AHIPP: Investigation into HIP prices charged by estate agents

Following the recent Channel 4 News investigation, Ashley King, Chairman of the Association of Home Information Pack Providers (AHIPP), comments on HIP prices charged by estate agents to their clients: "HIP providers often supply HIPs to estate agents on a wholesale price basis. The estate agent charges a retail price to the vendor, which may or may not include a mark-up. Naturally, consumers are free to shop around for the overall service and HIP price that suits them best. The vendor may opt for an all inclusive deal where the cost of the HIP is included in the agent's fee for selling the property. Alternatively, they may be charged a lower fee for selling the property but a higher price for the HIP, which may include the estate agent's mark-up. There are numerous fee options in the market.

"The implication that the retailer's price can never be higher than the cost of the goods supplied is to misunderstand the nature of commerce. In collecting the agent's mark-up as part of the retail price of the HIP, the HIP provider is not in the same position as a solicitor who pays a referral fee in return for receiving work. The fundamental difference here is that the HIP provider acts as an agent for the estate agent in the preparation of the HIP. It is the estate agent who determines the retail price of the HIP, and the estate agent who is legally responsible for ensuring a HIP is in place before the property can be marketed.

"Through its HIP Code, AHIPP has always been committed to ensure that the standard of HIP provision amongst its members is consistently high and provides full protection for consumers. The vast majority of HIP providers subscribe to the code and we would encourage any consumer, agent or other professional to only use Home Information Packs that are provided by HIP Code subscribers.

"The obligations imposed on HIP providers who subscribe to the HIP Code are to inform vendors of the charge for the HIP before it is provided, and to ensure the terms on which the HIP is provided are clear, fair and not misleading."