Hips Scrappage Sparks Surge In Homes For Sale
4:03am UK, Saturday May 29, 2010
The number of homes being put on the market has reportedly soared by a third since the Government announced plans to scrap home information packs.
New instructions are reportedly up 68% compared with the same period last year
The UK’s biggest estate bureau Countrywide stated it had seen a 34% rise in the number of people selling their home after the announcement.
It stated new instructions, up 68% compared with the same period a year ago, are now at levels last seen in September 2007 – shortly after home information packs (Hips) were first introduced.
The packs were intended to speed up the homebuying process by giving buyers more of the information they need up front.
But estate agents have campaigned against Hips, complaining that the typical £299 to £350 cost of compiling one of the packs was deterring people from putting their home on the market to test the water.
There was also tiny evidence that the packs were of benefit consumers, with 91% of estate agents saying they thought house hunters paid tiny or no attention to them.
Not surprisingly, there have been no reports of buyers questioning how the Hips suspension will affect them or if it will add to their costs.
Robert Scarff, MD of Countrywide’s estate bureau division
On May 20, the Government announced the packs were being scrapped with immediate effect.
Robert Scarff, managing director of Countrywide’s estate bureau division, said: “The results talk for themselves and show that the timing of the suspension of Hips was crucial.
“This decision has provided home owners with the incentive they need to put their properties on the market.
“Those sellers that were in two minds are now doing so and causing a huge spike in activity for agents.”
The biggest increase is in the Central and West Midlands region, where there has been a 126% jump in new instructions.
The number is 58% higher in the North East and 53% up in the East Midlands.
Mr Scarff said: “The increase in activity kicked off as soon as the Government announcement was made.
“Not surprisingly, there have been no reports of buyers questioning how the Hips suspension will affect them or if it will add to their costs.
“This clearly shows how highly regarded Hips were and supports our view that the Government was 100% right in their decision to suspend the scheme.”
But it may not be the end of Hips that has driven the jump in people looking to sell properties.
There are suggestions that property investors are considering offloading some of their holdings before capital gains tax (CGT) is increased.
The tax is currently 18% on any gains made above 10,100 but in its coalition agreement the Government stated it planned to tax non-business capital gains at rates similar to those applied to income.
This has been interpreted as meaning the CGT rate will be increased from its current level of 18% to 40% or even 50%, depending on the level of income tax people pay.
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Submited at Sunday, May 30th, 2010 at 12:00 am on Business by Alina
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