Economic tracker, Death of HIPs may spark more activity

31 May 2010

It is somewhat ironic that the biggest impact Home Information Packs have made on the housing market has come as a result of their suspension. I can recall the survey for the Department of Communities and Local Government way back in 2008 which revealed that 76% of sellers said HIPs had no effect on their decision but it took until 2010 for the axe to finally fall.

The timing of this announcement was crucial as reports from our 1,200 agents and 750 consultants show we might not be out of the woods yet. Recent weeks have given cause for worry, with risk concerns dominating the agenda and lender actions such as the reduction in LTVs in danger of creating the double dip they fear.

Amid the general economic and electoral uncertainty some lenders have outshone their competitors by raising their game, and hats off to Nationwide Building Society for launching a range of buy-to-let products recently and Northern Rock for its commitment to increase lending in the second half of the year.

We are also seeing some new names trying to address the gap in the buy-to-let market, such as Precise Mortgages which launched this month. Despite this, uncertainty is still having an impact, with the Council of Mortgage Lenders supporting Countrywide’s earlier findings by reporting a fall in gross lending and a slowdown in the recovery.

This mood is echoed in other sectors, with retail spending down 2.3% on last year, according to the British Retail Consortium. Meanwhile, the Retail Prices Index has reached its highest rate for 19 years. This will add to the government’s growing list of concerns, with inflation reaching a 17-month high and unemployment at its highest since December 1994.

All this is cause for concern but we hope the suspension of HIPs acts as a catalyst for change. Only through the combined efforts of government, lenders and the intermediary sector will we drag this market kicking and screaming back to sensible and sustainable levels of activity

We’re already seeing a positive impact from the HIPs announcement and expect a record week for new listings. We hope this will create a ripple effect among other associated areas such as lettings, surveying, mortgages and insurance services to give the property market a much-needed boost.

STATISTICS