Millions of homeowners are exploiting a loophole in the HIPs system in order to avoid purchasing them, but this could damage their house’s saleability, Abbey has warned.
Increasingly, fourth bedrooms are being described as other rooms to dodge the four-bed catchment of buying mandatory Home Information Packs, which will also be compulsory for houses with three or more bedrooms from 10 September.
To give HIPs the slip, 4.5 million homeowners said that they would market their four bedroom home as a three-bed and describe the fourth bedroom as something else – most commonly a study, with 82% saying they would describe it as such. Twenty one per cent said playroom, 15% a games room, and other inventive descriptions included a walk in wardrobe, TV room, library, games room and computer room.
The word ‘study’, Abbey predicts, could come to be known as a fourth bedroom, and when three bedroom houses are included it could also become synonymous with a third bedroom.
While this might seem like a good plan to homeowners trying to escape buying HIPs, Abbey warns of the possible detrimental affects that this false marketing could have on the saleability of homes. They point to the loss of potential buyers looking for a four bedroom house.
The role of the internet in sourcing new homes should also be taken into account, as 89% of Britons are now using the web to filter out unsuitable homes and 73% use the number of bedrooms as a primary criterion.
Nici Audhlam Gardiner, Head of Mortgages at Abbey, commented: “While HIPs might seem a hassle we think it would pay in the long run to play it 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.”
Home Information Packs are intended to make the buying and selling process clearer and to provide buyers with key information, such as services, boundaries, the condition of the property and planning permissions in the area. HIPs also include an Energy Performance Certificate, documenting the efficiency of the home.
Learn more about Home Information Packs for buyers
and Home Information Packs for sellers