Brokers admit to HIPs loopholes
With HIPS set to go live in June 2007, concern has risen that property owners and intermediaries are looking at ways of exploiting or finding loopholes in the current proposition.
An increase in properties going to auction has been mooted, as has the possibility of an increase in properties classed as commercial properties, which become exempt from HIPs.
Jock Cassidy, managing director at Ashley Law, said HIPs were going to be part of the market and brokers should prepare as such, but admitted there were loopholes. He said: “I would have thought HIPs would still apply to properties bought at auction. However this may be different if it was classed as buy-to-let.”
Mike Lloyd, head of sales at Mortgage Bureau UK, added: “People should look at the positives of what HIPs can do rather than focusing their attention on finding ways round them. When the Financial Services Authority (FSA) was first introduced, people were looking at ways round it and the same is happening with HIPs. People should work with them rather than against them to see what they can do to improve their business. HIPs are going to be part of the market and people can’t afford to ignore the impact.”
Alan Dring, sales director at eConveyancer, added his belief that the loopholes currently embedded within the HIPs proposition would be ironed out in time for the June 2007 launch. He said: “There is a possibility that people will look at ways round HIPs, but I don’t think it will have too much of an impact and won’t be widespread. I think the loopholes that currently exist will be gone by this time next year.”