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Talk about scrapping Home Reports displays a disturbing misunderstanding

By Keith Jackson

Looking back on the Scottish Parliamentary election campaign it was odd that the Scottish Tory campaign boss should have picked that particular time to announce a plan to scrap Home Reports. Elections do funny things to people, but this was a curious one.

It certainly baffled the journalist from the Edinburgh morning paper, which recorded the policy initiative. The report on the event once again confused the Scottish Home Report with the English Home Information Pack, which has already been abandoned by the Coalition government.

But this misunderstanding aside – and surveyors are becoming resigned to the fact that many journalists seem to have great difficulty reporting the difference – the timing of the announcement by David McLetchie, head of the Conservative Holyrood campaign, was a puzzle.

Because for most people – both housing professionals and home buyers and sellers – the arguments about the Home Report are essentially over.

Property professionals, including surveyors, had their own misgivings before they were introduced. Now, almost two and a half years on, the consensus is that they are working immeasurably better than anyone anticipated and that they have brought much needed stability to a market which was teetering on the verge of collapse.

It was particularly odd that Mr McLetchie should call the Home Report system an “expensive luxury”. Critics highlighting the issue of unwarranted expense should cast their minds back to the system that Home Reports replaced.

Then, every buyer who was seriously interested in a single property had to commission a survey, which was money wasted in the event of an unsuccessful offer. These multiple surveys could run into thousands of pounds in a competitive market.

Scrapping Home Reports now, would by default see a return of multiple surveys. In order to comply with EU Regulations, the Energy Performance Certificate (EPC), an integral part of the Home Report, would still need to be carried out by a surveyor before the property could go on the market. This would be in addition to surveys and valuations being required by buyers and lenders.

By contrast, the seller now pays for the Home Report, which is made freely available to all interested parties. Market forces have dictated that fees are competitive and the surveying industry has come up with solutions to allow sellers to spread the cost of their Home Report if required.

Home Reports have also been an invaluable tool for taking the heat and the hype out of what, before the recession, was becoming a dangerously over-excited market. The report deals in hard, objective facts and its very objectivity has been a vital factor in crystallising views on value.

Previously the property would go on the market at an “offers over” price which, in a competitive situation, could lead to quite remarkable premiums.

Now agents are marketing houses at “offers around” or “offers in the region of” and people are buying and selling much more strictly in line with the surveyor’s valuation, which has helped create more sustainable, long-term growth based on concrete evidence. This is exactly what the market had been crying out for.

Because of the objective and comprehensive nature of the reports, buyers have a new found confidence that they are approaching what is often the biggest purchase of their lives with all the information they need to make an informed decision.

Furthermore, and contrary to some recent discussion, more sellers are attending to urgent repairs highlighted by the surveyor prior to presenting their property to market. This aids the seller’s sale prospects and gives the buyer peace of mind.

Some reports have obliquely suggested that Home Reports have increased house prices as a consequence of surveyors artificially inflating opinions of value. This is simply fanciful and displays a fundamental misunderstanding of the parameters under which the profession operates.

Surveying is a highly regulated arena with robust complaint procedures including provision for arbitration and an Ombudsman Scheme. Surveyors’ valuations are regularly audited by lenders and have to be justified by relevant comparable data, otherwise lenders’ panel appointments are at risk.

There has been much hype regarding lenders not accepting reports. However, in our experience this has not been a problem, provided the seller has instructed a well reputed, local surveyor on lenders’ panel.

The fact is that Home Reports have proved themselves to be an aid rather than a hindrance to successful house sales and have played a significant part in creating a sustainable housing market. Our view is that sellers are accepting them as part of the sales process and that buyers love them.

It is incumbent on anyone who wants to talk about scrapping them now to come up with a pretty spectacular alternative.

Keith Jackson is a partner in the Aberdeen office of DM Hall Chartered Surveyors.

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