Cummings outlines HIP concerns

In an exclusive interview with Mortgage Introducer, set for publication next week, Chris Cummings, director-general of the Association of Mortgage Intermediaries, said the move, if implemented, could have dire consequences for intermediaries and damage the client as it would limit the potential for shopping around and see them end up with the wrong product.

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Cummings said: “It’s very damaging from a consumer point of view because it’s restricting choice and presenting a false solution. Most borrowers don’t want the mortgage, they want the home, and if you give them the easiest solution – which is ‘here is a pre-approved mortgage, have this one’, it will curtail shopping around. This could lead to people getting terrible advice and setting off on the wrong foot in their mortgage lifetime.”

The system would be akin to the one in place in Sweden, where a mortgage offer comes as part of the pack, subject to the status of the borrower.

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Cummings believed the move could end up removing the broker from the process entirely and bring about a ‘fundamental structural change to the market’.

However, Mike Ockenden, director-general of the Association of Home Information Pack Providers, said he had not heard of such moves.

“I’ve not heard this but, in principle, I would like to see them get an offer with the Home Condition Report using an automated valuation model. Using the HIP to get an offer in the broker’s hands at the point of sale could then be advantageous as it cuts down on time taken to get finance.”

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