Hips distortion leads to asking price rise

Average property prices in the UK increased by 2.7 per cent last month, it has been revealed.

A survey by property website Rightmove found the property market bounced back from August's 2.6 per cent asking price decline to push the rate of annual growth back up to 10.4 per cent.

The rise has been largely attributed to the market-distorting introduction of Home information packs (Hips) for three bedroom houses, which came into play on September 10th.

According to Rightmove figures, the first week of September saw a 65 per cent rise in the number of three bedroom properties in the market, which acted to boost asking prices from £235,642 to £241,642.

"Legislative tinkering involving future cut-off dates has a history of unbalancing markets," commented Miles Shipside, the commercial director of Rightmove.

"In a stable market this presents fewer dangers, but in today's more sensitive financial environment the effects can be more exaggerated."

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