IN YOUR school days it was the report card, in your working life it is an annual appraisal and for a car it is the MOT.
These are all standard reports that look at what has gone well and what requires attention. From December 1, 2008, any house being marketed for sale in Scotland will have their own standard report, the home report, which does the same thing. This is the single biggest change to the Scottish housing market in decades.
The Scottish Government is introducing home reports primarily in an effort to encourage a fairer and greener housing market by providing potential buyers with professional information about the condition and value of a home before they decide to make an offer.
For most people, buying a property is the largest investment they will ever make and by providing key information up front, the Government aims to make this a more informed decision, while at the same time improving the Scottish housing stock.
The home report will contain three documents, with the idea being that these should combine to form a useful tool for buying and selling houses.
First, the property questionnaire will have to be completed by the seller and/or the seller's agent. It will contain lots of useful information that will be of interest to prospective buyers, including, for example, the council tax band, factoring arrangements and parking facilities.
Second, the single survey is perhaps the most widely recognised and debated element. Carried out by a surveyor, this details the condition of the home and will include a valuation and an accessibility audit for people with particular needs. The inclusion of a valuation in the single survey may mean that multiple surveys are not required and this should save buyers considerable sums. However, it remains to be seen if mortgage lenders will accept a valuation commissioned by a seller or if they will still demand their own valuation. Lenders' acceptance is likely to depend on the specific scenario and the general market lending conditions pervasive at that time.
Finally, the energy report contains another assessment conducted by the surveyor on the energy efficiency of the home and its environmental impact.
Some commentators have questioned the timing of the introduction of home reports as the property market is already slow at that time of year. However, I believe it is actually a very sensible time to introduce home reports. December is always a quieter time in the housing sector, with fewer properties coming onto the market. This will allow property professionals and sellers alike a period of acclimatisation.
There is speculation that the introduction of home reports will lead to more of a downturn in the market, but I think this is unlikely. The timing of their introduction is well thought out and as the report contains information that is not only important, but also interesting, it is likely that they will be well received by buyers. To some extent this is where the home information pack (HIP) in England has suffered some bad press. The contents of a HIP are not as immediately relevant to the buyer when considering their offer. A potential buyer will want to read the home report.
Also, the Scottish market is withstanding the current climate better than England and Wales and is expected to remain relatively robust. This all indicates that the market will cope with the introduction of home reports.
Derek Lithgow is business development and planning director for MoveMachine, a property services business. www.movemachine.com
Before you put up the for sale sign…
1. Home reports will be introduced on December 1, 2008.
2. The seller will commission the report.
3. It will contain three documents: a property questionnaire, a single survey and an energy report.
4. The property questionnaire will be completed by the seller, their estate agent or their solicitor.
5. A surveyor will complete the single survey that includes a valuation and the energy report.
6. A home report must be prepared before a house can be marketed for sale.
7. If requested, a copy of the home report must be provided to a prospective buyer within nine days.
8. The home report should be in written format, unless the prospective buyer agrees to receive an electronic version.
9. If a home is advertised for sale before December 1, 2008, a home report will not be required.
10. The report will cost 300–1,000.