Press Release Summary: Few experts, if any, doubt that the UK is now seeing the end of its housing boom, as month after month sees price rises below one per cent and many regions see prices actually falling. The effects of higher interest rates seem to be filtering through and the view that the boom is over has now been endorsed by former US Federal Reserve Chairman Alan Greenspan.
Press Release Body: Few experts, if any, doubt that the UK is now seeing the end of its housing boom, as month after month sees price rises below one per cent and many regions see prices actually falling. The effects of higher interest rates seem to be filtering through and the view that the boom is over has now been endorsed by former US Federal Reserve Chairman Alan Greenspan.
Mr Greenspan told the Daily Telegraph \"there are going to be some difficulties\" ahead for the housing market and indeed the UK economy as a whole, part of which is to do with the much-discussed credit crunch following the sub-prime meltdown, although he did say the UK economy had been reformed enough to withstand the overall effects of the present turmoil fairly well.
However, others have suggested there will be another reason for a major downturn in the housing market. Property website Rightmove said on Friday that asking prices for homes fell by 2.6 per cent between August and September, a fall which it blamed on the introduction of the controversial home information packs scheme (Hips) on August 1st.
Hips initially applied just to homes with four bedrooms or more, a category of properties which Rightmove states fell in availability by 41 per cent in August.
Miles Shipside, Rightmove\'s commercial director, was certain that the two facts are connected, saying: \"While there was a surge of four-bedders coming on to the market for just one week at the end of July, there has been a much greater dearth of them in the four weeks since.\"
He added that \"impulse sellers\" would be put off entering the market due to the cost of obtaining a Hip, a view which has previously been expressed by the Royal Institution of Chartered Surveyors (Rics).
Commenting on the figures, Rics chief economist Oliver Gilmartin said the body expected a \"sharp\" housing market slowdown to continue, but he did not state that Hips was to blame and suggested the \"biggest threat\" to the market was still the global credit crisis.
However, Rightmove is certainly not alone in flagging up a fall in houses coming onto the market. Letting and sales agents Hamptons said stock levels had fallen by 15 per cent since Hips were introduced.
Unsurprisingly, the Hips industry has defended itself against the claims made by Rightmove. Mike Ockenden, director general of the Association of Home Information Pack Providers, said the claim that Hips was to blame for the August housing situation was \"totally unfounded\", adding that: \"A lack of consumer confidence resulting from the recent turmoil in the market cannot be attributed to Hips and it is short sighted to ignore the other contributing factors.\"
Mr Ockenden added that once the Hips had been applied to the whole housing market people would \"start to see the real benefits that they can offer both buyers and sellers\" in terms of transparency and the faster processing of sales.
One argument advocates of Hips may indeed have on their side is that it is a new measure and after all the initial fuss, things will settle down. London-based estate agent Chesterton certainly believes so, Homemove reports, arguing that Hips will be seen as a normal and standard part of the process six months from now. In addition, the firm argued, four-bedroom homes tend to come on the market less in August as it is the holiday season.
The arguments about the impact of Hips show no sign of abating and in the months ahead the outworking of higher interest rates and global credit conditions may make it difficult to fully assess their affect on the market. Furthermore, the extension of the scheme to cover three-bedroom homes only occurred on September 10th, with no date yet set for further expansion of the scheme. Thus a conclusive assessment of the merits of the arguments in the Hips debate could have to wait for some time yet
2022
