Agents, particularly across London and the south-east, are struggling to find anywhere near enough stock to sell as the normal autumn bounce has failed to materialise.
Propertyfinder has reported that the number of homes on the market this autumn is at its lowest since the aftermath of 9/11.
It found that agents within the M25 currently have an average of 26.4 homes to sell, compared with 41.8 last September and 32.3 in March this year.
Rightmove said today that in the whole of London, just 10,500 new listings have been added to stock in the last month – but 13,591 have come off.
That means that for every ten properties leaving the market, just eight came on.
Ivor Dickinson, managing director of London agents Douglas & Gordon, said: “We had 500 properties to sell last August and in the peak months it was probably around 800. Now we have 230. I am concerned. I expected to be flooded with properties in September and I’m not.”
He blamed HIPs, including Property Information Questionnaires, for deterring sellers.
He warned that the current market had been “a disaster waiting to happen”.
Douglas & Gordon has 12 offices, meaning there is an average of just over 19 properties for sale per branch.
Rightmove also reported today that London’s property drought has meant asking prices have shot up by an average of £3,503 in the last few weeks.
London agent slams HIPs for cutting instructions to trickle
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Comments
As an experienced estate agent of 15 years I must defend the HIP. Before HIPs the talk was about the length of time the sale took to complete. Solicitors not commisioning searches till there was a mortgage offer and trying to get paid by the vendor when those speculative sellers decided to pull out.
There are problems with the residential property market. A lack of buidling leading to a continued lack of supply of houses. An oversupply of town centre appartments. The availabilty first time buyer mortgages without a silly deposit. Investors continuing to buy due to the poor return of money on deposit.
Many agents use the HIP by providing it with no up front cost a geat way of tying vendors into longer sole agency contracts as well as a useful revenue stream.
So back off the HIP and look at the bigger picture; supply, stamp duty, job insecurity and availabilty of finance.
Colin, that wasn't a very sensible comment, was it? Stick to posting on other forums - you're clearly not an agent and this is an 'industry' website that can do without idiots like you.
Like the agent only website The Little House Company has experienced a decline in inventory in London. Manchester is proving to be positive with home sellers and buyers creating for us the most activity out of UK cities. HIPs without a doubt have been responsible for a slowing in our sellers private sellers putting homes on the market.
Roll on the Law society's review and suggestion that Solicitors become Estate Agents handling the whole sale process, then it would go to one set of hypocrital incompetents to the next load!
The disaster is HIP's themselves - they should go!
Orchard, not many sales actually fell apart but because everything was done last minute, the stess became unbearable for many. Hips are not perfect, my point is they need adapting (re-naming) not scrapping. Watch this space!
Orchard - I absolutely agree. In 23 years the number of problems caused by the problems described are few and far between. besides, how many average buyers are able to understand the restrictive covenants and plans. Personally, I think it causes more problems as a little learning is a dangerous thing - let the lawyers deal with the legals - our role is to sell, not act as quasi lawyers trying to spot problems before they exist.
Very true Uncle Bertie. All that lovely information to start with with: office copies and whatnot. A plan I think costs £4 and the office copies another £4. All of these are available instantly online from the land registry websitem if the property's registered (which most are). Anyway a good agent/solicitor relationship should have provided these up front and often did. What we didn't need was regulation to bring them in. I suspect,as I've yet to move, my solicitors will have to do the whole search thing all over again anyway - so the point is the costs will be duplicated. In reality though, how many sales actually fell apart in the pre-hip days due to problems with the vendor's title?
There are many reasons why stock is not as freely available as it was - notably the cost of HIP's detering speculative sellers, but also the fact that we are in a recession, and confidence is very shaky. In the early nineties in our town there were only 8 estate agents - now there are 25 or so - this also means that the slices of the cake are very thin, when it comes to our share of the market, compared with the last recession. Too many agents for too little work - result - fee wars and over valuing. This is a self destructive industry from time to time, and I am afraid it will always be thus.
EW, do you offer copies of the Hip to your buyers? Do you tell them to check the Land Registry plan to ensure that it reflects exactly what they think they are buying (or would you rather wait for the sale to be close to exchange before "the boundary is in the wrong place" bombshell is dropped)? Do you suggest they look at the completed PIQ? Do you suggest they look at the Office Copies to see if there are any unusual covenants or restrictions? There are some good, useful bits in the Hip if you can find the time to source them and pass them on.
surrey agent - 600 properties - 700 offices!! Just kidding!
I dont blame HIPs entirely, but it has undoubtedly deterred the 'market testers'
Some sensible comments on this topic so far by experienced agents and some not so sensible comments by inexperienced agents. Of course Hips are, in part, to blame for the lack of stock and I will tell you why - it's an up front cost whereas the other costs are usually paid on completion out of the proceeds of an associated sale (first-time buyers excluded from that statement)and therefore are not viewed as 'real' money. How often have you sold a house and earned a fee from a Vendor who was just testing the market but then suddenly saw a house they wanted to buy? I bet loads of times. That type of sale has now all but dissapeared and has contributed to the lack of stock that we are all experiencing. In this economic climate nobody is going to part with £300 for a Hip unless they are completely commited to moving house. But as I said, we all know how valuable those 'sort-of motivated' Vendors used to be to us because a lot of them did move and that's now what them arket is missing. The debate on Hips has gone on for too long, they are useless and are only defended by Hip providers or agents who have little experience on which to base a proper comment.
Sorry guys, but sometimes it's got to be said like it really is.
hIPS aren't to blame for this. There has been a shift in mentality towards saving and paying off mortgages and debt because the party is well and truly over. hIPS should be abolished as they were only brought about to generate VAT and keep unemployment figures artificially down.
EW - if you have 600 properties for sale can I come and work for you?!! (unless you are in Dubai :-))
HIPs will be remembered as a complete waste of space and one of the worst decisions of any government. Of course vendors have been deterred from listing their homes! You would think that a sensible government with a responsibility to look after our interests would try to help a fragile housing market. Not this one - They're totally incompetent from The Great Depression (Brown) downwards. Bring on the election - they'll get slaughtered and let's hope that we never see a Labour party in power again!
Average asking price of a property in Fulham & Hammersmith now £663,940 (says Rightmove this morning)
Average sold price in Fulham & Hammersmith now £418,551 (says Land Registry last month).
Average fee charged by agents 1.4% (says NAEA)
Average deposit required 25% (says CML)
Average 2 year fixed rate mortgage 5.18% (says MoneyFacts)
Stamp duty on an average house in Fulham & Hammersmith 4%.
Average cost of a HiP now £325.
So, in Fulham & Hammersmith a typical seller has to pay £5,850. The average buyer has to find a deposit of £104k and £16,700 stamp duty.
The cost of a HiP may be off putting but can it be responsible for the devastating fall in the number of instructions?
HIPs are pointless and dont work. We have 600 properties and only 3 people have requested a copy of the HIP in the last week. That is the true measure of their effectiveness. They will be history within the year.
Do you really think the market will be better off without HIPs?
It will not make one difference if they go the market will remain like it is until this bankers mess gets sorted.
The real reason you guys are moaning is because people can't afford the stupid rates to get a mortgage in the first place.
Get real people HIPs are by far the least of our concerns right now.
I dislike HIPs, but the figures quoted by D&G miss the point.
"We had 500 properties to sell last August and in the peak months it was probably around 800. Now we have 230"
Throughout this period, HIPs were required. They aren't new. Maybe something else is to blame - like job security, getting a mortgage, negative equity, properties being rented to tenants when they couldnt sell last year, lack of new builds, Robert Peston.....
As someone who is thinking about moving house at the moment I can tell you what is putting me off.
Firstly, and most importantly stamp duty. Having paid just over £2,000 in duty last time (7 years ago) I will have to pay over 20,000 this time - just to stay in the same type of property. For me that amounts to an extra tax of a year's wage - just because I want to move - So why bother, unless I can find a stunningly good deal - and with so many buyers around at the moment there aren't any.
Secondly I must agree that HIPS are a complete waste of time and amount to another effective tax of £250 just tell me I live in an energy disastrous victorian house and provide me with a load of incomprehensible legal information (much of which is probably missing)- just adds insult to injury.
Roll on the tories. This lot have just created an expensive nonsensical bureaucratic nightmare, with the Law Society and the NAEA being completely ineffective at presenting the bigger picture.
O
This was one of those side effects of HIPS that was obvious to any one in the Estate Agency industry that had any economics knowledge. The UK market has always been speculative and most experienced agents will know sellers that just want to ‘test the market’ and then get the moving bug and end up selling. These often accounted for about 30% of the market. All that’s gone now!, well done to the government and as a reward you get house price inflation in a declining economy to sort out !! geniuses
DIRECTOR
BOURNES ESTATE AGENTS LTD
The disaster is HIP's themselves - they should go! They were the 'brainchild' of a silly inexperienced minister who did not understand the property market and used a personal sale to paint the whole market the same and introduce a stupid additional layer of costs. Sellers should be required to instruct conveyancers at the start. Solved. EPC's are an EU directive - a seperate issue.
And there was me thinking that the real barriers to selling a home included being stuck in negative equity, being stung by the mortgage companies if you need to have a new mortgage and a hike in unemployment in the area.
Surprise, surprise HIP's are to blame again. Do you you think we should tip off Scotland Yard becuase they could be responsible for the Jack the Ripper Murders. Why not as they seem to be blamed for everything else. If people are really serious about wanting to sell their properties then HIP's and PIQ's aren't a barrier. If they are then more fool them for being so short sighted.
Maybe because it's got something to do with there HIP prices some estate agents rip people off.
Or maybe its the personal touch that is failing.