This time next year the mortgage industry will be getting to grips with Home Information Packs. Buying a house is more than just a financial transaction. It is a personal and emotional subject too so it’s no wonder that politicians like to latch on to issues in the property market and use to generate headlines for themselves.But this is not helpful and when I hear MPs debating the rights and wrongs of HIPs and the impact they will have on the property market and home buyers, the phrase ‘a little knowledge is a dangerous thing’ springs to mind. HIPs are not perfect and I doubt they will be a solution to the problems the government thinks the scheme will address. In fact, I and many others in the mortgage industry are concerned that the packs will result in a number of difficulties that we will be left to iron out. For example, 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 in the packs will have to be renewed before housing transactions complete. The effect 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 effect HIPs will have on the market, on their businesses and on borrowers. Plans are being developed, scenarios are being worked up and products are being created so that whatever form the initiative finally takes, we in the mortgage industry will be ready to react and make the packs’ introduction as smooth as possible and ensure that buyers get the support and advice they need. A lot of people are spending a lot of 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 to consumers, who are supposed to be the beneficiaries of the initiative. I would like to think the government will not change its mind over such an important policy, but its U-turn on self-invested personal pensions shows that anything is possible, no matter how much grief it causes financial institutions and consumers. So my plea to all politicians is to leave HIPs alone and concentrate on getting the initiative 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 property market.
To cut its burden the FSA is still considering making lenders reponsible for brokers’ regulated activities but this could result in serious consumer detriment, says Bill Warren
Abbey has appointed Rosemary Thorne as a non-executive director with effect from July 1 2006. Thorne is currently chief financial officer of Ladbrokes and was formerly group finance director of Bradford & Bingley, J Sainsbury, and group financial controller of Grand Metropolitan.She is currently a non-executive director of Cadbury Schweppes and a member of the […]
Mother Theresa’s youthful ambition was to be a mortgage broker. She planned to devote her life to finding the right home loan deals for struggling clients, helping them sort out their other financial commitments along the way.
Packagers have emerged from regulation stronger than before and can continue to add value in the mortgage chain, says David Copland
This year looks set to bring a new danger for pension savers and their employers.
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