View more on these topics

Mortgage View: Fractured Hip?

Charles Clarke took the blame for the Government’s defeat on the Terror Bill last week but it is clear that the decision not to compromise on the 90-day period of detention without charge for terror suspects was the Prime Minister’s.

There are several other highly contentious bills scheduled for this session of Parliament, including the reform of incapacity benefits and pensions, introduction of ID cards, opening up the NHS to private providers and, perhaps most contentious in the eyes of Labour MPs, freeing schools from local education authority control.

Tony Blair has made it clear he has no intention of backing down on his proposals on these issues in the face of the expected strong opposition from backbenchers. But former Deputy Chief Whip George Mudie told Radio 4 on Sunday: “I can tell you, just from speaking to colleagues, the number of people who said: ‘I am going with them on terrorism but he has no chance on education’ scares me, because it will mean disaster.”

By now, you are probably wondering what all this has to do with mortgages. Usually reliable sources tell me that Gordon Brown, who will almost certainly be Tony Blair’s successor, is very lukewarm on home information packs. The Tories said prior to the election that if they won, they would abandon Hips. Therefore, if Blair’s resignation comes sooner than expected, there is a chance that we may be spared from Hips, as Parliament still has to resolve a few outstanding issues before they become law.

Hips will fundamentally change the housebuying process but their impact on lenders, brokers and estate agents still needs to be assessed. A key consideration will be who pays. Many lenders are likely to offer a free Hip to existing customers on condition that they stay with the lender for their next mortgage, thus requiring borrowers to commit to their next lender possibly many months before they move. The FSA will no doubt want to ensure that marketing material promoting this trade-off is clear, fair and not misleading, and that borrowers realise they may not be getting a free lunch.

Promoting Hips a few weeks ago, Housing Minister Yvette Cooper said: “Buying a home is stressful enough without losing hundreds of pounds on legal fees or valuations for properties that fall through.” She could just as easily have said: “Selling a home is stressful enough without losing hundreds of pounds on a Hip if the property doesn’t sell.”

Recommended

New life after ru64

Scottish Equitable head of business development Steven Cameron believes that the eventual demise of the regulator’s RU64 edict should finally bring a welcome boost for retirement advice and for savings

No more Mr Nice Guy

After a decade of non-inflationary, consistently expansionary economic growth, the future is more uncertain

L&G first to shut down product lines ahead of A-Day

Insurers are closing down pension product lines as A-Day looms, with Legal & General leading the way in the early part of next year. L&G will close its executive personal pension and free- standing AVC contracts from February 28 to focus on post-A-Day lines in the run-up to April 2006. It has been known for […]

Brokers urged to pick up on packs

Brokers should start making plans for the arrival of home information packs and should not see them as a threat to their business,says United Group. United, owner of eConveyancer and United Surveyors is encouraging mortgage brokers to embrace Hips prior to full launch in 2007. Sales director Alan Dring believes that brokers must ensure they […]

Guide cover resized

Guide: Johnson Fleming’s managed auto-enrolment service for SMEs

Johnson Fleming has launched its new managed auto-enrolment service, designed to support SME businesses of up to 250 employees. The managed auto-enrolment service is not just about providing businesses with a software system for them to manage themselves, but more about outsourcing the administration of the project and scheme to Johnson Fleming’s auto-enrolment staff.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com