Some Agents worry if HIPs commissions are Lost |
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26th April 2010
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.”
Eric Walker, MD of Bushells comments - "Lots of agents have been generating around £100 commission from selling HIPs to vendors. They have relied upon this income to a degree and as such will have to get used to losing it if HIPs are abolished as Lib Dems and Conservatives promise to do. We have never accepted commissions from HIPs providers and instead provided them at cost. I have no issue with agents who get introduction fees provided they are declared to the vendors as the Law requires."
