If HIPs are scrapped, estate agents could be left with a £75m hole in their collective income, an industry expert has warned.
Michael Day said: “I have one single-office agency client who is currently generating around £30,000 per annum from the production of HIPs and another who is getting their floor plans and photography done within the HIP price paid by their clients. This could suddenly become a cost burden if HIPs are to go.”
The commitment to scrap HIPs has been included in the manifestos of both the Tory Party and the Liberal Democrats, suggesting that even if there is a hung Parliament, HIPs are likely to disappear.
Day said: “HIPs have received a lot of bad press from within the estate agency world, and the badly implemented and watered down product currently in place offers little benefit to buyer and seller.
“It is, however, generating around £75m per annum of additional income for estate agents through referral fees, panel management fees, cost offsetting and crucially, during the darkest recessionary days, improved cashflow.”
Day, who heads Integra Property Services, said: “I am no lover of HIPs in their present form, but I would strongly advise agents to think about and plan for the possible scenario of a world without HIPs and to consider what other options they have to generate revenues and cashflow.”
www.integra-ps.com
£75m black hole for agents if HIPs are scrapped
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Comments
It's clear from the comments on this thread and others that most agents are making a reasonably significant amount of money from HIPs.
And we still want them scrapped,,,go figure!!.
Why do you feel it necessary to be personally abusive, Richard? Unnecessary and unprofessional.
And for the record, what you actually said was "raises the standard of my service without adding to any liability". I think that tells us all we need to know about your commitment to your clients.
And Richard, you might want to be careful who you pick fights with on comment threads. You never know when it might come back to bite you.
"so what you seem to be saying is that the HIP makes your life easier."
I could comment more cynically but I'll simply state what is obvious to any open-minded observer: what I said was that the HIP makes the service I provide better. It might sometimes make my life a little easier (although it involves slightly more work) but the main objective from my perspective is to provide a better service to my client. Evidently something you, "Property Insider", have no interest in whatsoever.
One might say that yours is an attitude of a person obstinately or intolerantly devoted to their own opinions and prejudices. There's a popular word for that kind of person.
@My two pennies - I think we can draw our own conclusions from your refusal to come out of the shadows. How is everything in the AHIPP bunker?
@Richard Large - so what you seem to be saying is that the HIP makes your life easier. Well that's the main thing isn't it?
@PeeBee - I think you might have a long wait for an answer :)
You know, it's funny that pro-HIP cheerleaders love to label me and others who object to HIPs as 'dinosaurs' who fear change. In fact nothing could be further from the truth. So perhaps I could correct that perception by pointing out that it's not change I fear, but incompetent delivery of shit ideas, forced on the many by the powerful few in the name of 'speeding up transactions'. We all know HIPs are 100% about profit - profit that goes into the pockets of a few old men and their pension funds. So let's be clear who the dinosaurs are here - it sure as hell ain't me.
I can tell you that I have no doubt whatsoever that HIPs will be gone sooner rather than later. Funding for HIP providers will dry up the moment Labour loses the election. It will be moot as to how the Govt will suspend them because the capacity will dry up as the HIP companies disappear. Is that 'exceptional' enough for you, "My Two Penises"?
There's unlikely to be more than a month or so's cashflow in most of these firms and there's certainly no contingency left - so I'd suggest if you are owed money/commission by a HIP company - especially the corporate owned ones that have already laid off staff and downsized, you might want to get on the phone and expedite payment before it's too late. A few weeks after the election, you might be having the conversation with the official receiver.
You will be pleased to hear I am now going into a period of commenting hiatus until after the election. I look forward to seeing some of you back here then to chew the fat - but not the AHIPP trolls - they might be otherwise engaged. Laters.
(sur)realist: please answer my original question.
Peebee - you obviously have not studied my writing style enough to distinguish me from someone else. Since HIPs were introduced, I have not had many vendors ask to see a HIP but I have had even few complain about needing one!
I do privately commissioned surveys for homebuyers. For about the last 2 years I have always asked to see the HIP & I always receive it, usually within seconds by email or link from the agent.
I look at the PIQ which can tell me several useful things about work done, service records etc;
the title can often give an idea of age of property;
on a lease the definition of the property & repairing covenants are extremely useful to me (yes, we surveyors are supposed to know about this stuff);
I quote the DN title number in my report so at least the conveyancer knows I have surveyed the same property they are dealing with;
the title plan shows the extent, which I can visually confirm on site (or not, as has been known);
the searches give very useful information on planning, FENSA & other Building Regulation certification, other planning information, confirm the sewer & water main locations & whether it is metered.
The EPC can be of interest (though I have found quite a few are based on blatantly wrong data).
Occasionally I get an even better HIP, with guarantees, radon test results, Completion Certificates, planning documents etc which is really helpful & can save a lot of later hassle for the conveyancer & client.
I KNOW for a fact that the extra advice I can put in a report through having spent 10 minutes looking at the HIP has been extremely useful to clients, has allowed conveyancers to proceed without further needless enquiries (or raise relevant, rather than superfluous further queries) & as a result has allowed sales to exchange more rapidly.
I have no problem with this as it is factual information that raises the standard of my service without adding to any liability (Indeed a better-advised client is far more appreciative than one who gets a report advising all sorts of warning because of lack of information).
I can't say in how many cases this has specifically helped but I know it has been a fair few. And that's with the half-baked thing we have at present.
I have just surveyed a house that didn't have a HIP as it had been on the market for so long. There were several areas that I have had to advise further investigation & referral back to me because of the lack of HIP (the sort of referral back I often had to do in pre-HIP days). The seller is champing at the bit to exchange. I know it could have been cleared up far more quickly if a HIP had been available.
The argument that a HIP is a waste of time is total rubbish & based presumably on a lack of knowledge of how a HIP can be put to good use. It's not an argument, it's a fact.
Sorry this is so long but the points clearly need to be spelt out.
realist: Sir (that would make you surrealist - more apt don't you think... ;0)) - please explain why you decide to use me as primary example of these 'dinosaurs'? I have revisited my posts and have not been anti-HIP in this thread - simply disagreeing with the 'facts and figures', and the principle of using HIPs as a cash-cow which has been pushed in the face of Agents by providers who are now using it as their only reasonable defence to keep the product. I have always put forward my view that HIPs does not succeed in what it was introduced for; also that I firmly believe that a percentage of speculative sellers will not put their properties on the market as a result of the cost - a percentage of which would subsequently sell and add much-needed numbers to someone's statistics list. Pre-HIPs, there were problems with the system. Post HIPs, the majority of those problems still exist, plus some new ones thrown in for good measure. I have always said that I have no axe to grind with HIP providers - but if they want a fight I ain't ever walked away from one... and I ain't ever been put on my a$$...
(by the way, your writing style and the words you use are extremely reminiscent of our friend My two pennies...) Do you "both" work for Wrigglesworth by any chance...?
Realist - without wishing to sound rude, I dont see how you are better informed than those in the DCLG and the Shadow Housing Minister. I was on the HIPs Marketing Committee and recall the discussion over the effect of this s.162. The sunset clause was put there at the insistence of the House of Lords so that HIPs could be reviewed without having to be placed before Parliament as their Lordships were against implementation. Grant Shapps is adamant he can and will suspend and abolish the mandatory requirement. Cleggs party agree. Still, as we wont agree on this, we will have to wait and see. I think it will 3-6months - but I may be wrong. Fancy a bet? :)
my two pennies - good to see I'm not the only one who understands legislation and that HIPs will be around for a long time still, whether peebee and his prehistoric friends likes it or not!
Property Insider.
I have no intension of displaying my name and who I work for, but I can confirm that I have no association with either AHIPP or Simply HIP. You’ll have to take my word for it (but don’t let that stop you giving to charity).
I am just offering an alternative opinion to yours. I do not agree with most of what you have posted, and I have offered an alternative view.
HIPs will be here until the end of 2011, that’s my bet, and when I win I’ll give all my winnings to charity.
The person posting as"My two pennies" = Mike Ockenden and/or Ashley King and I claim my £5.
So you tell me I don't know what I'm talking about and I should listen to the Land Data Great Housing Market Debate? Would that be the same debate hosted by the Wriglesworth Consultancy - PR advisors to AHIPP and SimplyHIP? Somehow I don't think many HIP objectors were on the guest list.
You show up here having never posted here under your pseudonym before and quote factoids directly from the AHIPP playbook and expect not to be exposed?
Yet again, evidence that the only people speaking up for HIPs are HIP providers or their suppliers.
If you would care to share your full name and where you work - and it turns out you are not on the HIP payroll (to be verified by EAT) - I will gladly donate £100 to a charity of your choice. Remember, your IP address doesn't lie even if you do...
Over to you sunshine.
Property Insider
“The Secretary of State will use the recession as justification”
Nonsense, instruction levels (and that’s the key area) are higher now than they were before HIPs were introduced. The only way to stimulate the property market (sell more houses) is to make mortgages more affordable.
“Removing HIPs will reduce costs, red tape and stimulate the property market”
There is simply no evidence to support this?
“It will also be supported by 90% of the industry if not more.”
Call yourself a ‘Property Insider’? You clearly don’t communicate with anyone within the industry. In a recent vote of around 100 industry leaders, at The Land Data Great Housing Debate held in Westminster, only four members of the audience voted to scrap HIPs while the majority supported the motion to adapt but not scrap them.
“HIPs will be gone. There is no doubt whatsoever.”
I disagree. Included in their manifesto or not, do you really think HIPs will be on the radar of the LibDems if a Labour/LibDem coalition is the election outcome? Do me a favour!
Property Insider: Wonderful idea - except for the fact that certain factions (on BOTH sides...) would do their utmost to bugger up the findings of the survey.
I believe that the heart of the matter is that no-one can prove their argument for or against conclusively. It is all supposition, hearsay or personal opinion. I have a view; you have a view; we all have a view. Where we go from here I don't know - I'm just glad I'm not the person who has to take the next action!
Damned if he does, damned if he doesn't...
It's clear from the comments on this thread and others that most agents are making a reasonably significant amount of money from HIPs. Yet the HIP providers (and would be HIP providers) would have us believe that the HIP doesn't increase the cost of moving. How about some fact based analysis of this specific issues, Rosalind? An anonymous survey of who earns what out of HIPs and/or conveyancing referrals would make interesting reading. Not to predict the outcome but it might finally put to bed the myth that HIPs don't increase the cost of moving home.
"This section allows the Secretary of State by order to suspend ...........
It goes on to say that this power will only be used in exceptional circumstances."
--------------------------
The exceptional circumstances do not need necessarily to relate directly to HIPs. The Secretary of State will use the recession as justification - removing HIPs will reduce costs, red tape and stimulate the property market and is the only sensible course of action etc etc. It will also be supported by 90% of the industry if not more. There will be the expected legal threats from Ockenden et al but I doubt whether his backers will have the stomach for a legal fight they can't win.
HIPs will be gone. There is no doubt whatsoever.
Mike - count me in as a founding member! Can I defer payment though? Cashflow - you know how it is.
The prize for the most valid comment goes to:
Yawn.
The system depends on linked transactions so universality is essential to improve things. That will never happen with the fragmentation, ignorance & complacency of many in the various sectors. Which is why the government sought to deal with it. Shame they screwed up, but just ditching it would be utter lunacy. Now people have the facility to get up-front information so easily, many will see the benefits; but idiot blinkered dinosaurs would hold them up. There would be loads of 2 track transactions - some fast & efficient but ultimately held up by the slow pathetic ones.
Brian the Entrepreneur - excellent, im glad i went to the effort of reading the posts! some of which are a bit long winded - Nat, any chance of a maximum number of characters?
Brian the Enterpreteur - I think we may be thinkning along the same lines - we are making contact with a search organisation that have devised a way to get local information that is almost unrecognisable from the real thing and will be setting up a trade body to represent them called SLIPSHOD (the Society of limited independent personal search (home or domiciles)). This will run alongside our own trade body representing th new enhanced information product that we are trying to persuade everyone to market - the Home Exchange Ready Pack Extension Service - that we think we can persuade the new government to put in the place of the misunderstood HIP. Subscriptino to both organisations will be a discounted £15,000 per annum if you sign up for the next five years. Interested???
Property Insider quote:
Pray tell, how will you achieve this speed increase when the other people in the chain are not using your revolutionary product? The market is sufficiently fragmented that this will almost never be the case so the time savings you predict are likely to be negligible or non-existent.
Another great supporting comment for the HIP (or the renamed future HIP) to be mandatory or it will not work. Any government will need to keep the HIP or perform effective reform from the consultation process. This new “HIP” will only work if mandatory for the reason above.
Colin:
Not entirely sure who you are but I can assure you gaining market share in a fragmented market with or without support from Mr Shapps is very difficult no matter how good your product is when the estate agents control the vendors. The only option is for Mr Shapps to accept that for any reform to work it will need to be wrapped with the so called “Red Tape”. This allows informed professionals to force uninformed professionals to make the reform work (required in a fragmented market).
The property industry is unfortunately so fragmented only compulsory legislation will help. The left arm does not want to help the right arm and thus effective reform can not occur. Reform is not for the estate agents (they market and sell which is what they are good at). Reform is for the latter conveyancing stage however the only solution so far has been to introduce reform prior to the conveyancing (HIP). This affects estate agents with no direct benefit. Informed solicitors now support HIPs but unfortunately uninformed estate agents (the majority) do not support HIPs as they can not see the benefit. I don’t blame estate agents for not being in support of the HIP process but this is due to their business models and nothing to do with the HIP concept. Due to the obvious requirement to involve a non benefiting party (estate agents) in order to solve another parties issues (conveyancers) any reform can not be optional as it will not work.
You've missed out one key element of that section Mr Walker.
"This section allows the Secretary of State by order to suspend ...........
It goes on to say that this power will only be used in exceptional circumstances."
There is no evidence whatsoever to suggest that HIPs have had a negative impact on the property market. In fact a recent OFT report does suggest quite the opposite?
good grief, what a lot of comments, so I'll join in; I could not give a flying fig whether HIPs stay or go, if they stay I will continue earning (and disclosing) a commission of about £100 a hip, I do not feel guilty as the HIP process easily consumes £100 worth of time when you have to arrange DEA appointments, PIQ's, e-mailing it (normally several times) to solicitors etc, and my vendors know they are getting a proper HIP product.
If they go, then fine, it may lead to more 'speculative' listings, but thats about it. HIPs have been tried and tested and proved that they do not work.
Realist -
I have spoken with someone in the know at the DCLG who sent me this in response to the inability of the Govt to suspend HIPs
"The underlying legislation for Home Information Packs is John Prescott's Housing Act 2004. A clause was placed in the Bill towards its final stages in Parliament, allowing the Secretary of State to suspend HIPs. This was part of a last-minute compromise in a showdown between the Government and the House of Lords (which opposed HIPs).
Section 162: Suspension of duties under sections 155 to 159
Since this is an Order of the Secretary of State, rather than affirmative secondary legislation, Parliament would not need to be sitting for the order to have effect."
An exchange ready HIP would be a real benefit to consumers. I think what Colin meant PeeBee is that all the ignorance & griping about HIPs being a tax, worthless blah blah just shows they have no interest in improving the consumer experience when buying & selling. Like with conveyancers, if the task gets too simple & straightforward for the consumer, the fees maybe can't be justified. I always thought estate agency should be firstly about putting the right people & properties together, secondly smoothing the pre-contract traumas. If pre-contract traumas were largely resolved by pro-active checks of documents by competent people, then the consumer experience would be a whole lot better. The documents need to be available to do that. Then agents could concentrate on the first priority of their job. Of course the HIP is never looked at by the buyer - why should it be? It needs the advisers of sellers & buyers to actually do something - be pro-active. Why do people think that it's better to discover there are problems just before exchange, than discover & get them resolved beforehand? Can anyone answer that simple question?
Realist - I agree that its primary legislation, however I have spoken with Grant Shapps directly and he was certain he would move to suspend immediately and that it would take 6 months to amend the Act. It may not be the Governments priority, but a Housing Minister only deals with Housing matters, so other priorities are for others to deal with. You may be proved correct - only time will tell.
hips will be here until end of 2011 at the earliest! it's primary legislation - not easy to remove OR quick to remove OR the Government's priority in any way!
Colin - explain - "I do wonder if Estate Agents really care about that though, hard to charge those fees if everything gets sorted so quickly isn't it?"
We get fewer fee disputes where a contract is exchanged swiftly than where there a long conveyancing process. We dont get paid by the hour, we get paid on results. Never has a vendor complained our fees are too high on the basis we got the sale through quickly. They may moan if we find a buyer quickly without advertising, lots of viewing etc, but the speed of the transaction only causes complaint when slow. HIPs make no difference to this process, so I dont really understand your point. I think its harder to justify a fee for something no one wants but that is imposed upon the public by the Labour Party when all other parties and those actually in the Property Industry rather than the periphery agree they dont work. So its just you and Gordon Brown.
Colin... you're simply trying to cash in by offering a service that is not wanted or even needed. I've dealt with many HIP providers before who know absolutely nothing of the property industry. It IS increasing the cost of selling your home and it HAS put people off. HIPs have been a disaster. A re-invention of the same product is a waste of time, money, effort and sanity.
Colin - you seem to choose to ignore my previous post, so I will repeat:
You said on a previous post "I do wonder if Estate Agents really care about that though, hard to charge those fees if everything gets sorted so quickly isn't it?"
Meaning...??
Hi Paul
You missed the point, there will be NO upfront cost to the consumer so there will be no barrier to putting their property on the market, in fact they will be able to get more services ( without upfront payments ) which is why it is a good deal.
I can't go into exact detail now because the product isn't finalised and I don't want the shark Companies getting hold of it and changing it to their benefit.
It's taken over six months to get it this far and I'm sure when we announce it many of you will be asking what the catch is or don't believe it, well there isn't one, it's just been very well negotiated with the Companies that help to provide the wheels in motion for it.
I have met with Grant Shapps office on numerous occasions and do have an official response to the concept by the way by the way!
Brian the Entrepreneur - Brilliant!
Hello sharks, wideboys and geezers. I am a very experienced search clerk/courier van executive with almost 2 years experience in rural Suffolk. I'm on several agents mailing lists for rental property up to £150,000 and I know how rubbish you lot are because nothing comes through. My vast experience in the property market (right to buy scheme) and natural business sense (I almost always pick the winner on Dragons Den) has shown me that there is definitely money to be made from Hips so I have put together a business plan on a Word document with some bullet points about my new Hips making service. It is called HipsHit and will be the market leader in the first couple of months after launch. I have a budget of nearly £100 for marketing and my website template is really flexible and definitely can do email and the internet websites. Also, its not like any other HIp service because it not the same in any way apart from the contents. The searches will come though really quickly and the only fees are the ones that the client pays up front in full. You agents will probably want a cut so I am on here to tell you about it and get your to sell it for me but that doesn't mean i will stop making snarky comments about agents. So anyway, your cut is basically optional and you probably shouldn't take it because that would be immoral. I am really looking for you to be my free distribution network because I will speed up transactions for your clients. You're all crooks anyway lets face it. Not trained and time served as a council admin clerk followed by half a year on the Aldi management trainee scheme like me - so I know what I'm talking about. When HipsHit goes ballistic after the launch, I will probably get a second phone line and maybe a fax to keep up with all the orders from across the country. Please don't send a fax when I'm on partypoker.com though because they are on the same line. A lot of people have already said that want to buy my company but I've had to tell them to wait a bit while I get the company registgered and get my business cards printed first. I would have thought after that, it will probably be worth a lot to the right person. If anyone wants to invest and get in on the ground floor of this opportunity, please email me at brian@cluelessmuppet.com If you leave a message, I'll call you back if I'm not on an airport run.
Colin with respect mate PI has put forward a pretty good argument and made his case point by point. you then come back with "The product will have the benefit of the consumer in mind and will speed up transactions with theteam in place". I'm not being funny but that sounds like a completely meaningless statement. Also "an upfront marketing fee knocked off at the end" sounds a bit like a barrier to vendors putting their houses on the market. How is that a good thing? Sorry Colin but you haven't explained how your product is actually going to improve anything at all. And does Grant Shapps know that you're bandying around his name on here as someone who is endorsing your product?
I forgot to say that I didn't say there was an inbuilt commission, I said that there was the ability for an upfront marketing fee knocked off at the end, totally different and at NO extra cost to the consumer, in fact our intention is to pursuade agents to do away with referrals, negotiate discounts with local Conveyancers and give the consumer the choice and ability to decide their own costs.
If the product was just for our use then I'd agree with you but this will become available across the whole market very quickly.
Grant Shapps has already seen the proposal and liked the concept, maybe you are all counting your chickens before they have hatched?
The product will have the benefit of the consumer in mind and will speed up transactions with theteam in place, of course nothing works 100% of the time but this will go a long way.
As for searches the charging regulations for LAs came in because of HIPs and helped to bring down fees ( over 50% in some cases) and personal searches have come down in price and are now a far superior product to pre HIPs so you argument doesn't hold water.
I understand your objections, nobody likes to be told what to do in "their" Industry when they "know everything" about it but it happens in every other Industry where the consumer is involved so why not Estate Agency?
I wonder the HIP market attracts so many fantasists, each with their own uniquely inept take on the get rich quick scheme. Would it be too much to ask that HIP providers have a) a track record in large scale process improvement projects b) the ability to write a comprehensive business plan and c) a comprehensive knowledge of the residential property market in multiple regions d) significant success in operating in (c). Without at least 2 of the above, these people are in the same category as so called 'social media experts', 'internet marketers' or 'business coaches'. A total and utter waste of space.
Sorry, Colin but I started to lose interest when I read "we are curerently finalising a product not disimilar to those already on the market but far superior". Isn't that what every have-a-go HIP provider says? I note your "product" involves the same HIP components and a built in commission. How exactly is that "win win" or for that matter, any different to any other HIP sales pitch. It's not really clear what you mean by the HIP provider being an "agent" for the conveyancer. How precisely does that assist my clients and what will be done differently to the existing process - agent requests HIP, documents are assembled, HIP is forwarded to agent, buyer ignores HIP...? You also make one or two entirely false claims; firstly that the price of searches has fallen due to HIPs. This makes me rather wonder if you know anything at all about the property data market. In 2006, prior to the introduction of HIPs, the average price of personal and official searches was in freefall, largely to competition and NLIS process improvements, nothing to do with HIPs which hadn't been introduced. Secondly, you twice make the claim that your product will "allow sales to progress in a much faster way". Pray tell, how will you achieve this speed increase when the other people in the chain are not using your revolutionary product? The market is sufficiently fragmented that this will almost never be the case so the time savings you predict are likely to be negligible or non-existent. Your claim that "there has been no increae in costs to the consumer" has no bearing in fact. This article is predicated on the exact opposite - many agents are earning significant revenues from HIP referrals and related upselling. How exactly is this not increased cost? And a word to the wise, probably best not to refer to your clients as "coonsumers".
Oh please Colin. In the words of our highly regarded Prime Minister, 'Get real!' The markups on HIPs by many agents is undoubtedly increasing costs. Take that well known HIP proponent, Mr C. O'Nells. He charges £99 up front for a pack, then another £399 + Vat and £150 + Vat admin charge if you withdraw the property. Fair to the consumer? I think not. Just because agents are making shedloads of cash out of HIPs does not make the pack a benefit. Except to those who reap the rewards. The sooner they are gone, the better.
Colin: "I do wonder if Estate Agents really care about that though, hard to charge those fees if everything gets sorted so quickly isn't it?"
Meaning...??
Your argument would hold water property insider if HIPs base p[rice was still £300-£400 as in the early days but due to the competitive nature of the Business and Search cost reductions ( totally because of HIPs) there has been no increae in costs to the consumer, those agents who do take commissions are taking less than before to try and win the take ons and onlty even the costs out.
Our proposals will involve the HIP provider being an "agent" for the Conveyancer and supplying documents that they ask for to get the property truly ready for sale, every property has to be visited as part of the HIP/EPC and makes the HIP provider the best agent to chase paperwork that the Conveyancer requires, FENSA certificates etc.
Rob was right and this is a win win for everyone involved and especially for the consumer who will see transaction times drop as they should do if everyone works together.
I do wonder if Estate Agents really care about that though, hard to charge those fees if everything gets sorted so quickly isn't it?
What a short-sighted, vacuous and unintelligent defence of HIPs. By definition, if the loss of HIPs would leave a 'black hole' in the industry, this rather implies that the income derived from HIPs was not available prior to their introduction. This demonstrates perfectly that *HIPS INCREASE THE COST OF MOVING*, something the industry was assured would not be the case. Secondly, to admit that the HIP is being used as a Trojan Horse for bundling other additional revenue generating products is surely testament to this man's regard for his clients (and intellect for sharing this shady practice openly). Yet again, it is an undisputed fact that the only people I have ever heard defend HIPs are those who directly benefit from HIP production or distribution. It is thanks to greedy intermediaries (and some agents) that the ill conceived HIP made it from Labour's bad ideas flip chart to the statute books. Anyway, 10 more days ladies and gentlemen - 10 more days.
Dear RespondPlease - I am definitely not pro HIP and not sure why you may feel I am - as for being a friend of Gordon's, actually I wouldn't p*ss on him if he was on fire!
My point on this issue is simply that there is a substantial income stream feeding into agents from HIPS which will potentially go. Lots of respondees feel that there will be a huge uplift in instruction and sale volumes if HIPS go - I'm not convinced.
As for agents declaring income from HIPS, this is no different than earning from mortgages and ancillary products, conveyancing etc etc. The agents on here who feel it is "disgusting" to earn out of HIPS are entitled to that view and presumably try and make market advantage with their clients accordingly- I assume they provide every potential vendor with details of every HIP producer in the UK to ensure they are getting the best deal - likewise with conveyancing and mortgages. If they do, great. If they don't then that's fine with me too!
I have absolutely no sympathy for those aAgents who have tried to profiteer from the HIP.I moraly have not made a single pound from what i believe is an unfair Tax on homeowners. With the demise of the HIP, people may start putting their properties back on the market..
HIP Matters.
You are quite correct, conveyancers do not work for nothing, but the majority of their costs and fees, including the agents commission, are normally deducted from the sale price on completion? So no significant up front costs than at present for the vendor. Of course if the property is withdrawn for any reason then any 'out of pocket' costa are payable - normal commerce.
Many will probably be pleased that I shall have nothing more to say on this subject, until possibly after the 6th May!
please HIPS need to go
they just dont work. People shop around for them now anyway. I looked into producing them myself but you can pick them up for £200.00.
For leasehold properties they dont even contain the leasehold information pack. The Government basically were trying to produce more jobs and tax revenue.
EPC on rentlas dont make me laugh. So how would a grade 1/2 listed house fair up on an EPC. Searches are always out of date, i keep trying to indemnify.
Just get rid of them.
Exactly, you hit the nail on the head. Alot of people have put alot of time in and decades later YOU STILL CAN'T GET IT RIGHT.
Give up HIP's, it's staring you right in the face. I'm sure everyone has better things to do. This is no magic wand, just the person who see's you in the bathroom first thing in the morning (what a sight).
Ray Sheringham - This is the logic that's needed. This route would be far more productive and prevent 3rd parties cashing in, who simply do not have the knowledge (in most cases). All of these people aiming to "re-invent" the HIP package are now clutching at straws. A smooth process does not need to include the HIP sector at all. Many are saying that a re-designed or marketing ready pack is the solution...but it just sounds like vested interests wanting to protect their existence and income to me...
Ray - what Colin is proposing is just what you ask for (we're also working on it with him). The fact is that no-one has been able to come up with a way of doing at minimal up-front cost until HIP providers like us & Colin got involved and (Colin in particular) put a lot of time & hard work in. A traditional solicitor would rightly not do all this without charging, so I'm not sure why you think it ought to be so easy.
The HIP is a complete waste of time and money.
If a few large Corporates lose out because of their demise -so what!
They gambled on the current governments plans succeeding and may well have lost.
If we do lose some big names from our industry as a result of the abolition of HIPS so be it.
There is plenty of strength in depth for our businesses to survive.
Integra? Are you still with us or are you off to the studio to sit on Gordon Brown's shoulder on Thursday's debate?!
Colin,if all you say is true it appears to be a win, win situation for all involved. Maybe we shouldn't knock it till we see the detail.
Colin.
I have never said allow up to 28 days to prepare anything.
However, I have opined that by making it compulsory to use a conveyancer at the start of first day marketing with instructions and the responsibility to OBTAIN ALL documentation (including an EPC)within a defined very short timescale. It would speed everything.
All legal work under one roof - no need for seperate stand alone HIP providers?
As you say no, or minimal, up-front costs should be possible. I await your solution with great interest!
the fact is, people making money from HIP's will tell you it's good for the industry, people at the sharp end will tell you it has had virtually no real benefit, and when there are delays in it's product... guess what, It's more often a local authority causing the delay or the good old absentee landlord, both of which restrict the freedom of the owner to get on with selling the property, the sooner Hips's is scrapped the better, and Colin stop using this site to sell more useless packages !!
So Mr Day wrote this article! Oh, and proclaimed himself to be "an industry expert".
My God, EAT, what next?
I would gladly pay £500 per month 'not' to have hips.thats how crap/rip off/stealth tax/ waste of time they are.
I spend hours chasing after these hips,,geting busy now and may need a secretary just to keep on top of them.
It is agents who have been proper stiched up here as usual.
Rob
we are curerently finalising a product not disimilar to those already on the market but far superior, an excellent product for the coonsumer, the Estate agent and the conveyancer, Ray from sheringham has often quoted that all you need is the conveyancer on from the start with 28 days to get the property exchange ready, what he fails to do ( he should be a politician is to say how that happens without the consumer having to fork even more out upfropnt than he does now!
Our package will allow for the HIP and Conveyancing to be provided from the point of marketing with No upfront cost to the consumer, there may even be room for a transparent upfront marketing fee for the Estate Agent that they would knock off the fee at point of sale giving them a great cash flow situation but not at any upfront cost to the consumer.
This will proceed to allow sales to progress in a much faster way which was the true intention if HIPs whatever the EAs on here say.
Ray as anyone involved in the Industry know already is wrong about the suspension of HIPs, they cannot be suspended if the Tories win, that is just wishful thinking as the clause is only for the real issues of HIPs not working and totally affecting the market which is public knowledge isn't the case ( OFT report) and why Grant Shapps changed his terminology form " immediately" to within 100 days!
We are hopefully going to be able to offer a complete package that will really change the perception of HIPs!
Integra: That would be 25 instructions per month who
a) do not already possess a HIP and
b) take the Agent at face value and allow him to arrange, even though they could source their own at least £100 cheaper.
I would welcome comments from Agents as to the proportion of new instructions they list that fall under this category... my guess is 66-75% - which means your Agent is actually listing 32-35 props a month. Bloody good going for a one-man band...
integra, not charging commision for faxing a bit of paper to a HIP firm is 'holier than thou'? Agents are taking advantage of HIP's. Charging extra for a floor plan and telling people that its part of their marketing really gets my goat. Vendors I talk to that have paid £400 and upwards for a document that costs £200 to prepare are shocked when they find out they have been had, Not to mention agents that are holding peoples HIP's to ransom to keep them on a sole agency basis. Supplying a HIP for cost price without any bolt-ons as quickly as i can does not make us holier than thou, it just makes us honest.
These desperate agents that are lining their pockets with money paid to them in good faith will have to think of some other way to rob people.......they sicken me.
Mark - Nonsense - it has not made any SIGNIFICANT difference!
"good idea"
It staggers me that hardly anyone in our business thinks HIPS are a bad idea.Getting documentation up front has proved invaluable in speeding up the process of buying/selling.
The government got rid of poll tax and called it the community charge...same ammount of money taken from the community....just a different name.If hips are banned then the contents will still be required to allow a conveyance to go through so why is there always a big uproar.We have all listing staff qualified as deas to speed up the process for the vendors...should we not be able to take part of the hip cost to cover this?Especially as vendors are pleased that their house can go on in 24hrs.
Colin, you are correct. The basic Hip is neither fish nor fowl. Most of the contents are not clear enough for the layman to benefit from, nor detailed enough for the buyers conveyancer to find really useful. An exchange ready pack with a clear precis or plain english summary would help both.
Tell us more about the coveyancer getting involved earlier with no up front payment. How will that become a reality?
Integra - Does your client disclose this income? Its not 'holier than thou' - Its the Law. I have no problem with anyone who makes full disclosure, however, I know of many who don't. I do think it was always odd that so many in the industry criticise HIPs but are happy to profit from them. Many of us knew they would fail and as such felt it would be a bad idea to rely upon what we believed to be a temporary source of income.
hIPs were just another invention by Labour to create more 'non-jobs' and blackmail beneficiaries to vote for them so they could continue dismantling our democracy. Agents should'nt benefit from arranging a hIP, its disgusting.
Excellent debate ranging from the somewhat "holier than thou - we don't make any money from HIPS" response through those who feel that an increase in speculative sellers will more than make up any shortfall in income and one or two who doubt the maths.
PeeBee - whilst it is true that Integra has some very successful clients - my client's £30k pa comes from an average of 25 instructions a month at £100 margin(s) to the agent - not exceptional by any means - also most corporates and large players are making more than £100 per HIP from direct margins, referral fees, panel management fees, "tie ins" on conveyancing and agency terms for example.
EAT have cut a paragraph from my original piece about agents looking to more than make up any shortfalls from increased volumes but I would say that I think there will be many bigger issues that affect volumes going forward than HIP costs - e.g. mortgage availability, job security, increased taxes etc.
BigG - for your information Integra is not dependent on HIPS income either and would benefit from a market operating at greater volumes.
The significant point is that, even if you believe that a post HIPS world will see increased volumes of sales - an agent will still need a strategy (ies) to maximise their advantage or are they going to just hope that things will be better as a result?
Ultimately, HIPs commissions are secret commission paid by the vendor on top of their agreed commission. As such, they should be declared by law. If they are not, then frankly they have been obtained unfairly. Agents who reply on this income need to plan now for life with out this income stream. I am fed up with agents who undercut fees and then subsidise the claimed saving with commissions from Lawyers and HIPs providers. I have no sympathy with them.
Time is running out for all those who are pro HIP's, you need to find yourself another job NOW!!!!
Many a corporate agent will now have to remodel their income plans .... shareholders will be asking some very difficult questions, when they realise the outrageous HIP charges, are no more.
Sausages i say!
HIP's are and never were any use for their original purpose, significantly speeding up the selling and buying process. Agents should not hide behind a lay persons lack of knowledge and profit from flawed legislation. Agents should concentrate more on providing an open, efficient, expeditious and above all professional service.
P.S.
Clutton Cox.
Any government could SUSPEND HIP's (not EPC's)immediately, awaiting scrapping.
If the public don't like HIPS how come the recent OFT report commented about how buyers believe they are a good thing, the problem is that those who post on here are as bad as AHIPP's postings about how great HIPs are, in truth the reality is in the middle of both of you, HIPS aren't perfect but they are a step in the right direction and that step isd about to taken a giant leap in the next few weeks, Ray from Sheringham is always posting about getting the conveyancer on from the point of marketing, that will soon be a reality without the consumer paying apenny up front and will also give greater transparency of who is charging what!
Watch this space!
don't forget a manifesto committment is for the length of the parliament.
Despite the soundings, HIPs even if they were scapped, the next govt could take 4-5 years to do so
Blimey PeeBee, thats not right!
We are quite happy that the funds we will lose from HIP's being scrapped, we will more than make up from the speculative seller that will now come back to the marketplace. We all know at some stage we will sell their property and earn a commission!!
It has been a difficult period for all of us and so its little surprise many have looked to this to generate income to assist in their business funding.
We encourage our branches NOT to profit from Hips as it is (in our view) an unfair 'Tax' which makes it hard enough for sellers to decide to go to the market and as some of you rightly say, unless you diclose this revenue to your clients then you are misleading them. It is our job to explanin all options to our clients and if applicable direct them to a professional provider who can efficiently provide the Hip in good time and for a fair price.
It is concerning that agencies are starting to rely on these incomes rather than perhaps addressing the reasons for their drop in business and finding new ways to imrpove their service or product to win more. We have to move with the times - both Independent & Corporate!... taking advantage of the Public is exactly the type of practice the industry needs to Stamp out. For those profiting from Hips within the rules then of course, good for you, thats how it can be done - so long as your client knows the options available and are not harassed then fair enough
Oh come on.
We all know that HIPS are the work of the devil.
Good! thievin' gits.
Day, who heads Integra Property Services, said: “.....but I would strongly advise agents to think about and plan for the possible scenario of a world without HIPs and to consider what other options they have to generate revenues and cashflow.”
I think people like Mr Day should think about and plan for the possible scenario of a world without HIPs and to consider what other options they have to earn a living! If you honestly believe us Agents rely on HIPS to support our business/lifestyle you are a very sad man.
I'm asking myself if the agent gets his floor plans and photography paid for by the vendors, this is effectively "defrauding" the vendor as they think they are buying a HIP when they are payoing for their own floor plan and photography which the agent should be paying for.
I'm an agent with 3 branches and we pay for this. It seems to me that this agent should also try and cover their branch rent and staff costs in their lettings fees then as well.
After all this galearly wants all his revenue as profit so long as all his costs of running th ebusiness are apid for by someone else.
Shame on this agent and no wonder the whole industry has got such a bad name as its full of cowboys and fraudsters like the agent that is mentioned in the article.
I am happy to pay for floor plans, phoytography, newspaper and portal advertising because I get a return on my investment.
What I don't try and do is DEFRAUD my vendors who think they are paying for just a hip NOT extras that this cheating agent should be paying for!
Disgusted!!!
Hear, hear, wardy!
(so nice for you and I to be on the same side for a change... ;0)).
Mr Day: If, as you say, "I have one single-office agency client who is currently generating around £30,000 per annum from the production of HIPs..." this person must be the number 1 most successful Agent on the planet. We trust you can substantiate this claim...?
If agents need to rely on an extra £100 per HIP as revenue then its time for them to throw the towel in.
99.9% of estate agents want them gone and the public do not want to view them...even when offered. They are a waste of time and I hate to say it again, an "extra tax on selling your home". We all know there will a small loss in HIP revenue, but the benefits of them being abolished are far, far greater (short and especially long term) than keeping this useless 'document'. Let's get the marketing moving...