HIPs, Wastes Wasters.
A national HIP provider, myhomemove, has given credence to a little reported fact regarding HIPs.
This effect of HIPs was also highlighted in a post on this my ActionMove website back in July 2009 entitled “Have HIPs inadvertently Stabilised the Housing Market in the UK”
myhomemove told the Law Gazette this week, that the number of failed transactions, in which it has been involved, has been reduced to just 9% since the full introduction of HIPS on 6th April 2009.
This data has been sourced from the 10000 HIPs which have been produced by the company.
Many Estate Agents are arguing for the abolition of HIPs, but not many will tell you how many sales fall through by the so called “Wasters” who put their property on to the market, but with no real intention of selling.
Traditionally, a “no sale no fee” basis meant that Sellers could put their properties on the market with impunity, with no financial recompense to their Estate Agent if they at a later stage decide to withdraw their property from the market.
At Clutton Cox we ran an estate agency department for some 5 years, and were astonished by the fall through rate, where Sellers merely changed their minds. And we ended up with no fee but considerable outlay in time and advertising.
The Governments own figures prior to the introduction of HIPs in August 2007 revealed an average fall through rate of 23%, so a reduction to 9% is a cause for praise for the oft maligned HIP.
It is also of course true, that the Housing Market has been somewhat erratic and may not be recognised as a normal market .
Nevertheless, if a trend is established whereby the commitment to pay upfront for a HIP, can result in a smaller fall through rate, Estate Agents may even begin to see more benefits in Hips than fewer.