Estate agents profit from secret HIP commission
An investigation by Channel 4 News claims that up to £100 is being added to the cost of some Home Information Packs (HIPS) to line the pockets of estate agents.
In one case cited by the programme, a homeowner was paying almost £150 more for a pack than the price originally quoted by the HIP provider.
The Law Society has condemned the practice of HIP firms paying commissions to property agents and the Royal Institution of Chartered Surveyors says it is investigating the allegations.
AHIPP, the body that represents HIP companies, told the programme that where commission is paid, the HIP provider is acting as an agent for the estate agent in the preparation of the HIP, adding that it is therefore the estate agent who sets the retail price of the HIP.
The highly controversial HIP scheme means vendors have to pay between £300 and £400 for a pack before a house can be marketed.
The packs are intended to speed up and improve the home buying and selling process but are regarded as a waste of time by many property professionals because local searches can be out of date by the time a house is sold and the packs do not contain the one document considered essential by most home buyers, a survey.
The chief executive of the National Association of Estate Agents, Peter Bolton King, has warned that any estate agent receiving commission from a HIP provider, without informing the house seller, is breaking the Association’s rules of conduct and is therefore liable for a fine or expulsion.