Next month crucial for HIPs
Both the pro-HIP and anti-HIP lobby hold strong views. CML's members' opinions vary, but lenders collectively recognise that what the government hopes to achieve through a combination of HIPs and e-conveyancing is a set of reforms to speed up transactions and reduce wasted costs, for the benefit of consumers. The CML welcomes this overall aim, but believes it is important to ensure implementation achieves it in practice.
The government has made it clear that it believes the implementation timetable is on course. The detail that will emerge over the next month, in terms of regulations covering the contents of the packs, business and technical standards (including complaints and redress), and information about the government's forthcoming baseline research to examine the current market, should make it easier for the professionals involved in the housing market to assess whether they agree.
At present, the CML sees the timeline as possible but challenging. Much will depend on the extent to which amendments and refinements emerge throughout the implementation phase.
Two aspects to which the CML urges the government to pay particularly close attention are ensuring that the market impact assessment now being undertaken is robust and is taken account of and ensuring that there are clear, unambiguous and widely supported success criteria for assessing each of the three separate phases of the “dry run”. These are both useful tests to help provide, in a politically sensitive environment, some objective assessment of the relative costs and benefits of HIPs and their implementation.
Commenting on the brink of the “year to go” point, CML director general Michael Coogan said: “The government is determined that HIPs will become compulsory in a year's time. This timescale may be achievable, although it is very challenging. Over the next month the government is due to publish a detailed range of implementation information. Reactions to this will help to determine whether any delays are likely to emerge.
“Over the next month we also expect to get findings from our own research on lenders' valuation practices and the influence that HIPs, in particular home condition reports, may exert. Taken together with the impact assessment that the government has now announced it is undertaking, this will help us to form a clearer view about how HIPs will influence the market. We only expect the full effect of HIPs on the mortgage lending market to become apparent over time, rather than on day one of implementation.”