Friday, May 1, 2009

Cambridge’s 42 percent Slump in Home Sales

“New figures expose how Gordon Brown’s recession has sent our local housing market into a 42 percent freefall. The impact on home sales is being made worse by Labour red tape and taxes,” says Cambridge’s Conservative Parliamentary Spokesman, Richard Normington, “it is time for action on the real economy, not tinkering with tax bands in 2010.”

Cambridge House Sales

Year Sales

2006 – 2,363

2007 – 2,243

2008 – 1,382

-42% Change since 2006.

Source: Hansard, 24 March 2009, col. 314W and Hansard, 24 April 2009, col. 969W.

A Better Way. Conservatives call on the Government to use its emergency powers to suspend the Home Information Pack’s (HIPs) immediately, and then abolish them completely. We also want the stamp duty threshold for first-time buyers to be raised to £250,000, taking 9 out of 10 first-time buyers out of stamp duty altogether, giving an important boost tohousing market.

Labour’s Land Registry Fees – UP. On 14 April, the Land Registry announced massive hikes in the fees charged for registering a property and for property searches. Fees will increase by as much as 33% and will see the cost of registration of a property worth between £100,000 and £200,000 go from £150 to £200.

The Land Registry ironically blames the housing market crash for the hikes: “As a government agency with trading fund status we need to cover our operating costs and return on capital employed from our fee income. Due to the downturn in the property market and the deterioration in the economy generally, our intakes of work fell heavily in 2008 and 2009 leading to an unsustainable reduction in our fee income.”

Labour’s Red Tape and Trouble: The Home Information Pack:

· HIP required before you market your home: The Home Information Pack rules apply to England and Wales. Since 6 April 2009, a seller must have a completed Home Information Pack before putting their home on the market. Previously, they merely had to commission a Pack, which can take many weeks to assemble – especially in the case of complex leasehold properties. This is the end of the so-called ‘first day marketing’ provisions.

· Property searches must be complete: In another change to the HIP rules, Home Information Packs will also take longer to produce. From 6 April 2009, every property search “must be complete”. Previously, insurance could be taken out to protect against the delayed searches missing vital data. This previous provision was introduced because of the delays in obtaining information from local authorities.

· Pointless property questionnaire: All Home Information Packs must also now have a new ‘Property Information Questionnaire’ that must be completed by the seller before the home is advertised. The questionnaire includes questions on past history of flooding, past insurance claims, treatment for dry rot or damp, when electrical wiring was last checked, if planning permission or building regulation approval was given to past structural alterations and rights of access. However, there is no external checking of the accuracy of the form, and in all those cases, the seller can merely tick a box “don’t know”.

· HIPs unreliable and add to costs: The independent Carsberg Review in June 2008 warned that HIPs were the “worst of both worlds”, adding to red tape and costs, but not providing reliable information. It warned that they were duplicating costs, since “a substantial number of conveyancers ignore its existence and recommission searches on receiving instructions from their buyer client” (RICS, Sir Bryan Carsberg’s Review of Residential Property, June 2008, p.42).

1st May 2009

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