It’s now been just over one month since the official introduction of Home Information Packs, which came into force for all four bedroom properties being newly marketed for sale. As from 10 September, the legislation is extended and will also apply to three bedroom homes coming on to the market, which, according to Hometrack, covers approximately 70% of the total housing stock in England and Wales.
The industry has had mixed views concerning HIPs since the legislation was first discussed and from what we can see, many mortgage intermediaries have taken a step back and have been keeping a watchful eye on the progress of HIPs; assessing who has moved into the market to provide HIPs, gauging customers’ viewpoints on the initiative and generally monitoring the impact HIPs are having on the property market.
Generally, feedback has been positive. HIP Providers have been quick to deliver the required packs since the 1 August start date and people are starting to accept the new process involved in marketing a property.
As a result, we believe now is a good time to take full advantage of the commercial opportunities surrounding HIPs by providing an additional value- added HIP service to your clients. For those that are yet to act and incorporate HIPs into their businesses, we believe the time is right to consider the options, to not only generate additional revenue but to help ensure you stay one step ahead of estate agents looking to offer your customers advice not only on HIPs but to try and tempt them with their own in-house mortgage advisory services.
As independent brokers, you are in an ideal position to handhold your customers through the HIP creation process, as often consumers will contact their mortgage adviser first before embarking on the sales process. This is an ideal time to provide them with valuable information on developing a HIP for their home, whilst also researching into their mortgage product options.
So, what options are available to mortgage brokers?
We feel there are two obvious areas to explore. The first is to create local partnerships with HIP providers and other property professionals to offer a local ‘one stop shop’ service, or alternatively there’s no reason why you can’t become a full HIP provider yourselves and deliver completed packs to your clients.
Let’s consider the first option: by creating local partnerships with HIP Providers, Conveyancers and Home Inspectors /Domestic Energy Assessors, we believe the grouping of regional expertise will be an appealing package to consumers. By working directly with you, their trusted mortgage intermediary, they can organise their financial affairs whilst at the same time initiate a HIP for their existing property, and organise an appointment for an available Assessor to visit their home for the Energy Assessment.
This ‘one stop shop’ service will be appreciated by many home owners looking to market their property without delay, who do not necessarily have the time or desire to manage each part of the process manually. The single point of contact will certainly be a plus point to many.
The second option is to become a direct HIP provider. There are a number of advantages to offering HIPs directly; not only can each pack can be collated in your own company style or branding, but you will also be in direct control of accessing the contents and deciding what ‘value added materials’ you would like included in your customer’s packs.
For example, there is no reason why you can’t create a ‘gold’ level pack that will command a higher fee, which includes a provisional mortgage offer, an automated valuation of the property or a Home Condition Report (HCR).
Many online tools are available, which enable you to automate the entire process. You don’t have to be a large business to be able to afford to offer HIPs – with the right online systems in place to access the contents and link to accredited Home Inspectors or Domestic Energy Assessors, it becomes a simple automated process that is quick, offers transparency and doesn’t mean you are distracted from your core business of delivering mortgage advice and products.
Be sure to speak with a number of online HIP technology suppliers and ask for customer testimonials, demonstrations of the tools in action and details regarding the accreditation schemes the systems link with. It pays to speak to a number of providers who can deliver uncomplicated products without cumbersome contracts.
At Quest, we are keen to dispel the myth that collating a HIP is a costly and lengthy process. We are working with many small, independent operators who have recognised the commercial opportunities surrounding HIPs. By either working closely with an established HIP provider through a partnership or by accessing the contents using intelligent online tools, we believe the more enterprising advisers can only prosper in the new HIP environment.
