With just one year to go until the mandatory start of the government’s Home Information Pack (HIP) initiative, crunch time is approaching. I am anticipating a huge amount of movement and noise in the industry, with many firms looking to develop and finalise their HIP strategies and plans over the coming months. There will already be a number of businesses that have everything in place, but from the conversations I have been having among figures in the industry, a majority have waited until the mandatory start date is within reach before forming any clear strategies.
I believe mortgage intermediaries are in an ideal position to take advantage of the commercial opportunities surrounding HIPs. There are two real areas that stand out in my mind: either becoming a full HIP provider, or creating local regional partnerships with other links of the property chain to offer a ‘one stop shop’ service to consumers within the local area.
HIP providers
As a mortgage intermediary, you are in an ideal position to become a HIP provider. A majority of consumers, when looking to move house, will often call upon a mortgage adviser or financial adviser first to determine what funds are available for their prospective property purchase. When an appointment is made, it is then an ideal opportunity to discuss the collation of a HIP for their existing property, and to discuss what a HIP means to them. The key benefit to consumers is that you offer an impartial pack, which is not linked to a specific estate agent, allowing them to switch agents without having to renew the HIP each time.
There are a number of advantages of becoming your own HIP provider. Not only will you have the freedom to collate the packs in your company style/brand, but you will also be in direct control of accessing the contents, and deciding what ‘value added material’ can be included in each pack. For example, there is no reason why you can’t add a provisional mortgage offer, or even access an automated valuation of the property and include that alongside the Home Condition Report (HCR).
Becoming a HIP provider is a very straightforward exercise, with many companies on the market offering ways to access the legally required contents of the pack. At Quest for example, we provide an online system that allows any business to become a HIP provider. It’s easy-to-use, is not expensive and allows a HIP to be developed at the touch of a button. The HIP request is then logged via the online system, which automatically accesses all the key contents of the pack electronically, as well as initiating a Home Condition Report (HCR) request with a selected home inspector. The pack is then delivered as a collated, company branded HIP, which is ready to be emailed or printed. Simple.
HIP partnerships
However, if you decide that the HIP provider route is not for you, the other viable option as I see it is to provide value added services to HIP providers, or to partner with other property disciplines to offer a local ‘one-stop-HIP-shop’ to consumers. These HIP partnerships will consist of representatives from your local area from the legal, estate agency, surveyor/home inspector, lender and broker sectors. By collaborating together, these pockets of regional expertise will have all the necessary local knowledge required to provide the home-buying and selling public with a one-stop solution with regards to the sale of their property.
The home buying and selling public have an affinity with local independent operators; the personal customer service and knowledge of the local area is an excellent unique service provision, which should be marketed in order to attract future property vendors who are considering a sale.
Through establishing local partnerships, all firms will be able to feed business around the selected group members, in order to provide vendors with a fully comprehensive HIP offering, with the added benefit of the local knowledge. As a result, they will be in an excellent position to maximise the commercial opportunities surrounding HIPs, and will be well placed to compete in what will be an extremely busy marketplace.
How will it work?
The secret ingredient to make such partnerships work is technology. Online systems and secure electronic links will seamlessly connect each member of the partnership. The systems are able to electronically access each party at key stages of the HIP development; so, for example, an automatic HCR request will be sent to the home inspector for actioning, an alert will be sent to the broker in order for them to contact the client to discuss their financial service requirements, and an e-mail will be sent to the solicitor to oversee the automatic system collection of search and legal data for the client’s HIP.
Technology will make regional partnerships a realistic option. With each member interacting electronically, it will remove much of the anticipated paper-based communication that has traditionally slowed down the home buying process, and will ultimately ensure the HIP can be created as quickly as possible. This will provide consumers with an efficient ‘one-stop’ service that allows them to market their property without delay.
Mortgage brokers are in an excellent position to take advantage of these partnerships. You will be able to offer targeted financial advice to vendors that are in the early stages of bringing their property to the market, and who may not have consulted a professional for mortgage advice.
I believe this is an area that should be considered further by all parties in the property transaction chain. The technology to make regional partnerships work is already available and, by establishing the relationships now, each party will be fully prepared for the onset of HIPs before the June 2007 start date.
Evaluating next steps
So, whether you decide to become a HIP provider, or develop regional partnerships, I believe HIPs present a great commercial opportunity. Yes, it is a huge change in the current way of working, but with change comes a host of prospects for the more enterprising financial services firms. I look forward to seeing how the property industry adapts, and prospers, in the new HIP environment.
