards and membership organisation for property consultants and other professionals involved in land, property and construction.
It has 140,000 members across 146 countries worldwide, and regularly releases information on the property market.
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