Figures released by the National Association of Estate Agents (NAEA) today show that 61% of its members feel that the introduction of Home Information Packs (HIPs) in 2007 will create an unrealistic housing market.

An influx of homes is expected to flood the market in the months before the introduction of HIPs, as sellers attempt to avoid the increased cost of selling a property.  The cost of the HIP, paid for by the homeowner, is expected to be between £600 and £1,000. It could be even more for larger than average properties. This will be a further addition to the rising expenses that homeowners currently face.

Information released by Halifax last week stated that the cost of owning a home rose by 5% in 2004 largely due to council tax, maintenance costs and household insurances.

In the NAEA poll, 54% of members felt that the loss of first day marketing rights could deter homeowners from putting their properties on the market.  Only 24% felt that the HIP would not be a deterrent and 22% of respondents felt it was too early to comment.

Christopher Hall, President at the National Association of Estate Agents, comments:  “It is very difficult to imagine exactly how the market will react. In the run up to the introduction of HIPS the market could become saturated with properties. Conversely it could be starved for a number of weeks. Keen sellers may well be looking to avoid any extra cost by marketing their property before the pack becomes compulsory in 2007. Meanwhile, buyers could be out in force when they realise it is ultimately the buyer who pays.

“Once the HIP has launched, the market could experience a slowdown, with decreases in the number of new properties entering the market as new sellers are deterred by the time and cost implications of organising a HIP.  The effect of this would be an unrealistic market climate. In these unfamiliar conditions valuing property may become more difficult and assessing supply and demand could also be hindered.  All this could have severe consequences for the housing market in 2007. However, there are other factors, such as the possibility of residential properties being placed within a SIP, which could equally put the pressure on supply meeting demand.”