The government has decided to launch HIPs because it believes they will make the house buying process quicker, easier and less frustrating for home owners, particularly first-time buyers. The government says 350m is wasted each year on property sales that are agreed but then collapse. It thinks HIPS will help put an end to gazumping and reduce ownership costs for first-time buyers.A government study has estimated that failed property sales cost about 900, of which 200 is incurred by the seller. The buyer’s wasted 700 is accounted for by conveyancing fees, survey and valuation costs (these costs do not factor in valuable time wasted by mortgage brokers and estate agents). In many instances, the reason for the sale aborting is because of problems with the property itself. It is thought that if information is made available about the property before an offer is made, many collapsed sales will be avoided. The Office of the Deputy Prime Minister recently announced that the date for the compulsory implementation of HIPs will be June 1 2007. The Council of Mortgage Lenders had lobbied to push this date back to later in the year, not only to give more time for necessary preparations to take place, but also to avoid unnecessary disruption during the busy spring/summer property sales period. Unfortunately, the CML’s pleas fell on deaf ears. A pilot dry run will take place during the summer of 2006 to help iron out last-minute issues before 2007’s full launch. The cost of producing a HIP is estimated to be between 500 and 1,200, although the government estimate is 635. In theory, the seller will have to pay for the pack upfront, but it is believed schemes will be introduced that defer payment until the property has been sold. It is also thought that lenders, estate agents and others will introduce subsidised schemes. These will be a bit like free valuations, in which the cost to the seller is vastly reduced, even eliminated altogether if they also buy a package of other services from the HIP’s provider. Herein lies the source of a potential threat for mortgage brokers. After June 2007, estate agents will have a real incentive to sell an integrated package, which includes not only a house selling service and a HIP, but also financial services such as mortgages and associated insurances. The challenge for brokers is to find ways to work with local estate agents to provide this integrated package together, rather than let them undermine their business. So we know what HIPs are. In the new year, I’ll look at some of the key issues they raise for intermediaries.
- Top trends
- Top trends
Research by Alliance & Leicester for Mortgage Strategy shows that 64% of brokers feel confident using packagers.
The Regulatory Association of Mortgage Packagers has revealed a 51% increase in completed business in November over the same period last year. Over the full year RAMP is now 27% up on 2004.John Rice, managing director of RAMP, says: It is great to be able to go into the Christmas period with a record increase […]
The start of the year saw dismal volumes in the mortgage and insurance markets as they felt the heat of regulation but they soon perked up and saw business grow, says Richard Griffiths
John Mawdsley, director of The Mortgage Partnership, Ian Nelson, chairman of BDS and Andy Linnett, director of LMS Specialist Mortgage Services, have revealed the Professional Mortgage Packagers Alliance is reforming. Following detailed discussions with all concerned parties it has been agreed that the PMPA will be reconstituted with several changes to its constitution. Members now […]
Jamie Clark – Business Development Manager The recent report from the Pensions Policy Institute demonstrates the sheer scale of auto-enrolment so far and what we can expect in the future. We’ve pulled out the key information to save you reading the full report. Auto enrolment in numbers Sources: Pensions Policy Institute, The Future Book: Unravelling […]
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