The housing market in England and Wales will fall further out of reach for first-time-buyers if Home Information Packs (HIPs) are rolled out to one and two bedroom properties, says the Royal Institution of Chartered Surveyors (RICS).
Since being introduced on 1st August, HIPs have contributed to the reduction in supply of properties coming onto the housing market as new instructions to sell have all but dried up. Already mandatory for three bedroom and larger properties, HIPs have wiped out a significant portion of the estimated 20% of speculative sellers that help to keep the property market moving.
A RICS member survey on the impact of HIPs shows the number of three bedroom and larger properties coming onto the market in October has dropped across England and Wales compared with the same month in 2006. Some 67% of respondents indicated a decrease in three bedroom or larger properties coming onto the market, with only 11% of respondents indicating an increase.
Respondents who recorded a fall found, on average, that new instructions to sell fell by 26%. Significantly, new instructions to sell on those properties not requiring a HIP fell by only 6%. The worst-affected areas were the South West (-75.9%) and the West Midlands (-72.2%) with substantially more Chartered Surveyors indicating a fall than a rise in new instructions for homes with three or more bedrooms.
RICS estimates around 300,000 properties are marketed each year by sellers 'testing the water' to find out what their property might fetch on the open market.
RICS spokesperson, Jeremy Leaf, said: "With prospective buyers and sellers currently taking a 'wait and see' approach to moving, activity in the housing market is grinding to a halt. The Housing Minister needs to understand that rolling HIPs out to one and two bed properties could find first-time-buyers caught between a rock and a hard place as accessibility to the market would go off the scale. Lack of smaller properties for purchase will force first-time-buyers to remain in the lettings market where rents are already climbing at the fastest pace in over eight years. If the Housing Minister genuinely wants to improve the plight of first-time-buyers, she should not continue with this flawed policy."
