GMAC-RFC has called for a "paid for "dry run of home information packs so their impact on the housing market can be properly assessed.
Stephen Knight, chairman of GMAC-RFC, says the Hips ‘dry run’, announced by the government last week, has got to involve consumers actually paying for the reports, as he argues Hips have so far been under-researched.
Knight says: "We applaud the government for trying to protect housebuyers from wasting money on failed property transactions but we are concerned that no-one has fully assessed the potential effect this compulsory 'tax' could have on the UK property market."
Knight believes a £600 - £700 “tax” for putting a property onto the market could cause a significant reduction in the flow of second-hand properties in the future.
He says: "A property move in the UK is often triggered by vendors testing the water. When they receive an offer they then understand what they can afford to buy. A chain is created. Hips could prove to be giant ‘roadblock’ to this process."
Recent research carried out by the National Association of Estate Agents (NAEA) in March reveals 73% of UK homeowners would think twice about marketing their home for sale as a result of the introduction of Hips.
Concerns over Hips have been growing over the last 18 months with brokers and lenders alike claiming they will increase cost to consumers and stifle a housing market which has seen growth plumet from around 20% in 2004 to a quarter of that last year. Conservative leader David Cameron, also recently commited his party to opposing the packs saying they were an additional burdent to first-time buyers.
On the other side of the argument, the government claims consumers want the sort of protection offered by Hips and consumer body Which? has voiced its support for the packs.
Meanwhile, GMAC-RFC latest attack on Hips claims they could distort lender competition, arguing many lenders will offer to refund the cost of Hips to existing borrowers who are purchasing another property, as long as they use that particular lender to finance their next purchase.
It argues this practice could favour lenders with large market share resulting in reduced competition, in turn discouraging borrowers to shop around.
There is, it says, also the potential for duplication on surveys for property purchase because the government has failed to test the acceptance of Home Condition Reports from buyers.
But Nick Baxter, managing director of Mortgage Promotions, has called on lenders to “stop whingeing”.
Baxter says: “I’m certain [Hips] are going to happen, so let’s stop whingeing about them and get on with it.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
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