Monday, 18 June 2007Sellers rushing to beat the Home Information Packs (HIPs)
Sellers rushing to beat the Home Information Packs (HIPs) deadline ignored rising stock
levels and pushed average national asking prices up to a new record high of £239,317.
Prices rose by 0.8% during the last month, despite the fact we saw a large number of
properties placed on the market for the second month in a row. A proportion of these
listings will have been motivated to come to the market by a desire to save money on the
costs of a HIP rather than pricing competitively to secure a buyer and a speedy move.
Miles Shipside, Commercial Director of Rightmove comments: “The rush to beat the
impending HIPs deadline appears to have attracted some poorly motivated sellers to the
market. They are chancing their arm at some fairly bullish prices considering there is now a
lot of property up for sale. Their main motivation will have been to save some money
avoiding a HIP, rather than being realistic on price because they had seen a property they
desperately wanted to buy”.
For the second consecutive month Rightmove has measured around 200,000 properties new
to the market, leading to a near 10% jump in average stock per estate agency branch. This
is the largest percentage increase in stock since July 2004, when buyers held off after the
Governor of the Bank of England warned that property prices could fall. Average prices then
stood at what now appears a relatively modest £196,198; £43,119 lower than today’s
figure. Average stock levels per estate agency branch increased from 61 properties in April
to 67 in May and are now the highest for 2 years. Demand for property at these record
price levels is now struggling to keep pace with supply in most areas. The external factors
of buyers being put off by interest rate rises and the ‘HIP rush’ of sellers have combined to
swing the market in buyers’ favour.
Miles Shipside adds “More property available is good news for buyers, as sellers that need
to sell urgently will have to drop their price. Ironically those that sought to save a few
hundred pounds by avoiding HIPs have contributed to a glut of property on the market
which will actually cost them money as they will have to discount their prices to sell.
However, the lack of forced sales means prices overall are unlikely to fall back much from
these record levels. Most sellers can afford to wait; doing little to help buyers stretched
affordability”.
The end of a boom is also traditionally signalled by a slowdown in London’s prices. For the
first time since December 2006, monthly price rises in the capital have been outstripped by
over half of the regions in the rest of the country. In addition, the average price in London
rose by less than the national average of 0.8%, with an increase of 0.7%. Prices are still
likely to increase further at the ‘non interest rate sensitive’ top end, where supply remains
at a premium compared to the greater choice now seen in the rest of the country.
Read the full article and supporting statistics at http://www.rightmove.co.uk/pdf/p/hpi/HousePriceIndex18thJune2007.pdf |