However this week has proved to be anything but the case, with the dramatic announcement by housing and planning Minister Yvette Cooper confirming Home Condition Reports (HCR) will no longer be a mandatory obligation of Home Information Packs (HIPs). With the HIPs launch date fast approaching, the decision by the government to alter the HIPs blueprint has been welcomed and derided in equal measures across the market. Although this decision allows for greater time and energy to be spent getting the basic logistics of the pack sorted out, the decision to remove HIPs, according to some, takes away the essential element. As Eddie Goldsmith argues, “The crux of HIPs was the HCR, so if they are voluntary, why would anyone produce them?”
One certainty to come from the announcement was the launch date, with no budge from the June 2007 deadline. However following the reversal of the need for a HCR, implications of the decision will be felt across the market. People currently considering training to be a home inspector, a sector that reports suggest is already drastically under staffed, will have to re-evaluate their decision, to decide if it is a worthwhile option, while the costs of HIPs will also need to be placed under review. With the original estimates of £600-£800 for a HIP now seemingly out of the window, HIPs providers will have to re-assess the true cost, downwards.
HIPs have been on the mortgage market agenda since the announcement by the government that they were to become part of the house buying and selling process, but with the u-turn, many feel HIPs could be the new Self Invested Personal Pensions (SIPPS) fiasco, but with greater market consequences, good or bad.
It has also been a busy week for the Financial Services Authority (FSA), with the announcement that it is to step up its attempts to increase Treating Customers Fairly (TCF) within the market. Its findings concluded TCF had not yet reached the front-line of firms, with the regulator setting a March 2007 deadline for improved competence and understanding of the TCF principle for firms that had so far failed to enforce TCF into their business.
Similarly its review into the lifetime mortgage market revealed failings of documentation, with advisers failing to issue initial disclosure documentation in a third of cases. Concern was also raised that intermediaries were failing to explore and demonstrate the impact a lifetime mortgage would have on the borrower.
In both cases the FSA has confirmed it will be following up its report with further visits to the firms concerned and further reviews of the market sectors.
