Property News

Information packs ''may lead to higher house prices'' - 15/05/2006

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The forthcoming introduction of home information packs (Hips) could affect the number of homes going up for sale, potentially impacting property prices, claims the National Association of Estate Agents (NAEA).

Nearly three quarters of respondents to a survey carried out by the NAEA said that they would reconsider putting their property up for sale knowing that they may have to pay for the Hips, which will be priced at between £600 and £1,000, even if the house has to be withdrawn from the market.

If this happens, house price inflation could increase as a result of fewer properties being available for sale.

Peter Bolton King, chief executive of the NAEA, commented: "The worst-case scenario is that the Bank of England will be forced to raise interest rates in order to control this, resulting in a knock on effect on the whole economy."

"The NAEA does not believe that the government has properly considered the serious knock on effects that the introduction of Hips could bring," he added.

These claims come soon after GMAC-RFC raised concerns that the introduction of Hips could affect the availability of second-hand properties.

Stephen Knight, chairman of GMAC-RFC, said: "A property move in the UK is often triggered by vendors testing the water. When they receive an offer they then understand what they can afford to buy.

"A chain is created. Hips could prove to be giant 'roadblock' to this process."

According to Rightmove, house prices have increased by two per cent this month to an average asking price of £209,829.

The property website said that this was partly due to a shortage of both new and second-hand houses reaching the market.

© Adfero

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