MORE DELAYS IN THE HOUSING CHAIN

The 'shelf life' of a HIP continues so long as a property is on sale. It also continues to apply on homes withdrawn from the market and reintroduced within a year.

Assuming an average cost of £300 per HIP, including the EPC, the figures suggest total fees on HIPs - payable by homeowners - in the order of £570m a year.

Using the old VAT rate of 17.5%, the new tier of bureaucracy in the housing market could also have put nearly £100m into Government coffers.

One vendor of a home valued at £160,000 got a bill of £450 from his agent when his property came off the market. The bill included the cost of a financing arrangement for a HIP while the property was on sale.

After a decade of debate, HIPs were supposedly introduced to speed up property sales, beat gazumpers and stop buyers losing too much money on abortive purchases.

Have losses merely been switched to vendors- with little sign so far that the purchasing process is any quicker?

Henry Pryor says: "An awful lot of people clearly buy a HIP without completing a sale. But competition has brought the cost of a HIP down to around £300 in most cases, although prices are higher in complicated cases."

It is also possible that some agents, when fixing HIPs, add handling costs or an 'uplift' to ease their cash flow problems in difficult times. There is no set charge for HIPs, and deals are offered by agents include a long-term delayed payment option when homeowners pay interest on several months of credit while their home is on sale.

However, Ashley King at Simply HIP, which compiles HIPs at the request of solicitors and agents, says the realistic cost of a HIP is £175-plus - and possibly less if either purchaser or vendor in the transaction allows his company to handle the conveyancing.

King says: "In compiling a HIP, payment is made to local authorities, domestic energy assessors and the Land Registry, to fulfil the legal requirement for a HIP which now applies to vendors. Clearly these are paid for by vendors.

"We arrange thousands of HIPs, and I have not had one complaint about the costs of compiling them."

The more detailed Scottish sellers' pack, with a condition report and valuation, could cost some sellers more than £1,000, say agents.

By contrast, the pack in England and Wales was 'watered down' when home condition reports (HCR) were made voluntary in 2006. Some agents say it is ignored by most buyers.

Hugh Dunsmore-Hardy, of London agents Winkworth, says: "There is clear concern that HIPs as currently constituted in England and Wales do not represent value for money. If they are to become more important, the information which they contain must be more valuable, in terms of speeding up the purchasing process."

Dunsmore-Hardy thinks Government might see how Scottish packs work - with an eye to introducing them south of the border in perhaps 18 months' time "if it is still in power".

He thinks Government might ignore the January 2 deadline for 'first day marketing'- by leaving the present system in operation, for all its faults.

PRICE CUTS COULD LURE BUYERS ABROAD

The grimmer it gets in Britain, the more likely some of us are to consider buying a home abroad - with Southern Cyprus and Bulgaria edging ahead of Spain as most favoured destinations, claims a survey from SmartNew Homes.com.

The property website's managing director David Bexon says: "The significant increase in the number of consumers viewing overseas properties demonstrates the growing appeal of the overseas market, as people look to escape the gloom and doom of the UK economy."

Bexon maintains both Southern Cyprus and Bulgaria "offer strong annual growth of 9% and over", according to the latest Global House Price Index from leading agents Knight Frank.

In several overseas markets, developers must slash prices to shift surplus stock. Facing falling markets in Spain, the US and Britain, Taylor Wimpey is battling to raise cash as negotiations continue to secure an agreement with its lenders.

Andrew Hawkins, at London agents Chestertons, says swinging Taylor Wimpey price cuts of 30%-plus on more than a dozen sites on the Spanish Costas, and another half dozen on Majorca are interesting buyers previously put off by higher prices.

"In the past, Taylor Wimpey was tough on prices in Spain because it builds a quality product and does the paperwork properly", he says. "People pay extra for peace of mind - so they are interested to hear of prices are coming down, by as much as 36% on the Spanish mainland."

Just outside Marbella, on the Costa del Sol, two bedroom apartments inland start at £146,600 and on Majorca from around £182,000. Buyers need 30% deposits, and a Euro-mortgage would get cheaper if the pound bounced back from current depths.

Overlooking a golf course within a 15-minute drive of Alicante on the Costa Blanca coast, two and three bedroom Taylor Wimpey houses start around £155,000, a 28% price cut.

Andrew Hawkins says: "The Spanish market is clearly tough, but these are solid and secure properties which most buyers will use as holiday homes, with occasional scope for rental income."

Taylor Wimpey has also linked sales on all its developments - in Majorca and on the Costa Del Sol, Costa Blanca and Costa Azahar - with the accreditation scheme Safe Buying Experience (SBE), to re-assure buyers that their ownership is secure and cannot be challenged in future.

:: INFORMATION: Chestertons (0203 040 8210); details of Safe Buying Experience on www.safebuyingexperience.com.

VENDORS READY TO SLASH PRICES IN SEARCH OF A DEAL

Is it possible that the crisis in the housing market has become a vicious circle - the grimmer the warnings and statistics from commentators and surveys, the more likely are buyers are keep away, even if their finances are in place?

That thought did occur to me on seeing the latest statistics from Globrix, the property search engine, which hit the headlines by claiming that the national average price cut over the past two weeks by desperate vendors has reached £16,491.

In London, said the survey, the average price cut is a staggering £48,131.

Outside the capital, Globrix names the top ten towns showing the biggest falls are Birmingham, Bristol, Manchester, Norwich, Peterborough, Leicester, Coventry, Liverpool, Colchester and Nottingham.

However, many of those towns saw the rapid development of city centre apartments sold in bulk to unwary investors who may now be struggling to find tenants. It is hardly surprising if some of these owners are slashing prices to get out, particularly if they are squeezed by mortgage repayments.

In Nottingham, says Globrix, the average price cut is a worrying £13,777; in Leicester it is £18,008 and in Bristol, it is a stonking £20,452. In Colchester, the drops apparently average £14,158.

Globrix director Daniel Lee says: "At last sellers are starting to recognise that asking prices are at unrealistic levels.

"Buyers now hold all the cards and sellers need to realise that if they want to sell in this market, they may have to accept an offer they wouldn't even have considered six months ago."

However, the Globrix charts include a column which details the percentage of properties subject to price cuts.

That is never higher than 2.2% recorded in Croydon, while the margin of the price cut is highest in London at 7.3%, followed by Liverpool (7%).

To me these figures do not signify the collapse of all vendors who have been seeking unrealistic prices; rather, they show a small minority prepared to accept five figure price cuts, possibly to go liquid ahead of whatever horrors may await in 2009.

David Lawrenson, a market commentator and investor on his own account, maintains: "Falls are widely variable according to property types. Flats have come down heavily, particularly if originally sold at crazy prices.

"But I have been looking to invest in two and three bedroom terraced houses, freehold, in South London suburbs, and they are only down by about 10%, with possibly a further 8% fall to come. I believe a succession of interest rates cuts will put a floor under price falls."

Lawrenson says a quality terraced house in a desirable South London suburb like Brockley is down from £275,000 to around £250,000. In six months' time, he thinks, it could bottom at £210,000 - 215,000.

:: INFORMATION: David Lawrenson's housing market blog is on www.lettingfocus.com.

BUYERS SHOULD BEWARE OF FESTIVE LOOPHOLES

The magical and timeless appeal of Christmas means that homebuyers who get carried away can have big regrets in the New Year, warns Jo Aldridge, regional director of home-hunting agency Stacks Property Search & Acquisition.

She urges buyers to take a 'bah humbug' walk around a potential next home to ponder plusses and minuses like these:

:: Huge fireplace: a blazing open fire looks great at Christmas, but think how little heat it gives out and the draughts, and you realise why wood burning stoves are catching on.

:: Ceiling high enough for huge Christmas tree: think of the fuel needed to heat all that space above head height.

:: Within walking distance of church and pub; what about throwing-out time on Saturday nights?

:: Huge dining room: great for Xmas lunch, but will it gather dust for much of the year?

:: A hillside: popular with sheep and possibly a good long-term bet as land prices hold firm. Owning chickens, pigs and vegetables might cut supermarket spending.

:: A stable: possibly another good move. Outbuildings can become an office, granny annexe, or even extra space for growing children.

:: INFORMATION: Stacks Property Search & Acquisition (01594 842 880).

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