This time next year the mortgage industry will be just getting to grips with Home Information Packs. Probably.
Buying a house is more than just a financial transaction – albeit the biggest that most of us will ever have to deal with – it is a personal and emotive subject. It’s no wonder then that politicians like to latch on to issues in the property market and use them as a platform to generate headlines.
But quite frankly it is not helpful and when I start hearing MPs debating the rights and wrongs of HIPs and the positive or negative impact they will have on the property market and housebuyers, the phrase “a little knowledge is a dangerous thing” comes to mind.
Let’s be honest HIPs are not perfect and I doubt that they will be a solution to all the problems the government thinks the scheme will address. In fact I and many others in the mortgage industry are concerned that HIPs will provide us and brokers with a number of difficulties that we will have to iron out.
There is a big unanswered question over valuations, because HIPs do not contain a valuation element, and it is also likely that some of the documents contained within a HIP will have to be renewed before completion. The impact of HIPs on property prices has not been properly assessed, and don’t even get me started on the role of unregulated estate agents in the HIP marketplace.
But the point is that lenders, brokers and packagers have already started to consider the impact that HIPs will have on the marketplace, on their businesses and on borrowers. Plans are being developed, different scenarios are being worked up and new products are being created so that whatever form the HIP scheme finally takes, we in the mortgage industry will be ready to react and make its introduction as smooth as possible and ensure that housebuyers get the support and advice they need.
A lot of people are spending time, effort and money preparing for a scheme that is being treated like a political football. To have politicians calling for the scrapping of HIPs even before they have been launched is frustrating for the industry and sends out confusing signals for consumers, who are after all supposed to be the main beneficiary of the initiative.
I would like to think that the government would not change its mind over such an important policy, but it’s U-turn on SIPPs shows that anything is possible, no matter how much grief it causes financial institutions and consumers.
So my plea to all politicians is let’s leave HIPs alone for the time being and concentrate on getting it up and running in 12 months time – then we will be in a position to review it and make it work better, preferably as part of a major review of the UK property market.