‘Scrap HIPs’ say estate agents

Over 80% of estate agents believe that the number of sellers coming onto the market would substantially increase if HIPs were scrapped* – so County Homesearch, the largest independent network of homefinders in the UK, again reaffirms that HIPs should be suspended with immediate effect.

“The news that prices are hardening is little to do with confidence returning to the market and more to do with the acute shortage of stock. We believe 50% more houses would come to market if sellers didn’t have to commission a HIP before deciding to sell,” says Jonathan Haward, managing director of County Homesearch.

“Historically, the property market has been fuelled by people who will move ‘if the right thing comes onto the market’. When it does, this usually triggers several such interested parties to put their own houses up for sale, but this spontaneity has been thwarted by the HIPS hurdle, which is not only time consuming, but also costs the vendor several hundred pounds. Knowing that there is other interest in the property, the spirit of competition is thwarted, the houses don’t come onto the market and so the supply dries up.”

Jonathan Haward adds: “HIPs have not produced a single tangible benefit for consumers and the fact remains that the vast majority of potential buyers who approach County Homesearch see them as completely irrelevant to their purchase. Equally, if HIPS were intended to improve the conveyancing process they have failed, failed and failed again. They are not even a significant tax raising vehicle. HIPs and housing transactions contribute to Government revenue via VAT and Stamp Duty but it is now clear that revenue has declined in both cases. Stamp Duty revenue from 2007 to 2008 has gone from £5.2 billion to £2.4 billion – a drop of £2.8billion.

“The market needs to get going again but buyer interest is soaring only to be frustrated by lack of stock. And part of the reason for the lack of homes for sale is that people are put off by having to have a HIP before they market their home. This is clearly an impediment to an improving market – which is why we are calling for the suspension of HIPs. A better system that does not disincentivise homeowners from putting their properties onto the market should be introduced instead.”

* SPLINTA survey, May 2009