Tuesday 18th December 2007
Home information packs (Hips) have caused a significant slump in asking prices in recent weeks, Rightmove claims.
In its December house price index, the property advertiser detects a 3.2 per cent drop in the average sellers valuation when compared with November figures.
This continues from a 0.7 per cent decrease in the preceding month - with Rightmove suggesting the extension of the scheme on December 14th may be to blame.
On that date, all remaining properties - comprising those with two bedrooms or fewer - became subject to the requirement that the seller arrange a Hip before listing the home for sale.
Rightmove reveals that a glut of such properties have entered the market as a result, tipping the balance in favour of supply and driving down prices.
Commercial director Miles Shipside observes: "Three months ago we forecast that the final phase of Hips would drop average prices this month."
The firm explains that anticipation of the date is the primary cause, with sellers looking to get their property listed in time for the deadline and so attempt to avoid needing a pack at all.
"At this time last year, 38 per cent of properties coming to market had two or fewer bedrooms. In the week from December 2nd to 8th, this increased to 48 per cent," the report asserts.
Following the introduction of Hips for four-bedroom properties and above, the Royal Institution of Chartered Surveyors found in September that house price growth "turned negative for the first time since October 2005".
Speaking at the time, spokesperson for the organisation Ian Perry commented: "Hips have reduced the number of four-bedroom family properties coming on to the market, making family homes even more difficult to purchase."
Now it seems the packs are having a similar effect across all properties, causing excessive supply - while high interest rates and the credit crunch have been widely cited as having resulted in a climate of low buyer demand.
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