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HIPs, IDDs and housing confusion

The first six months of the year have been a hive of activity in the mortgage market, with confusion over HIPs and IDDs making life difficult for us professionals, says Sue Read

It’s been a week of tidying up. Sometimes it’s like that, mopping up small tasks in readiness for the next batch of major ones. This week’s column is a bit like that too.

Comment on Home Information Packs has rumbled on. This is one of the biggest stories of the year, which it should have been but only in a positive way. I’m sick to death of hearing the word fiasco. No-one is going to come out of this smelling of roses.

Whatever happens from now on, the way HIPs have been handled has been a shambles. For goodness sake Whitehall, make a decision and stick with it.

Changes of mind such as those that have derailed HIPs are commonplace in the crazy world of financial services. Recently we heard that the Initial Disclosure Document is under threat. About time too.

While the reasoning underpinning the paperwork was worthy, the document we ended up with is confusing. IDDs hinder sales calls, as they always require lengthy explanations. I’ve yet to meet clients who instantly understood them and why they had been given them.

So RIP, IDD, let’s hope someone comes up with something more user-friendly soon.

Confusion also reigned last week over house prices. The Daily Express and the Daily Mail took opposing positions on the same data. Much airtime has been spent on TV and radio talking up an imminent crash. If we’re not careful this will become a self-fulfilling prophecy. I sometimes wonder if fin-ancial journalists secretly want a crash to make their working lives more interesting.

At long last I heard someone say last week that the fact lenders’ fees had increased so much meant interest rates had been kept artificially low, softening the impact of increases in the base rate.

When are lenders going to get rid of these ridiculous charges, which camouflage the true market picture?

Finally, I have been contacted by the charming John Light, a first-rate equity release specialist. He rightly pulled me up for agreeing with Martin Lewis that equity re-lease has the potential to become the next mis-selling scandal.

I’m not changing my mind about this, but to clarify I think we need to differentiate here between products and advisers.

I have no problem with the products. They are safe for consumers and offer them protection. But the potential for mis-selling can still come from a small number of advisers who are not handling this product area carefully enough. The few can mess it up for the many. But I can vouch for the fact that Light is one of the good guys.


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