HIPs ban boosts housing supply

The Government’s decision to abolish Home Information Packs (HIPs) has helped push more supply onto the market, according to the Royal Institution of Chartered Surveyors (RICS), as house prices edged up in May.

The RICS survey showed that the number of surveyors reporting a rise in new instructions rose from 11% in April to 21% in May, a trend it predicts will continue in the near term.

In addition, 73% of surveyors said they expect the HIPs ban to lead to a higher level of instructions, with the actual increase in supply predicted to be around 15%.

Meanwhile, buyer interest has continued to increase, with 10% more chartered surveyors reporting a rise in new buyer enquiries, up from 9% in April.

Activity is expected to increase in the coming months, with many surveyors more optimistic about the market. The average number of completed sales fell by nearly 5% pushing the sales to stock ratio, a key indicator of future house price inflation, from 28% in April to 27% in May.

When it came to house price growth, 22% more chartered surveyors saw a rise than a fall in May, up from 19% in April. However, Northern Ireland, Wales, Yorkshire and Humberside and the West Midlands all continue to see a fall in prices.

Ian Perry, spokesman for RICs, said: "Surveyors are generally confident that sales will continue to pick up over the summer months. The increase in supply as a result of the abolition of HIPs is helping to support this optimism despite continuing concerns about mortgage finance. A higher level of instructions should, meanwhile, also lead to a flatter trend in house prices in the latter part of the year."

Peter Bolton King, chief executive of the National Association of Estate Agent, commented: "We have been saying for some time that the end of HIPs would provide a boost to the housing market and provide a further incentive for people to move.

"Indeed, some potential sellers may have held back in May to wait until the decision on HIPs was made and will now come in to the market during June.

"Whilst house prices may dip in certain areas as additional properties come onto the market, in other areas, any increase in supply would still not be enough to meet the current demand.

"In those areas of high demand where supply does increase, we might see a stabilisation in the rising prices of recent months."