While the removal of a mandatory Home Condition Report (HCR) has seen players, such as Rightmove abandon its information pack propositions, most have reaffirmed their commitment to the market.
However, Spring Move believes the market is set for massive consolidation as firms realise their models are unsustainable.
Stephen Foden, chief executive at Spring Move, said: “We expect to see a number of companies pull out of the HIP market, and those that remain will need to have a very strong proposition in order to be successful. Some providers have rushed into this market with weak propositions, wrongly believing it to be a licence to print money.”
Another factor highlighted by Spring Move was the rise in interest rates, which it said could stunt the number of houses being put onto the market and therefore reduce the levels of business HIP providers could expect.
Dominic Toller, director of marketing and new business at LMS, said: “While I don’t think interest rates will be much of a factor, I agree whole-heartedly there will be consolidation and I think half is being conservative. Around 140 providers signed up to produce HIPs but I think you are going to have four or five major players and then a handful of others.
“The market is not suitable for smaller players. It’s all about having the size to invest in technology to provide HIPs cheaply, efficiently and quickly.”
Alan Dring, sales director at eConveyancer, agreed: “I’m not surprised and I would have thought the figure will be a bit higher. We always thought consolidation was going to happen even without the changes to HIPs and I think there will be no more than a dozen providers. Consolidation will happen but not so much as a consequence of interest rates and HCR changes.”
