HIPs - what the experts say

Everywhere we look we see differing views on the state of the housing market.

The facts are that the housing market is bound to be affected by the recent changes that we have seen to the industry; five interest rate rises this year to date, uncertainty caused by the Northern Rock fiasco and the introduction of Home Information Packs (HIPs).

The introduction of HIPs in september resulted in the market becoming saturated with stock as agents across the country reported an incredible increase in the number of properties coming onto the market prior to the HIPs deadline date.

This is in complete contrast to the situation since HIPs were introduced, with the number of properties coming onto the market dropping drastically, as a direct result in the added cost to sellers of a HIP (£300 to £500).

The affect on the market of a rise in the mortgage rate is obvious, however the knock-on affect of this is far more of a concern. Many mortgage lenders are still offering reasonable mortgage rates but at a cost, with fixed and capped rate mortgage deals currently carrying arrangement fees in excess of £1,500.

However, the long term picture looks positive. Unlike in the early 1990s when the housing market last suffered a collapse, the picture today looks very much brighter.

Interest rates have still increased, but they are still relatively low. In addition, the economy is strong and unemployment is low, and so the current downturn in the market is hopefully no more than a short-term blip.

A decrease in interest rates in 2008 will give consumers confidence and lead ot a pick up in the housing market.