A bad week for the HIP industry

Borrowers got a reprieve last week with the Bank of England\'s decision not raise interest rates in June. The Monetary Policy Committee froze the base rate at 5.5% - and a good job too for many people.

Sesame last week revealed that 16% of borrowers are already struggling to meet their mortgage payments, with a worrying 20% not knowing how many base rate rises they’d be able to absorb before they go under financially.

But there was no reprieve for energy-assessors. com and staff at Hipstar. On Friday, energy-assessors.com revealed it was pulling the plug, saying its main backers, Connells Group and LSL Property Services, had decided that “no further investment in this company is considered appropriate at this uncertain time”.

And at Hipstar, the Home Information Pack arm of Network Data, it was revealed that staff numbers would be cut by 40%, with chief executive Stephen Maskens also exiting the firm.

In the wake of the government’s U-turn, it seems that many HIP firms are struggling to survive and no doubt more will fold in the coming weeks.

But the HIP industry seems to be taking its mind off its daily battle to survive financially by attempting to win the public relations war.

For the past two weeks, Mortgage StrategyOnline has been asking in a straw poll whether HIPs should be scrapped. We have discovered that this poll was hijacked by a pro-HIP forum which urged its members to vote to ensure the result would be a resounding no. Alas, despite the forum’s best efforts, with some 6,000 people voting, the result was in favour of scrapping the packs.

While it’s good to see that readers are keen to influence our poll and have their say, the success or failure of HIPs can only be influenced by the government. And fingers crossed, communities secretary Ruth Kelly won’t be influenced by the results of a mere online poll.