Louise Cuming is head of mortgages at Moneysupermarket.com
Awareness of Home Information Packs is worryingly low, with 61% of consumers under the impression that buyers will have to stump up the cost for the packs.
I’m pretty sure the impact of Home Information Packs will be greater in the residential market than in the buy-to-let sector. One reason I think this is that when landlords go into the buy-to-let market these days, they tend to be looking to stay in it for the long term. They regard buy-to-let as an investment, often to generate additional income (sometimes as a self-employed landlord) or to support their retirement plans. Come the time of the implementation of HIPs, while we may see a small proportion of landlords offload properties, they would have probably done this regardless as the appreciation of property will be higher than the 1,000 they will have to spend on the HIP. For them, the long-term gains should outweigh any short-term losses incurred because of HIPs. There are a few circumstances in which HIPs won’t need to be produced. For example, my understanding is that landlords who have sitting tenants won’t be required to produce packs. But the reality is that many lenders have criteria issues when it comes to lending on properties with sitting tenants, so these will be few and far between. Most buy-to-let sales will be captured by the legislation. Bearing in mind that one of the sectors that looks set make the biggest gains as a result of the introduction of HIPs is estate agents, there will be little incentive for them to encourage buy-to-let investors to sell their properties early. They would miss out on the extra revenue they can gain from the packs. While I don’t believe the implementation of HIPs will have an impact on the buy-to-let market specifically, the residential market could experience a mini-rush of sales along the lines of the rush to buy when double MIRAS was removed in the late 1980s.