Hips abolition boosts housing market, says Rics

The Royal Institute of Chartered Surveyors reports an increase in supply of homes for sale, but opinion is mixed over the market's short- and long-term outlook

The abolition of home information packs (Hips) last month has provided a boost to the property market with an increase in the number of homes for sale, according to the Royal Institute of Chartered Surveyors (Rics).

Looking at the market in May, Rics said 22% more chartered surveyors reported a rise than a fall in house prices, up from 17% in April. At the same time surveyors claim that the decision to abolish Hips has seen a rise in new instructions from 11% in April to 21% in May.

Rics spokesman Ian Perry said: "Surveyors are generally confident that sales will continue to pick up over the summer months.

"The increase in supply as a result of the the abolition of Hips is helping to support this optimism despite continuing concerns about mortgage finance. A higher level of instructions should, meanwhile, also lead to a flatter trend in house prices in the latter part of the year."

The picture on house prices was mixed across the country, however, with surveyors reporting price falls in Wales, Yorkshire and Humberside, and the West Midlands. London led the rises, with 60% more surveyors reporting price increases rather than decreases over the past three months.

Paul Cocker, a chartered surveyor at Blundells in Sheffield, said mortgage availability was still the main factor affecting the market. "Cutbacks in the public sector over the coming months are also going to have an effect on demand," he added.

The Chartered Institute of Personnel and Development predicts 50,000 public sector job losses in the next nine months as a result of the government instigating £6.2bn of cuts, while Manchester Business School puts the figure at 100,000.

David Nesbit, a chartered surveyor at Nesbits in Portsmouth, said that while there would be "no tears" over the death of Hips, "an explosion of instructions is hype and misleading". Meanwhile in East Grinstead, West Sussex, Philip Hiatt at Your Move said that more properties had come on to the market as a result of the abolition of Hips but added: "All we need now are more buyers with a mortgage agreed."

Hips, which were launched in 2007, were one of the fist things to be abolished by the coalition government with communities secretary, Eric Pickles, describing them as "expensive and unnecessary".

Other house price reports this month have presented a mixed picture of the market. Halifax said house prices fell by 0.4% in May, just a day after the Nationwide building society reported a 0.5% rise during the same month.

A report by Acadametrics, the only measure which uses actual prices for every property transacted in England and Wales rather than valuation estimates or asking prices, suggested last Friday that the housing market may be experiencing a "double dip" with the post-credit crunch recovery – which saw prices start to rise again in 2009 – now over.

Writers name

Lisa Bachelor, The Guardian 15-06-2010

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