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Hips evasion strategies unlikely to profit vendors

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by Gill Montia

This August’s introduction of Home Information Packs (Hips) as mandatory for anyone selling a four-bedroom home has prompted a reaction amongst vendors seeking to find a loophole in the system.

According to research by Abbey Mortgages, 4.5 million people living in four-bedroom homes would be prepared to market their property as having three bedrooms rather than pay the £400 to £600 cost of Hips.

The majority of those surveyed (82%) would be happy to remarket a fourth bedroom as a study and some estate agents expect the word ‘study’ to become a synonym for a fourth bedroom.

Others respondents would describe a fourth bedroom as follows: playroom (21%), games room (15%), walk in wardrobe (12%), TV room (6%), library (4%) and computer room (3%).

However, the Abbey is warning potential vendors that marketing a property as having a reduced number of bedrooms can have its disadvantages, particularly as 89% of people in the UK now go to the Internet to search for properties, with 73% using the number of bedrooms as a key search criteria.

This can lead to the loss of potential buyers and the likelihood of a lower selling price.

Overall Abbey Mortgages believes that strategies to avoid the cost of Hips are unlikely to be cost effective.

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News posted: August 22, 2007

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1 Comment

  1. HIPs also now applies to 3 bedroom properties, so any such strategy is unlikely to work. Marketing a 3 or 4 bedroom house as a 2 bedroom is likely to lead to a serious undervaluation of the property as well.

    Comment by Brian Turner — August 22, 2007 @ 9:08 am

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