Interest rates are down again, but can you hear cheering? No, I thought not. The reason for the restrained reception to the news that the base rate now stands at 0.5 per cent is the knowledge that only certain homebuyers will benefit. These are the people who would be eligible for Abbey’s new 2.99 per cent fixed-rate mortgage, which is available only to those who need to borrow up to 60 per cent of a home’s value.

The Bank of England aspires to improve the supply of finance for everyone else through “quantitative easing” — printing money, lots and lots of it. But, until they see the colour of this money in the shape of decent loan deals, homebuyers without chunky deposits or equity will remain dubious.

Among the fortunate few likely to receive a warm welcome at the Abbey there is a different mood. The nearness of deposit account returns to size zero is set to direct even more of these individuals towards estate agency branches. As we have reported, little sentiment is evident in the deals of this cash or equity-rich minority, even if they have their dream home in their sights. They focus on properties that are already reduced and bid at 10-15 per cent below this price. And so they are acquiring homes at 35-40 per cent of their summer 2007 values.

The pattern of these purchases — and the slogan “Property is the new cash” — is causing some professionals to sense a turning point. Ed Mead, of Douglas & Gordon, a London estate agency, is bold enough to declare: “We are 10-15 per cent off the bottom of the market.” This view will be contentious, especially since so many are still shut out from the market. They can only hope that, after two ineffective bank bail-outs, it will be third time lucky with quantitative easing.

Cool? No; totally unhip

The recent buyer of a terraced house was unimpressed: “I did read it. But much of the stuff in it was irrelevant — and it didn’t make our purchase any smoother or quicker.”

This mother in her mid-thirties was talking about the home information pack (Hip), the dossier that is supposed to reduce the red tape and the nasty last-minute surprises associated with house purchase — and so speed up transactions and increase their number. Another objective is to raise eco-consciousness through the energy performance certificate (EPC), a key component of the Hip.

These aims are not being met, as a new report from a committee of Members of Parliament spells out. The MPs think the Department for Communities and Local Government (CLG) has mishandled Hips policy and argues that the market “needs more robust and effective initiatives”. This is a widespread view, summed up by Nicholas Leeming, of Propertyfinder : “Sellers don’t know what Hips are and buyers ignore them.”

The buyer to whom I spoke knew that the Hip was meant to put her in full possession of the facts about her new family home. But her doubts began when the inspector called to complete the EPC on the house she was selling. The cursory nature of the loft insulation check made her doubt whether the EPC could be a reliable guide to any property’s energy efficiency.

The CLG is trying to make Hips more relevant through some upgrades. From April 6 a home must have a Hip from the first day that it is marketed — currently there is some leeway. There will also be a new property information questionnaire, giving the lowdown on flood risk, leasehold details and parking. These extras ought to useful, but many buyers will still be suspicious of the questionnaire because it is provided by the seller.

Whatever the response to the new-look Hip, it seems as though the CLG must persevere with the scheme or suffer the embarrassment of abandoning its only major housing market reform. The MPs’ report reveals that Margaret Beckett, the Housing Minister, seems to have reservations about Hips. This is oddly encouraging, as it indicates that she knows how much time and energy has been wasted in the implementation of the project.

Did this contribute to the lax decision-making process at the CLG that allowed the wrong homes — too many flats and not enough houses — to be built during the boom? There are now concerns that too few homes of any kind are being put up. This threatens to create a shortage of supply, fuelling another price spiral once the recovery arrives. The lack of success of Hips to date is regrettable, but scarcely a tragedy. An ill-thought-out strategy on how to provide homes in the future for tenants and owner-occupiers would be disastrous.

The English disease?

Michael Ball, Professor of Urban and Property Economics at the University of Reading, has directed his gaze beyond these shores and found that we are not alone — in experiencing house price falls. Values declined everywhere in Europe last year, with Estonia — down 23 per cent — the hardest hit. Prices in Estonia were pushed up to unsustainable levels partly by foreigners buying in Tallinn, the photogenic capital (pictured above). The problem was compounded by a lack of supervision over the granting of loans and complacent regulators — a situation with which the British, too, are more than familiar.

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