SPLINTA Proves HIPs Will Be Useless
Release date: 5th June 2006
HIGH PRICE HIPs WON'T HELP HOME SALES
Results from a survey of over 1,800 home sales in England and Wales show that despite its high cost the Home Information Pack, due to made mandatory from June 2007, will fail to prevent deals falling through.
Leading anti-pack campaign group, SPLINTA (Seller Pack Law is Not the Answer) analysed 1,870 property transactions set up in February 2006. By the middle of May 1,272 (68%) had successfully proceeded to exchange of contracts. 352 (18.8%) sales had fallen through, leaving 266 (14.2%) properties withdrawn or still on the market.
137 (7.3%) of transactions were the subject of a renegotiation in the agreed price between acceptance of the original offer and exchange of contracts.
The study looked at the reasons why transactions broke down:
16 (0.8%) sales failed because the seller received a higher offer from another buyer.
41 (2.2%) failed because of an adverse survey report.
15 (0.8%) failed because of a lender's adverse valuation inspection.
31 (1.7%) failed because the buyer could not get a mortgage.
76 (4.1%) failed because of a broken 'chain' - where a related sale or purchase did not proceed.
65 (3.5%) failed because of a change in the circumstances of the seller - e.g. job loss, bereavement, divorce etc.
108 (5.8%) failed because of a change in the circumstances of the buyer - e.g. job loss, bereavement, divorce etc.
The respondees to the survey - estate agents from across the country - were asked to consider whether a Home Information Pack might have helped to save the aborted transactions. Knowing the factors that caused the failed deals the agents reported that just 25 (1.4%) might have been saved by a HIP.
Nick Salmon of SPLINTA said: " The government thinks that HIP's will make property buying a more certain process but this survey points to the fact that they won't. Taken together the main cause of failed transactions is a change in the circumstances of the buyer or seller and you can't legislate for that. The HIP will cost home sellers £1,000 yet give little more certainty in the process than at present. This study provides a warning to government that it should carry out much more extensive research of the HIP before proceeding. Their headlong rush to implement the scheme and their dismissal of constructive criticism makes HIPs a disaster waiting to happen. We urge housing minister Yvette Cooper to exercise good judgement and call the scheme in for review."
ENDS
Further information: Nick Salmon 07831 805455
Note to Editors.
The SPLINTA campaign is supported by over 1,400 firms of estate agents, surveyors and solicitor/conveyancers with over 2,700 offices in England and Wales. The group welcomes cost-effectively beneficial improvement to the home buying and selling process but opposes HIPs on the grounds that it that will not provide a cost-effective improvement.
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Nick Salmon FNAEA
Joint Co-Ordinator SPLINTA
c/o Lurot Brand
37-41 Sussex Place
London W2 2TH
020 7479 1999