First Day Marketing

HIP prices to go up, but government gets it right by Stephen Bennet 10/03/09

After no less than three postponements, the property market is to finally get to grips with First Day Marketing.

First Day Marketing will mean that from 6^th April a HIP must be present before marketing begins unlike at present, where the HIP merely needs to have been ordered.

At the same time, other changes to the HIP will include a new Property Information Questionnaire and an end to unanswered questions in local searches. The temporary ‘Lease document only’ provision will be made permanent for Leasehold properties.

While these latter changes are to the good, the end to unanswered questions has a nasty drawback – the cost of a personal search will go up and thereby force the price of a HIP up by £80 – £150. Indeed, if the price increase is steep enough to force personal search agents out of business (because the cost of a personal search may be too close to that of one from the Local Authority), then the waiting time for search turnaround will increase and we will be back to the dark days before personal search agents when searches often took weeks.

Despite the ritual moan from the National Association of Estate Agents (NAEA) decrying HIPs, there is every indication that, this time, the government may have got it right. The NAEA call to scrap HIPs would return the house buyer to the flawed process that HIPs was designed to improve, namely house-buyers making offers on properties with little or no information only to discover, some weeks later that there is a problem with the biggest purchase of their lives and which could have been identified at the start within the HIP.

Furthermore, now that the search will contain all the answers needed, HIPs will become worthwhile looking at, contrary to the present position where the NAEA claim that only 30% of buyers look at the HIP. Indeed, given that the HIP is designed to turn up problems early and protect buyers, the suspicion will be that further NAEA moans about the cost of a HIP hindering the housing market will be a cover for the exposure (and thereby reduced transactions) of problem properties and which would deprive estate agents of commissions from selling dodgy properties.

In any case, the cost of a HIP is a red herring since searches etc have to be done on a property even without HIPs. Indeed, the only additional item in the HIP is the Energy Performance Certificate (EPC), which is required by EU law and usually costs £60 - £90 or so. The remainder of the pack is made up of the searches, details of title, etc formerly provided by the conveyancing solicitor. The difference now is that we have this information at the beginning of the transaction and exchange times have, as a result, improved by an average of twelve days.

With twenty major HIP providers going out of business within the last year, the future looks particularly bright for smaller independents. As anyone involved in the HIP ordering process knows, some national HIP providers take 2-3 weeks for turnaround. By contrast, smaller providers covering just their local area are locally responsive, competitively priced and quick.

In common with most independents, AML HIP’s price comes in well under those of the High Street giants. And turnaround times are impressive. The norm is 3-4 days and while 5 days is the quoted standard, a lightening fast 2 days has been achieved on a number of occasions. So while some home owners and estate agents will suffer from poor service provision, those using the quicker independents such as AML HIPs will reap the rewards.

With the most stringent training and accreditation standards in the personal search industry and insurance of between £2million and £4million per personal search (a feature conspicuously absent from local authority searches), home owners and property professionals have a new champion in the shape of IPSA.

The big freeze - Snow and prices show Local is Best by Stephen Bennet 08/01/10

Although the cost of searches have seen an increase nationally of £11 as from the 1st January, AML HIPs has NOT increased its prices.

Better still, because AML HIPs does not collect revenue for Gordon Brown, the parallel increase of 2½% in VAT is another cost saved as all AML HIP prices are VAT free.

Finally, it’s not all about price. Quality of service is important too. When the snow fell and thousands were unable to get to work, AML HIPs were business as normal because we were already on the spot. AML HIPs - the LOCAL HIP provider.