Over two thirds of estate agents polled in a member survey by National Association of Estate Agents (NAEA) are against the introduction of Home Information Packs (HIPs)

The estate agents said they were against the introduction of HIPS on grounds that it would be a serious detriment to the health of the housing market.

HIPs are part of the government’s housing bill and would require homeowners (or their agents) to complete an information pack including a survey about their property before offering it for sale.

The NAEA has run a vociferous campaign against the packs on behalf of its members who suspect that the proposals would slow down the spontaneity of the market. Many people currently put their homes on the market tentatively and only when they get an offer do they become serious about selling. Estate agents fear this spontaneity will disappear and many think the cost of preparing a pack will deter a lot of people from marketing their homes.

The anti-pack group SPLINTA recently argued that the cost of selling homes will rise by £495 million every year because of the extra cost of the home condition survey in the pack.

Not all estate agents agree though. A pro-group of estate agents, CHIPS says that the government’s proposals will be good for the market and says that the cost of introducing the packs will be broadly neutral. The survey will eliminate the need and cost for a separate mortgage evaluation inspection, the group says, and eliminate the wasteful duplication of surveys that occurs under the present system.

The NAEA survey also asked agents to report the percentage of sales that fall through.

One of the government’s key reasons for introducing Home Information Packs is to reduce the number of sales that fall through, reported by the government as being at a rate of almost 30%.

However the results of the NAEA survey of estate agents suggests that only 16% of sales typically fall through, indicating that the problem is significantly less than the Government envisages. NAEA says this provides further evidence of the limited usefulness of HIPs.

The 16% fall through is roughly agreed by SPLINTA who believe the rate is 15%. However, CHIPS says that even if abortive costs were 15% (£175 million a year) it would still be unacceptably high. Industry research in June 2001 showed a failure rate of between 20% - 40% depending upon location, argue the group.

On another question, the NAEA survey found that long-term fixed mortgage rates received a qualified welcome.

Over half (53%) of estate agents polled believe that the government’s eagerness to promote long term fixed rate mortgages of 25 years will be beneficial for the housing market, with the only concern being the lack of flexibility in terms of early redemption. Nearly all the agents recognised the benefits of stable mortgage repayments over the longer term.