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  4. Home reports given positive review – with qualifications

Home reports given positive review – with qualifications

7th January 2015 | property (non-commercial)

A positive overall assessment of the home report is given by the Scottish Government's Five Year Review of the Home Report, published today, though improvements to the format are recommended.

Research carried out also indicates a level of misunderstanding among some buyers and sellers, and a conflict of interest in the commissioning process.

The research explored the awareness, knowledge and understanding of the Home Report, how it has worked in practice and whether it is meeting its original objectives.

It found that awareness of the home report is high, although detailed knowledge is less common. Sellers felt more confident about the property price and buyers found the repair categories and valuation particularly useful, although many did not read the whole home report. Professionals were concerned that buyers see the home report as a guarantee of property condition, which is it not.

The research concludes that the home report has met two of the three original objectives: to reduce multiple surveys and to prevent artificially low asking prices, although the latter objective is likely also to have been influenced by the housing market. The third objective, to improve the condition of the housing stock, is a longer term goal, because the home report only has the potential to influence the condition of properties put up for sale.

It also identified a conflict of interest between the seller, the surveyor and the buyer, which professionals see as inherent in the home report commissioning process. This has two potential impacts: pressure applied, by or on behalf of the seller, on the surveyor to improve the single survey, or sellers commissioning a number of single surveys to pick the highest value survey.

The report makes a number of recommendations:

  • The home report should be shorter, with a one-page summary at the front containing key information on repairs, valuation and a statement of the home report’s purpose and status.
  • More information/guidance on the home report should be made available to buyers and sellers before they begin marketing or searching. This should address all areas of misunderstanding (for example, that it is a visual survey only).
  • The current home report objectives should be retained, and a new objective be considered that makes the energy improvement requirements clearer.
  • The Scottish Government should reconvene the Home Report Implementation Group, inviting representatives from all relevant professions and stakeholders to attend, in order to address the conflict of interest in the current system and other issues raised by the review.

Housing Minister Margaret Burgess said: “This research demonstrates a recognition among buyers and sellers that the home report is working well and is improving confidence in the property market. It contains evidence that sellers are more confident about their property price and that the home report gives them a helpful ‘reality check’ on the condition of their property.

“The research also highlights a feeling from some industry professionals that buyers don’t always fully understand the scope and status of the home report. We will now consider the research’s recommendations within our five year review, including looking at whether to make the home report shorter, with a one-page summary at the front containing all key information, and if more guidance could be given to sellers and buyers before they begin marketing or looking for homes.”
 

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