Inventory Provider FAQ

Why the need for Inventories

The provision of letting inventories is currently a fragmented and uncontrolled business in the UK with a disparate quality and range of products. The need to regularize and improve the Inventory supply chain is coming under close scrutiny as the Government moves further towards statutory regulation of the lettings industry; this includes a Government review of the sector during 2008.

From 6 April 2007, the Government made it compulsory for those receiving tenancy deposits in England and Wales to join a scheme that safeguards deposits for the duration of a tenancy and offers resolution procedures should disputes arise, an approved Tenancy Deposit Scheme (TDS), of which there are a number. An inventory and record of the condition of the building at the beginning and end of a tenancy are central to this process.

The Licensed Inventory Provider Scheme (LIPS), has developed a voluntary, national system for the training and regulation of inventory providers.

What are the opportunities for Inventories

There are approximately 2.1million Assured Shorthold Tenancies (ASTs) in England in 2007 (source DCLG survey of English housing). The average length of a residential tenancy is currently approximately 14 months. Well over 1 million of these tenancies are managed by a structured industry of Letting Agents or Corporate Landlords.

Inventory Providers may be instructed to carry out one or all of the following at different stages of the tenancy:

• Inventory and Check-in
• Check-out
• Interim Visits

What happens once you have gained the Award

Once you have gained the Award, you can apply to become member of The Licensed Inventory Provider Scheme and thus be able to gain access to the software to be able to produce and lodge your LIPS approved inventories. Annual membership of the LIPS scheme is currently £200.

Licensed Inventory Provider Scheme have chosen to contract with eTech Ltd because they specialise in the creation and supply of bespoke surveying software especially for use with on-site handheld, pda devices.

The two organisations have developed the software that you will use to produce your Licensed Inventory Provider Scheme approved inventories.

You will also need to enter into a separate contract with eTech Ltd to obtain the handheld PDA and IT support services to be able to produce and lodge your inventories.

What is the expected level of instructions that I would receive for Inventories

It is unknown how many instructions you can expect to receive as this will depend on your region and where you can source the work from in your area.

We will seek to supply inventories via the inventory portal but cannot guarantee any minimum workflow as this will be a fully competitive, open marketplace. Put simply, this is an opportunity to enter another field of business. We are not responsible for your personal business planning. You must be prepared to develop you own leads to market.

How much might I be able to charge per inventory

We urge you to do your own market research whereby an internet search will reveal fee scales from inventory providers charging anywhere from a minimum of £75 +Vat upwards to well over £100 +Vat per report, depending on the size of the property and whether furnished or unfurnished. These fees would be for privately sourced work into your own business and some regional variations may also exist.

Most corporate businesses will look for fixed price supply options and if you receive instructions from a panel, it is normal that the panel will retain a share of the gross fee.

What are the Costs associated with becoming an inventory provider via the LIPS system

To be clear on all costs to start in this industry:

Up front investment

To get started you will need to invest in training from property-careers.com (£295 + VAT), Licensed Inventory Provider Scheme membership (£200 + VAT pa) and purchase of the appropriate handheld device and optional support package from eTech Ltd (from £420 + VAT).

Per-click charges

You will be charged a per-click accreditation charge for the Licensed Inventory Provider Scheme accreditation scheme to cover the QA lodgement and PI/PL insurances for each inventory completed on the system (not more than £6.25 + Vat per click).

You will also contract to pay separately to eTech Ltd per-click for the inventory report software use, floor plan software use and case delivery through their bespoke Work Management System. The charge for all of these combined services is £5.50 + Vat per report.

Whilst the exact breakdown of these charges is not yet finalised, the total disbursement per report is expected therefore to be no more than £11.75+ Vat per inventory.

Can other inventory software be used in the LIPS accreditation scheme

No. The LIPS scheme has contracted exclusively with eTech. This unique software is only available to accredited members of the Licensed Inventory Provider Scheme.

eTech will advise members whether the software can be run on other PDA hardware systems or provide options for purchase of their approved devices.

For more details about Inventory Provider training call our free advice line on 0800 731 6804.