Fri, 28 Jul 06
The first of what promises to be string of heavy consequences following the government’s U-turn on home information packs has already happened. Property portal giant Rightmove has announced a £22 million pull-out from the Hips business.
Rightmove, which floated on the stock market earlier this year, had intended to become the biggest supplier of home information packs by the time of the intended introduction in June next year.
However, firm now says the unexpected withdrawal of the mandatory home condition report part of the Hip had resulted in greater uncertainty over the final contents of a legally compliant Hip.
"We have therefore concluded that the different requirements of agents, the scaled down revenue opportunity for Rightmove and increased uncertainty, leaves us no option but to withdraw from providing packs to our members," the firm said in a letter to member agents who had signed up with them.
The project has already cost Rightmove some £7 million and they expect to spend another £1.2 million extracting themselves from the business plan.
Rightmove.co.uk was founded by three of the UK’s largest estate agency chains – Halifax, Countrywide & Connells. In March this year Rightmove plc was publicly listed on the London Stock Exchange with the three original investors each retaining a significant shareholding. Shares fell on the government U-turn announcement and stockbroking firm Panmure Gordon is reported to consider Rightmove’s Hips business was now worthless - having previously valued it at £180m.
Rightmove were members of the Association of Home Information Packs Providers and their director general Mike Ockenden stressed that Rightmove's decision did not signal that Hips were dead in the water.
"Rightmove had a very particular business model which meant investing heavily in Hips," he said.
Some other AHIPP members have indicated a commitment to the scheme and have plans ready for Hips with our without the home condition report. However, another AHIPP member Spicerhaart is calling for a boycott of the scheme they are now branding a shambles.
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