House prices affected by Hips

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by Kay Murchie

Property website, Rightmove, have claimed that property prices have fallen by 3.2% over the past month as sellers made cuts to beat a Home Information Pack (Hip) deadline.

Rightmove said the full roll-out of Hips, implemented last week, has had an affect on an already slowing market as the website’s latest survey of asking prices showed a significant decline from an average of £239,986 in mid-November to £232,396 this month.

Hips were launched on August 1 to include properties with 4-bedrooms or more and rolled-out to include 3-bedroom properties on September 10. Hips have been continuously subject to heavy criticism since they were introduced.

The extension of Hip rules to cover all properties added an extra 1.1% to the fall and brought ‘further confusion at a sensitive time for the property market,’ said Rightmove with London properties suffering the most as the City noted an increase of cheaper-than-average 1 or 2 bedroom properties come on to the market.

In the last month, prices fell by 6.8% with Rightmove saying this would have been reduced to 4.5% without the impact of the Hip deadline. Its information showed that this time last year, 38% of new sales across the UK had two or fewer bedrooms but the figure increased to 48% in the week of December 2.

A spokesperson for Rightmove said that new listings are low at this time of year so the artificial wave of low-end sellers has really distorted the average prices of properties new to the market. The spokesperson concluded that the market is likely to see a period of stagnation in 2008 rather than a crash.

Charges for Hips range from £300 to £500 plus VAT. Those found marketing their property without a Hip could be fined £200.