HIPS abolition boosts housing supply – RICS

THE Government’s decision to abolish Home Information Packs has boosted the supply of housing in the West Midlands, surveyors have said.

The region’s Royal Institution of Chartered Surveyors said its latest UK Housing Market survey showed 22% more surveyors across the UK had reported a rise rather than a fall in house prices – up from 17% in April.

However, while surveyors in many parts of the UK are still reporting house price rises, in the West Midlands 3% more surveyors than in April reported prices declining.

The pattern was the same in Northern Ireland, Wales and Yorkshire and Humberside.

Since the announcement about HIPS, RICS said more supply had been pushed onto the market.

The net balance of West Midlands surveyors reporting increases in new instructions moved from 16% in April to 26% in May, and 21% nationally.

The institution said this trend was likely to continue in the near term.

In response to an additional question included in the survey, 73% of surveyors nationally said they expected the decision on HIPs to lead to higher levels of new instructions, with the actual increase in supply anticipated to be around 15%.

The survey also found that buyer interest continued to increase, albeit at almost the same pace as in April across much of the UK including the West Midlands, where 25% more chartered surveyors reported a rise rather than a fall in new buyer enquires – up from 21% in the previous month.

Activity is expected to rise over the coming months with many surveyors slightly more optimistic than previously despite fears of cuts.

The sales expectations net balance rose from 27% to 31% nationally, and to 25% in the West Midlands. However, the average number of completed sales fell by nearly 5% nationally pushing the sales to stock ratio – a key indicator of future house price inflation – from 28% in April to 27% in May.

Richard Franklin, of Edward Gallimore and RICS West Midlands spokesman, said: “Surveyors in the region are generally more confident than before that sales will 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 flatter trend in house prices in the latter part of the year.”