In the market for a home report

SCOTLAND'S housing market is to undergo one of its biggest changes ever with the introduction of home reports and "single surveys" later this year.

The development will have a major impact on anyone buying or selling a property after 1 December – and the jury is out over whether the effect will be good or bad.

Home information packs (Hips), the equivalent of home reports, were launched south of the Border last year and they are being partly blamed for the slowing down of the housing market because sellers have to go to the expense and effort of preparing the pack before they can put their property on the market.

But unlike Hips, home reports must contain a single survey which gives information on the property, its condition and a valuation. It will also include an energy report and a property questionnaire to be completed by the seller.

After years of consultation, the Scottish Government decided to go ahead with the launch of home reports to make the housing market "fairer, greener and more informed". They must be available for potential buyers within nine days of a property being put on the market.

The idea is that buyers will know more about a property before making their offer and they will not have to get multiple surveys done. It is hoped the reports will encourage homeowners to keep their properties in a decent condition and make them more energy efficient.

But some commentators are not convinced there is a need for home reports and are worried they will lead to a further downturn in the property market.

Ross Mackay, a partner with HBJ Gately Wareing, who sits on the Law Society's conveyancing committee, said: "The problem is that we don't know what will happen to the market and house prices. And there are a number of disadvantages with home reports. For example, the seller's surveyor is not allowed to talk to the buyer. This means if, for example, the home report mentions woodworm or dry rot, the buyer will have to get their own report done to find out the scale of it. The seller is also likely to choose the surveyor who gives the highest valuation, which isn't good for the buyer. Also, the lender may insist on the buyer getting their own valuation.

"The process will be more complicated than the 'subject to survey' offers buyers can give at present."

Another concern is there will be a glut of people trying to sell their houses before home reports are introduced, followed by a sharp fall in the number of properties being marketed.

Ronnie Park, managing director of SPH OneSearch, which currently supplies local authority and water searches for Hips, said: "There was a significant increase in properties coming on to the market before the 1 August implementation of Hips, which was due largely to the negative publicity they received and resulted in homeowners rushing their properties on to the market to avoid paying for a £300 pack.

"I expect the implementation of the home report to be a great deal less troublesome than Hips. In Scotland there is a healthy dialogue between industry and the government, which has allowed a smoother process and has provided a solution that most parties agree will improve home buying for the consumer."

Alongside SPH OneSearch, a number of companies are gearing up for home reports, including Move Machine, part of ESPC, which is already offering Hips in England and Wales.

Derek Lithgow, business development and planning director of Move Machine, said: "There is a concern the number of sellers will reduce significantly. Fewer properties may go on the market if sellers are put off by the cost of preparing a home report – the average cost is likely to be around £600, but it could be as high as £1,000."

To tackle this problem, home report suppliers, such as Move Machine, have devised a set of payment options for people. For example, sellers can defer payment or bundle it together with other marketing costs.

There is also a fear that there could be a shortage of surveyors in Scotland to meet the demand home reports will create.

Lithgow explained: "Only about 10 per cent of buyers currently get the full 'scheme two' survey. Because of this, most surveyors can do about six valuations a day, but they won't be able to do more than about three home report surveys each day. I find it hard to believe there will be enough surveyors."

One of the desired effects of the home report is that the condition of Scotland's housing stock will improve over time, but Lithgow points out that in England and Wales there is no central depository of Hips so there is no way of actually knowing what is wrong with the stock.

And Park warns there are problems with Hips that could be repeated in Scotland.

He said: "Obtaining information from local authorities in England and Wales has been a postcode lottery – some councils are extremely efficient and well prepared and others far less so."

Before commissioning a home report and putting a property on the market, Les Meikle, managing director of Wise Property Care, advises sellers to take a number of precautionary steps to identify any potential problems. He said: "Sellers should have their own 'property health check' to determine how their property is performing with regard to the main items that might influence the sale. They should prioritise which items of disrepair are more critical and carry out work that will attract the best selling price; aim for the house to be as energy efficient as possible and ensure that they have all the relevant planning permissions, building warrants and specialist guarantees available for the selling agent."

Anyone thinking of selling their property from 1 December should be prepared to have a home report ready – whether it will help or hinder buyers and sellers remains to be seen.


A WISE MOVE FOR ONE SELLER

ALTHOUGH home reports do not come in until December, when Archie Galbraith (56) was selling his home in Thorntonhall on the outskirts of Glasgow he decided to get a health check and survey, writes Rosemary Gallagher.

As the five-bedroom detached house was more than 100 years old, he wanted to identify any issues, so potential buyers didn't get any nasty shocks when they got their own survey done.

Galbraith, who was a director of The Saw Centre but retired early due to MS, moved with his wife Alison to another house in Thorntonhall.

Galbraith said: "I was pre-empting home reports and putting myself in the buyer's shoes. It's an old house and I wanted to leave it in a good state and give the buyer confidence in taking on the house.

"I obtained a few quotes and then asked Wise Property Care to do a health check which identified dry rot. The service was excellent – the workers came out on time, did the damp proofing and serviced the rot. The work cost between £2,500 and £3,000 and I then managed to sell the house for more than £300,000

"I would definitely recommend other people do the same if they are selling an older house and I was really impressed by the work carried out by Wise."