Jeremy Says

Sellers of four bedroom properties desert market, says RICS

The number of properties requiring a Home Information Pack (HIP) coming onto the market in August has more than halved in certain areas across the country, according to a survey by the Royal Institution of Chartered Surveyors (RICS).

Fifty-three percent of respondents indicate a decrease in four bedroom or larger properties coming onto the market, with only five percent of respondents indicating an increase.

Respondents who recorded a fall found on average that new instructions fell by fifty-one percent. 

In certain regions the picture looks bleak.  The most affected areas were the West Midlands

(-83.3%) and East Midlands (-75.0%) with substantially more Chartered Surveyors indicating a fall than rise in new instructions for four bedroom and larger properties.      

London was the least affected region with only a -10% differential between fall and rise.  However, where affected, the capital recorded the largest reduction (66%) in new instructions (the London market is traditionally dominated by flats and smaller accommodation).

RICS spokesperson, Jeremy Leaf, said:

“Unfortunately HIPs is having a detrimental impact on the housing market, something the Housing Minister assured us would not happen.  Every region in the country is affected, and we fear that this will only increase as HIPs are rolled out to 3-bedroom properties.

“Blindly pressing on without having conducted any market impact study is hardly acting in the best interests of consumers.” 

Commenting on the general state of the housing market, RICS Senior Economist, David Stubbs said:

“Across the country, surveyors are reporting a fall in the number of four bedroom houses that have been placed on the market for sale. This is in stark contrast to what we would expect at this point in both the interest rate and housing market cycle.”

“New instructions to sell residential property should in fact be rising, as the impact of higher interest rates, and expectations of slower house price growth in coming quarters persuade more households to sell up. This was the pattern after the last set of interest rate increases which took place between November 2003 and August of 2004. Those increases caused new instructions to start rising in June of 2004. Instructions continued to increase for all but one of the next 23 months.”

RICS Head of Regulation Policy, Gillian Charlesworth, said:

“We need home buying reform, but the Government needs to step back and consider this and other evidence it has about implementation so far, in cooperation with the industry and other interested groups.

"The residential property market is far too important to the economy to take any risks in the current climate."

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Created: 25th Sep, 2007 | Modified: 25th Sep, 2007