Some home truths about the joint ten­ants of Down­ing Street

How will the Lib Con coali­tion govern­ment af­fect the prop­erty mar­ket? Sharon Dale re­ports.

Yorkshire Post - Property - - PROPERTY -

IT may not be top of their agenda, but the Lib Con coali­tion could soon bring big changes to the prop­erty world.

The biggest bomb­shell for the 3,000-plus em­ploy­ees in the Home In­for­ma­tion Pack in­dus­try is the abo­li­tion of HIPs.

Both Con­ser­va­tives and Lib­eral Democrats have agreed to scrap the com­pul­sory packs that cost sell­ers at least £300 though home­own­ers will still need to have an en­ergy per­for­mance cer­tifi­cate cost­ing about £50 be­fore they can put their prop­erty on the mar­ket.

Kevin Hollinrake, MD of Hunters es­tate agency, says the sooner HIPs are scrapped the bet­ter.

“I think HIPs be­ing scrapped will in­crease the sup­ply of prop­er­ties com­ing to the mar­ket.

“The Queen’s Speech will be made within the next few weeks and I ex­pect that the abo­li­tion of HIPs will be in­cluded in that so the ef­fect will be al­most im­me­di­ate.”

Mike Ock­enden, di­rec­tor gen­eral of the As­so­ci­a­tion of HIP Providers, is still cling­ing to the hope of con­sul­ta­tion over the fate of the packs.

He main­tains that since they were in­tro­duced in Au­gust 2007, they have re­duced the num­ber of failed sales from 28 per cent to nine per cent and he is lob­by­ing for a re­vised ver­sion to re­main a com­pul­sory part of the sell­ing process.

He sug­gests that Ex­change Ready Packs, a slightly en­hanced HIP cost­ing about £200, would be a good al­ter­na­tive.

Aimed at speed­ing up the buy­ing and sell­ing process, these would in­clude HIP doc­u­ments such as the en­ergy per­for­mance cer­tifi­cate, the sale state­ment, which ex­plains who owns what, a stan­dard searches doc­u­ment and ev­i­dence of own­er­ship.

The ERP would also have a con­tract for sale pre­pared by a lawyer, Seller Prop­erty In­for­ma­tion and Fix­tures and Fit­tings forms, copies of plan­ning per­mis­sions, build­ing reg­u­la­tions con­sents and guar­an­tees and a lawyer’s cer­tifi­cate con­firm­ing the pack is ex­change-ready.

But it still won’t con­tain what many feel is the ul­ti­mate deal­breaker – a sur­vey.

“If HIPs are scrapped al­to­gether, 3,000 peo­ple di­rectly and 10,000 will be af­fected in­di­rectly That’s 3,000 tax­pay­ers out of the sys­tem.

“The Govern­ment will also lose £100m a year in VAT from HIPs,” says Mr Ock­enden.

“The ar­gu­ment that HIPs stopped spec­u­la­tive sell­ers isn’t strong be­cause we’ve al­ready got too many sell­ers and not enough buy­ers. More homes on the mar­ket would mean a down­ward pres­sure on prices. I don’t think scrap­ping HIPs is in any­one’s in­ter­est.”

Pa­trick McCutcheon, head of res­i­den­tial at Dacre, Son and Hart­ley es­tate agents, dis­agrees and says that al­though they were a good idea in the­ory, in prac­tice they have been an ex­pen­sive waste of time.

“They sounded like a good idea to speed up the sell­ing process but they have a short shelf life and the in­for­ma­tion is dated within three months.

“I can count on the fin­gers of one hand the num­ber of buy­ers who have asked to see one and they are a mill­stone for sell­ers. They won’t be missed.”

Other coali­tion driven changes af­fect­ing prop­erty own­ers in­clude the in­her­i­tance tax

The Queen’s Speech will be made in a few weeks and I ex­pect the abo­li­tion of HIPs will be in­cluded.

thresh­old. The Con­ser­va­tives said they would raise the thresh­old to £1m but have agreed to put the plan on hold to ap­pease the Lib­eral Democrats.

There are grave con­cerns that Cap­i­tal Gains Tax will rise to help fund the bud­get deficit and some fear it could rise from 18 per cent to 40 per cent.

This will have a ma­jor ef­fect on sec­ond home own­ers, pro­fes­sional land­lords and the le­gion of amateurs who have en­tered the buy-to-let mar­ket over the last few years. If these in­vestors sell their prop­er­ties to re­alise profit, they could pay a high price to the Trea­sury.

There could now be a rush to sell be­fore any CGT rise.

The good news is that in­ter­est rates should re­main low.

Martin El­lis, chief econ­o­mist at the Hal­i­fax, says: “The main fo­cus of this Govern­ment will be the bud­get deficit and cut­ting pub­lic spend­ing.

“They also want to keep the econ­omy grow­ing and to do that they will wan to to keep in­ter­est rates low.

“We are likely to see in­ter­est rates stay­ing low for the next year and pos­si­bly be­yond.”

Both the Lib­eral Democrats and the Con­ser­va­tives have promised green grants and in­cen­tives for house­hold­ers to

NEW AD­DRESS: Nick Clegg and David Cameron in the gar­den of 10 Down­ing Street.

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