CML welcomes HIPs timetable but warns there is still work to be done

The Council of Mortgage Lenders (CML) has welcomed the timeline the Office of the Deputy Prime Minister (ODPM) today published for implementing home information packs (HIPs), but warned there is still a great deal of work to be done.

The CML regards this as essential to enable the ODPM and the industry to work together to an agreed timetable, and to monitor whether progress is on track.

It said there is still a lot of work to do to implement HIPs. For lenders, the CML believes the biggest question is on how to interact with the home condition report (HCR) that will be contained within the pack. The CML is pleased that the government is now indicating that it expects to give lenders free access to the databank of HCRs. But it said HCRs are not a substitute for lender valuations as they do not contain an assessment of value. It added lenders may be able to use automated valuation systems to establish value in some cases, but not all.

It admitted over time automated valuations are likely to become more common, but at the time HIPs go live there is still likely to be a sizeable proportion of properties on which lenders will wish to commission physical inspections for valuation purposes.

Peter Williams, CML deputy director-general of the CML, commented: "No-one should under-estimate the scale of the task ahead. It is quite clear that, even when HIPs go live, it will take some time for the market to gain experience and confidence in the new environment, and only then will its full benefits to consumers be realised."

LMS, a provider HIPs has also welcomed the timetable, but is concerned about the ability of some providers to meet it.

Dominic Toller, director of marketing and new business at LMS, said: “It is a challenging schedule and it will be very tough for some of the providers to meet. Fortunately we are in the position of having spent 15 years managing large volumes of transactions, and we have spent the last three years developing our technology and systems to provide a fast and efficient low cost HIP service to lenders, estate agencies and brokers.

"We believe we will have no difficulties in meeting this timeline with LMS having a capacity of between 350,000 and 400,000 packs a year at launch. However, two elements in particular will make it a problem for many of the 140 companies currently registered to supply HIPs. The first is the voluntary trial. This will be an expensive exercise as currently there is no government funding planned and most providers simply will not have the financial strength to carry it out.

"The second is that the introduction of HIPs will be in June which is the busiest time of the year for the residential property market and this will create high volume. Both of these factors will make it very tough for most providers."

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