RSS feedsHouse buyers, sellers and estate agents have all been confused over the government's introduction of home information packs (HIPs) and stuck in the middle were the companies that sprung up to produce the reports. But now that the picture is clear - from 14 December last year, anyone planning to sell their home, irrespective of size, has been required to produce a HIP - the HIP market is expected to take off.
Bluechip Property Information is one such company hoping to win a slice of the 1.5 million house sales each year. Based in Kent, Bluechip provides property information services including HIPs, energy performance certificates (EPCs), property condition reports and hidden defects insurance. The business was established in August 2007 following a brief period as part of a national HIP franchise operation.
Managing director Mark Brewer currently has four domestic energy assessors (DEAs) on the team, alongside three office staff: 'Until we are more certain of market requirements we will augment our DEA team with sub-contract operators that will be accredited to our own standards as well as those laid down by the DEA certification scheme that they belong to,' Brewer says.
Until they moved into serviced offices at the beginning of the year 2008, Bluechip was operating out of Brewer's spare room and a colleague's basement.
'Spending money on offices was an unnecessary luxury, but we inevitably needed to build a suitable face for the business with well-situated offices.
'We have now been able to finalise marketing materials. Initially, we were only able to market to business-to-business customers as our experience with them showed that more effort and resource were required to handle these customers correctly.'
Bluechip launched a website in January 2008 and reviewed its business processes so that it is now in a position to re-engineer its IT systems to better support the customer service operations necessary to handle the public as well as its business partners.
As the property market traditionally hits its stride in March, Bluechip intends to use local property magazines to deliver targeted leaflets to buyers and sellers. Bluechip has also made extensive mail-outs to social housing organisations and letting agencies to build a pipeline of work for later in the year. 'We have been encouraged by the responses which seem to indicate that we are the first to be breaking this ground,' he says.
From September 2007 to March 2008, turnover is expected to hit £100,000. This period saw the staged introduction of HIPs and the impact of the credit crunch during the traditionally quiet period in the residential market. 'In the next financial year, we hope to lift turnover significantly towards £1m,' says Brewer, now that all properties require a HIP.
This year also sees the inclusion of new-builds in HIP law and the introduction of requirements for let properties to have EPCs.
'We also anticipate providing a new product, a hidden defects warranty, which provides cover for defects not detected on an inspection of the visible parts of the property.'
Bluechip has entered into a factoring deal with Venture Finance to support its cashflow - the deal allows Bluechip to realise 70% of the value of its invoices while removing the need to spend time chasing up late payments.
It also has £60,000 of shareholder investments and has investigated the possibility of small business loans, but has found banks are struggling to understand the market.
As Brewer says: 'The lack of clear direction and commitment by the government has created immense problems in engaging and educating business partners.'
Main challenges:
• Helping potential lenders understand the market and the business model
• Gearing up for significant growth in turnover
• Effective marketing to public and business partners
• Launch of new products
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