CLG analysis released
I have just read 84 pages of: Home Information Packs: Housing Market Analysis.
Oh what a thrilling read! Some of it even included some of those obscure mathematical symbols!
This report was first published - though not publicly available (until today) - in July 2007. It has very recently been updated with a further addendum published just two days ago (20th Nov 07), which briefly re-examines the possible impact of HIPs on the market in light of the current slowing housing market.
Some interesting stuff I've picked out:
Worse than worst
The report analysed three scenarios for a phased roll-out of HIPs, and their possible impact on the housing market:
- Intermediary scenario
- Optimistic scenario
- Pessimistic scenario
Intermediate scenario (Scenario 1)
- 1 August 2007: HIPs for houses with four and more bedrooms
- 1 September 2007: three bedroom houses
- 1 October 2007: all houses.
Optimistic scenario (Scenario 2)
- 1 August 2007: HIPs on Houses with four and more bedrooms
- 1 September: Whole market.
This scenario can be characterised as one in which the number of assessors available becomes sufficient to cover the whole market most rapidly, ie the most optimistic scenario that we have considered.
Pessimistic scenario (Scenario 3)
- 1 August 2007: four and more bedrooms
- 1 October 2007: three bedroom houses
- 1 December 2007: remaining houses
If December 1st was the worse-case scenario... what gives with the actual date of 14th December?!
Well, I might be able to conject a little on this: It seems the CLG originally timed HIPs to coincide with the seasonal market peak (June). Since the infamous May 22nd u-turn, however, it seems they have deliberately timed it for the absolute quietest period of the year.
And as we shall see (below); this quiet period has been beneficially compounded by an additional slowdown in the housing market!
Efficiencies
In the Main Report we noted that efficiency gains (if any) that HIPs produce for the home buying and selling process would probably not be apparent for at least six months, and this does seem to be the case so far.
Housing market downturn = Good time for HIPs!
In the report's addendum (updated 20th Nov 2007), it recommends taking advantage of the current market slowdown because fewer property listings will dampen price-falls.
With 60 per cent of the market already covered by HIPs and with a degree of uncertainty regarding future house price trends there are strong arguments for putting the whole market under the same regime, particularly in the context of more testing and uncertain market conditions.
Further, any further hesitation would likely be interpreted by the market as "negative":
From a market perspective closing off uncertainty regarding the HIP regime is likely to be seen as a positive step forward given the range of other pressures coming through. Indeed, were the HIPs rollout not now to be completed, it is possible that that might be interpreted as a negative signal for the future of the housing market – as if the government “knew something nasty” about the outlook for housing.
Source: Home Information Packs: Housing Market Analysis (pdf)
Tags: government, Home-Information-Pack
