But let’s get back to the real world in which HIPs are not free. The cost of HIPs will vary between providers and will be determined by the type of packages clients want. My best guess is that the average cost of a HIP will be in the region of £350, assuming that the optional Home Condition Report is not taken up.
Clearly, home owners would prefer this cost not to be imposed on them, especially when they are moving house and finances are under strain. But brokers can help customers offset the cost. For example, most people pay about £300 more than they need to for conveyancing services. This is the amount that brokers are able to save their clients by shopping around.
By shopping around for conveyancing services, a broker can also effectively save clients the cost of a HIP. What’s more, brokers are paid a commission for this. To misquote Mark Knopfler: “Money for nothing, your HIPs for free.”
The important point here is that in future brokers must take a more holistic view of their clients’ housing transactions. The name of the game is no longer simply broking mortgage deals. A mortgage may be the reason for a client seeking advice from a broker but that mortgage may not constitute most of the broker’s income from the transaction.
Income from insurances, conveyancing, HIPs and the provision of other services may be worth more than the commission derived from mortgages. So brokers need to start thinking about how they can increase their income per housing transaction.
This is going to be particularly important as we progress through a year in which the housing market is expected to grow at a more subdued rate of between 5% and 7%. Brokers are not going to see significant increases in their income simply as a result of organic growth in the property market.
As a parting shot, I was recently accused by none other than Joe Rabbitt, head of intermediary development at Nationwide, of being boring. I’ve been accused of many things in my time but never that. In fairness, he was accusing HIPs (which he sees as being inseparable from me) of being boring and was looking for some interesting news.
Well, by the time this column is published we may have heard about amendments to HIP regulations. As soon as they are published I will be on the case to give you a detailed analysis of what they involve. And I promise I’ll try not to be boring.