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Millions looking for Hip loopholes

Tuesday, 21 August 2007 12:00 AM

Millions of homeowners are looking for loopholes in government legislation to avoid the cost of a home information pack (Hip), a report by Abbey Mortgage finds today.

Hips are currently mandatory when selling homes with four or more bedrooms and will become compulsory for those selling three-bedroom properties from September 10th.

But up to 4.5 million four-bedroom homeowners are looking to exploit a loophole in the scheme by marketing their property as having three-bedrooms - and describing the fourth as something else.

According to Abbey the most popular method to market a fourth bedroom is as a study, with 82 per cent of respondents choosing this method.

Playrooms (21 per cent), games-rooms (15 per cent) and walk in wardrobes (12 per cent) are also popular choices to describe fourth bedrooms.

However, there could be hidden costs involved in the process.

Describing a property as having three-bedrooms may make it appear overpriced, reducing the chances of making a sale.

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 to filter results, altering the number of bedrooms may reduce the chances of a property being found.

"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," commented Nici Audhlam Gardiner, head of mortgages at Abbey.

"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."

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