Yesterday was the day that those of you who own 3 bedroomed properties had to start using HIPS!
The controversial Home Information Packs were first introduced for 4 bedroom homes at the beginning of August and since then have had nothing but bad press!
The Government had initially limited the packs to properties with four or more bedrooms when it launched them at the beginning of August amid fears that not enough energy assessors had been trained.
Property experts also warned not enough work had been done on how they would affect the housing market as a whole, with some claiming they would lead to a slump in sales due to the upfront cost people now faced when putting their home on the market.
But the Government announced last month that there were now enough energy assessors for the packs and energy performance certificates (EPCs) to be rolled out to 3 bedroom homes.
But as we have already mentioned many times before at the Money Hospital, HIPs have been opposed by many estate agents and surveyors who claim they just complicate the already tricky process of selling a property!Now, the Royal Institution of Chartered Surveyors (RICS) claims that people selling 4 bedroom properties have been avoiding the housing market altogether!
They say that the number of properties requiring a HIP coming onto the market in August had more than halved in certain areas across the country compared with the same month last year.
"Our members are saying that compared with August 2006, instructions to sell four or more bedroom houses is down by about 60%," said Jeremy Leaf of RICS.
However, this view is countered by supporters of HIPs who say that in the past month, their introduction has gone smoothly!
"Much to the despair of the anti-HIP lobby, here we are welcoming HIPS for over 60% of housing stock," said Dominic Toller of the HIP provider LMS.
The Department for Communities and Local Government (DCLG) said the introduction of HIPs was already starting to reduce costs and improve overall transparency in the housing market.
The inclusion of three-bedroom homes in the scheme has been hailed by pack providers as evidence of their success.
In addition, the communities' minister, Iain Wright, said: "Families buying four-bedroom homes are getting clear information, which shows how they can save hundreds of pounds on their fuel bills and cut carbon emissions too. It is important that this should be available for people buying three-bedroom homes as well."
HIPs are (in theory) designed to reduce the number of house sales that fall through. At the moment around 30% currently collapse between offer and exchange (roughly 500,000 transactions a year!) leading to £350m being wasted in fees!
Dominic Toller, director of marketing and new business at provider LMS, said: "Much needed reform is under way and it hasn't brought the housing market to its knees as some had predicted."
However, one of the most vocal critics of the packs, RICs, said sellers of four-bedroom properties have been shunning the housing market.
The number of four-bedroom properties for sale in August more than halved in certain areas across the country compared with the same month last year, it said.
A total of 53% of respondents to its survey indicated a decrease in four bedroom or larger properties coming on to the market, with only 5% of RICs respondents indicating an increase.
The National Association of Estate Agents (NAEA) also claimed a fall in the number of four-bedroomed homes for sale since August 1. It said on average its members were reporting a 37% fall in the number of larger homes on their books, with HIPs cited as the main reason for the fall.
"Our concerns have always been that the introduction of HIPs would lead to a lack of supply following implementation," said Peter Bolton King, chief executive at the NAEA.
The average price being paid for a HIP is £350, according to the NAEA, indicating most homes are being sold without the home condition report (which the NAEA says is the only useful part of the pack besides the energy performance certificate!)
A spokesman for the DCLG said: "It is a ridiculous and wrong-headed to present normal patterns in the housing market as somehow linked to HIPs; no serious economists are claiming this is the case and are clear that interest rates, house prices and stock market uncertainty continue to be the most significant factors in determining market behaviour. The notion that people are making major life decisions on the basis of the £300 cost of a pack, which is less than 0.1% of the price of an average four-bedroom home and far less than estate agent fees, is simply ludicrous."
So, there you go; even more argument and counter claim between the opposing factions over HIPs!
No matter what your viewpoint on them is (either useful or useless), the fact of the matter is that if you own a 3 bedroomed property and wish to sell it, you had better get HIP!
HIPs: has it cost you £5,000?