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Housing Market Swells

With the first stage of the Home Information Pack (HIP) scheme set to roll out come August, many people who were considering putting their property on the market have chosen to do so sooner, in an attempt to avoid the added cost that preparing the HIP carries.

Due to this rush of people wanting to avoid the HIP costs, the levels of housing stock on the books of estate agents has seen its largest monthly growth for three years. Ordinarily, an increase in supply would be met by a decrease in asking prices, however this isn’t in evidence, at least not at this stage.

More properties to choose from does however swing the market into the buyer’s favour, and although asking prices remain strong at present, this may not last as competition to sell increases. The irony of this is of course that by rushing to the market in order to avoid the HIP costs, sellers may have to settle for a lower price due to the increased competition.

In the short term, those who had their properties on the market prior to this rush, and who are keen to sell as they have their next property lined up, will likely find that they will be forced to reduce their asking price due to increased choice for the buyer, even if the influx of sellers aren’t necessarily ready to sell.

The true effects of this increased stock has yet to be felt, however house prices in London have seen a drop in the rate of inflation, giving an indication of what might be to come.

Recent increases in interest rates has begun to put pressure on the housing market, however this increase in available properties may well offset these pressures, which would make for interesting rate-setting meetings for the MPC in the coming months.