Homeowners set to give HIPs the slip

Published 23rd Aug 2007

Millions of homeowners plan to exploit a loophole to avoid purchasing the Home Information Packs (HIPs) that are now mandatory for anyone selling a home with four bedrooms or more - and will be required for three bedroom homes from 10 September 2007.

In order to avoid shelling out for a HIP, 4.5 million homeowners with four bedrooms said they would be prepared to market their home as three bedroom home - and describe their fourth bedroom as something else.

Research by Abbey Mortgages found that the most popular way to remarket a fourth bedroom, according to 82 per cent, is as a study. The word ‘study’ could well become a code-name for a fourth bedroom on property’s particulars - and millions more homeowners could consider this technique now that the Government has announced that HIPs will be extended to include all three-bedroom properties put up for sale from September 10.

Other names that people would use to describe their extra bedroom include:
• Playroom – 21 per cent
• Games room – 15 per cent
• Walk in wardrobe – 12 per cent
• TV room – 6 per cent
• Library – 4 per cent
• Computer room – 3 per cent

Despite this, Abbey is warning homeowners against marketing their property as having a reduced number of bedrooms. Doing so may make your home appear over priced and damage your chances of selling, which outweighs the relatively low cost of HIPs.

Furthermore, with 89 per cent of Britons now using the Internet to search for properties, and 73 per cent using the number of bedrooms as a way of filtering out irrelevant properties from a search, you may also run the risk of being missed by potential buyers.

Nici Audhlam Gardiner, Head of Mortgages at Abbey, said: “While HIPs might seem a hassle we think it would pay in the long run to play it a straight rather than going through this loophole. By remarketing your home as a two or three bedroom house with a study, you’ll become invisible to thousands of potential buyers that are searching online, specifically, for three or four bedrooms and above.

“You might also make your property seem over-valued as potential buyers will be comparing the price of your bigger abode against someone else’s, which is likely to appear to offer better value due to the reduced number of bedrooms.”

HIPs have been introduced to try to help speed up the home selling process. They provide potential buyers with upfront information on the condition of a home. This information also enables sellers to pre-empt and solve any problems early on.
By Jennifer Lowe

Source: ' What Mortgage '

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