HIPs New Weapon To Force Home Prices Down

Home Information Packs have become the latest weapon in the armoury of home buyers looking to knock thousands of pounds off asking prices.

According to a survey of 1557 by Hyder Consulting Environment and Home Survey,nearly half of all buyers said that they are ready to use the energy report in the HIP to demand a discount on the asking price.

And 14 per cent of those surveyed say a poor energy report will make them think twice about buying in the first place.

The findings could not come at a worse time for homeowners. They face mounting pressure to drop prices in the face of a sharp fall in house-hunter numbers as banks and building societies rein in their lending criteria.

At the start of the year the discount between asking prices and actual sale prices hit a record low in most of London and the South East as demand outstipped supply. Figures out this week revealed however that sales of homes across the country fell at their fastest pace for eight years last month.

The number of newly agreed sales dropped for the fifth month in a row in November, the sharpest decline since the start of 1999 according the Royal Institution of Chartered Surveyors.

The Royal Instituion of Chartered Surveyors (RICS) said recently that only one per cent of potential buyers was asking to see the contents of a HIP when viewing a property.

From today all homeowners selling their property will have pay up to £600 for a HIP and poor environmental ratings will be used to drive down prices.

The packs, which include some local searches and an energy efficiency rating, were made a requirement for homes with four or more bedrooms in August and extended to three-bedroom properties in October and will now have to accompany all home sales.

Experts have criticised the Government for backtracking on initial plans to include a home condition report, which could have saved potential buyers from paying for a survey. HIPs have also been criticised for failing to include information on flooding.

Mike Ockenden, of AHIPP, a Hip provider, said: “For HIPs to fully inform potential buyers about properties they are viewing it is vital that Home Condition Report (HCR) is made a mandatory part of the pack and that many of the searches which provide information on flooding, ground movement and contamination are included.

The National Association of Estate Agents said that the HIPs legislation was clumsy and blamed it for a decline in new instructions. Stewart Lilly, the president of the NAEA, said: “ At the moment – EPCs aside – HIPs are just wasting everyone’s time...It really would be in everyone’s best interests to scrap HIPs.”

The Hyder survey was conducted between November 1 and 6 this year.

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