Sellers deterred by home information packs

Thursday, 13 April 2006 12:00 AM

First-time sellers will be deterred from putting their house on the market by the introduction of home information packs (HIPs), research suggests.

Estate agents are warning that the packs, which could cost more than £1,000 and will have to be obtained before a house is marketed, could make first-time sellers think twice about putting their house up for sale.

Sellers will have to pay for the packs even if they do not find a buyer, and this is set to discourage more than three quarters of 24 to 34-year-olds from putting a home on the market.

This increases to 80 per cent among 16 to 24-year-olds, according to the research carried out by the National Association of Estate Agents (NAEA).

At present, sellers who take their home off the market without finding a buyer, or because they simply changed their mind, do not incur any costs.

But from June 2007, when home information packs become mandatory, putting a house on the market will cost up to £1,000 plus VAT. This cost will be added to those of stamp duty, estate agents and solicitors' fees if the sale is successful, but incurred anyway if no buyer is found.

"Those on the lower rungs of the housing ladder clearly need all the help they can get in order to find their feet financially. This is the age at which children come along, and families are most likely to be looking for more space," said Peter Bolton king, NAEA chief executive.

"With the anticipated cost of the HIP set at between £600 and £1,000, plus VAT, and high levels of stamp duty to contend with, many first-time sellers may find that the next step up the ladder is simply too much of a stretch for them, and be forced to stay put.

"This will, of course, impact on the rest of the housing market, slowing it right down and causing frustration for first-time buyers and those further up the housing ladder alike."
Trials of home information packs are currently underway across the country as part of testing prior to their mandatory introduction.

The government believes the packs will help save £1 million a day in failed transactions, by providing information up front to buyers on the condition of the home they wish to buy.

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