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Government packs could slow down market

24th November 2005 | back to article listings BACK    print this article PRINT

The government's planned introduction of home information packs (HIPs) next year could "significantly slow down" the process of buying and selling property, according to the National Association of Estate Agents (NAEA).

The organisation's chief executive Peter Bolton King made the remarks during a meeting with estate agents in Bournemouth, the Bournemouth Daily Echo has reported. He said that more preparation was needed if house buyers and the housing market were not to be hit by delays following the launch.

The government sparked criticism just last week when it announced that the packs would become mandatory for the housing market from June 1st, sparking fears that the market would be swamped with properties for sale before the change takes place. Lenders had advised that the introduction of the packs be delayed until later next year.

Under the new rules, all sellers will be required to complete the pack prior to putting the house on the market detailing the value, condition and surveys of the property concerned. The government says that the new scheme will reform the property market, helping potential buyers and investors by preventing waste and significantly cutting the number of sales that fall through.

But investors might look to take advantage of the situation by getting clued up with the situation before the general public. Already, analysts have been predicting that new houses might swamp the market before the June deadline, driving prices down and raising the opportunity for some real bargains. And if the NAEA concerns are correct, a slowed down process could also decrease demand.

"Alongside the cost and the restrictions the HIP will place on sellers, its introduction could significantly slow down the marketing process," Mr Bolton King was quoted a saying in the Bournemouth Daily Echo. "This in turn could impact on the entire property market. I will be looking at how we can help people prepare for HIPs."

He said that agents would do everything possible to help investors cope with the new rules. "The buy-to-let sector, which constitutes 2.5 million properties across the UK, is already suffering a slowdown and the latest regulations are likely to cause further harm," he said. "I am keen to see a recovery and will be working with agents to help try to achieve this."

The market has seemed to be picking up of late. Sales activity has seen a modest increase and surveyors are reporting a rise in buyer activity of eight per cent from their low in February, though the figures are still five per cent down on a year ago.

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