Quest's managing director, Tom Parker, has been watching HIPs like a hawk to see if they have managed to assimilate themselves into the housing market without fuss.
"During the last four weeks, there has been a lot of news focused on HIPs and what affect they may be having on a housing market, which is already facing consumer confidence issues due to tighter mortgage lending terms and the ongoing ‘credit crunch’ and ‘market instability’ headlines.
One story that has dominated the papers was the pledge from the Conservatives that they would scrap HIPs, should they come into power, with the shadow home minister Grant Shapps claiming HIPs are “clumsy, ineffective and useless”. This of course created plenty of reaction from the industry, with many stating how it would be unacceptable at this stage to scrap HIPs when you consider the number of individuals and organisations working to make the initiative a success.
As it happens, a General Election has now been ruled out and so any dramatic changes to the current system are unlikely to take place any time soon. However, if the leadership were to change in the coming months, our view would be for Government to work in consultation with the industry to ensure HIPs work, perhaps adapting the initiative as they see appropriate but not scrapping the concept altogether. Ultimately, the aim of HIPs has always been to speed-up the transaction process, so surely it is important that we all continue to work together to make this the case?
HIPs for all homes
More recently Rightmove has announced the latest figures from its website suggesting a surge in the number of three-bedded homes being marketed before the introduction of HIPs on 10 September. It states that there was a 65% increase properties being marketed before this deadline, which in turn created a temporary uplift on the average asking price for homes by £6,000 (2.7%) from £235,642 to £241,642.
An increase in three-beds being bought to market before the deadline was always anticipated; this was the case when HIPs initially started with four-beds on 1 August, So the latest figures demonstrating an increase with three-beds serves as no major surprise.
However, the data published by Rightmove also suggests that listings for four-bedroom homes are already returning to more usual levels; we suspect this is likely to be the case for three bedroom homes over the coming weeks, therefore demonstrating that the effect HIPs have on the market may simply be a short-lived knee-jerk reaction, which will calm over time, and are certainly not the overriding reason for the current market slowdown.
Interestingly, the date for the full HIPs roll-out is still yet to be announced by Government.
At this month’s PCS Expo show in Islington, the Parliamentary Under Secretary of State, Iain Wright, gave a keynote speech to over 200 property professionals including estate agents, HIP providers and DEAs on HIPs and was unable to pinpoint a date of when the full roll-out will commence. The reason for this is that Government is keen not to “unsettle the current balance of the property market” and potentially create further “uncertainty”, even though it was earlier agreed that HIPs are rolling out “as smoothly as expected”.
It was clear to everyone listening that it would be wise for Government to push the initiative out across all homes with immediate effect. Not only does this ensure everyone who is marketing a property is in the same boat, and therefore has to go through the same processes when selling, but it also provides additional work to Domestic Energy Assessors who would benefit from the full commencement to supplement their working schedules.
We actively encourage professionals to contact the CLG to find out when the phased roll-out will be concluded. More answers are certainly required. Iain Wright kindly provided an email address during the speech welcoming industry feedback; [email protected].
New avenues for brokers
In an uncertain climate, mortgage brokers should be exploring new revenue generation routes that could help boost their income stream. There are a wide range of value-added services that intermediaries could start looking at offering clients, from insurances and loans through to conveyancing services and of course Home Information Pack development.
With HIPs in particular, brokers are in an ideal position to manage the HIP generation process for all clients who are about to market their property. Not only will brokers be offering an ‘independent’ HIP so clients won’t necessarily feel tied to any one estate agent, but it creates a closer link with the customer, who will become to rely on their intermediary for a wide range of professional services linked to their property assets and financial planning.
There are tools on the market today that enable intermediaries to quickly establish a HIP-providing arm, without any set-up costs, monthly retainer fees or have the expense of software ownership. By working with the right technologies, brokers can deliver own-branded HIPs to clients with minimal costs, either as an electronic PDF document or in printed-form and generate additional income.
At the end of the day, delivering additional professional services to clients doesn’t have to be a time-consuming process or cost ‘an arm and a leg’. By offering clients a range of professional services, brokers not only have the potential to create new revenues but at the same time, deliver services under one roof that will help towards building greater customer loyalty."
