A HIP provider is ceasing trading, sparking concerns that other HIP providers will follow suit as the General Election gets closer.
Promise HomePacks was favourably highlighted in last month’s Which? research, which named it the third cheapest direct HIP supplier, with a HIP costing £179.
But this week the company – a member of AHIPP and a subscriber to the HIP code – said that the political environment made it “far from clear whether HIPs will play a long-term role in the housing market”.
The Wolverhampton-based company also said it had experienced third party service and commercial difficulties, and had been working on thinner margins.
The company’s parent organisation, Promise Solutions, last year closed its mortgage broker arm, Promise Finance, with the loss of 70 jobs when it entered administration.
Group managing director Steve Walker insisted to EAT yesterday that Promise HomePacks had not gone into administration, although he admitted that the directors were taking advice. He said that although closed to new business, it would still try to fulfil as many pipeline orders as possible.
Mike Ockenden, director general of AHIPP, said: “We understand from Promise Solutions that they are working to minimise any impact on consumers and creditors.
“AHIPP will work, through its members, to try and ensure that there are no consumers left without a HIP or out of pocket as a result of Promise Homepacks going out of business.”
The Tories have repeatedly said they will ditch HIPs if they win the next election.
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Comments
Trevor - your speech for Mr Brown was not supposed to be leaked to the media!! On a serious note - not like me, I know - I do find the idea that any reasonable person can take pleasure from anybody losing their livelyhood quite disturbing. Okay - HIPs suppliers fall into the 'Traffic Warden' popularity section as far as Estate Agents are concerned, but they just took advantage of an opening in the market - like all of us. If HIPs go, as we anticipate, another part-thought-out scheme will follow; then another... Surely it is better to work with what is there, TOGETHER, and make something work that all are reasonably happy with. After all, we should only be concerned with making the housebuying and selling process easier and less liable to abuse - isn't that right?
Do not rule out the possibility of an announcement at the Labour Party Conference that "Whilst HIPs have been a demonstrable success in supporting homebuyers, particularly
first timers by better advising them up-front about the property they wish to buy, we are using our reserved powers to remove the requirement for a HIP to be produced before marketing can begin, with immediate effect", the announcement may then continue " following the election we will consider whether HIPs have fulfilled their objectives and can be phased out and replaced with a wider-ranging EPC report". Just you wait and see folks. Big T
Colin, you may be wrong "AHIPP will work, through its members, to try and ensure that there are no consumers left without a HIP or out of pocket as a result of Promise Homepacks going out of business.” A local supplier won't have that kind of support should they struggle to deliver and survive.
Successful companies don't cut profit to the barest minimum, there is only one way to go if business drops off, DOWN THE PLUG HOLE and good riddence and I hope alot more go soon. Too many would be cost cutting providers jumped on the band wagon and wrecked the HIP industry. All to often these days inexpereinced business's seem to think they can buy the customer, WRONG. With HIP's being abandoned next year, anyone in their right mind should be looking for a new job now, if you can find one.
this may be the first to go and wont be the last.
Uncle bertie say's use an AHIPP member and HIP code member, didn't do promise much good or other high profile casualties, use a Local supplier who you can build a working relationship with!
Get real, REAL and say something constructive! I work with a number of conveyancers and more and more are saying they don't want Hips to go completely as they provide some useful upfront info.
GOOD!
That's one parasite biting the dust - let's watch for the next one.
And replace with what Ray?
Lets stop all this nonsense and just get rid of the useless HIP's altogether.
Also, stop giving so much airtime to the vested interests of Mike Ockenden
It is highly likely that more Hip providers will follow suit. Make sure your provider has finacial stabilty,full insurance and, dare I say it is a member of AHIPP and signed up to the Hip Code. Don't let the seller pay for a Hip that may not materialise!
This is no surprise - Promise tried to work for peanuts and the numbers just didn't add up. Last year they got desperate and offered no-sale-no-fee HIPs and it looks like the idea has come back and bit them on the bum. Low cost HIPs are a real gamble because the margins are so tight that the companies offering them have to have huge numbers to sustain them. This is just the tip of the iceberg. More low-cost HIP providers are likely to disappear as the market slows going into the winter.