Think about HIPs, says AMI

Senior figures from the mortgage industry met the Association of Mortgage Inter- mediaries last Wednesday to discuss how Home Information Packs will affect business and the housing market.

The meeting was arranged in light of the publication of draft government regulations on October 31 that set out the cost and contents of HIPs.

Ben Stafford, head of policy at AMI, says: “The industry has been so caught up with regulation that there’s been a tendency to lose sight of other important issues like HIPs.

“The government intends this to benefit consumers but there hasn’t been enough consideration within the industry of the implications to advisers and intermediaries. Firms must consider how HIPs will impact them.”

One concern raised at the meeting was that HIP providers could cut brokers out by offering customers a mortgage proposition.

Though Stafford says there’s no single answer, he adds that brokers must start thinking how they are going to position themselves, come the introduction of HIPs in early 2007.

Rob Clifford, managing director of mortgageforce, says many brokers are only just becoming aware of the risks to their businesses.

He adds: “HIP providers will have the chance to get hold of clients at the outset and offer them mortgage advice.”

The Office of the Deputy Prime Minister says increased competition means more choice for consumers. But industry experts are concerned about market domination by a few big corporations, and that the potential for small brokers to be driven out of business would leave consumers with less choice of mortgage advice and provision rather than more.

A spokesman for the ODPM says: “This is one of the most widely consulted reforms ever done by a government and there are various areas in the market that need to change.”