It’s difficult to believe but the Home Report is now 12 years-old and, while questions remain about its fairness and effectiveness, it is an indisputable part of the Scottish property sales landscape.
The Home Report may still be going strong, but it continues to be resisted in the rest of the UK.
It may be seen by some as a positive part of the Scottish property sales process, but it has its detractors. So, is it here to stay?
A Home Report is a pack of documents that informs prospective buyers about a property that’s for sale. Anyone selling a home in Scotland needs to provide would-be purchasers with a copy of the document that costs up to £1300 + VAT and includes a single survey, a property questionnaire and an energy report.
Home Reports are not mandatory for private sales but when a property goes on the market, documents must be no more than 12 weeks old.
While there’s no official expiry date, buyers can ask for a ‘refresh survey’ if a home has been on the market for a long time. Mortgage lenders usually insist on the report being less than three months’ old.
Properties that don’t need a Home Report include new builds sold by a developer for the first time, those with commercial use, such as a flat above a shop, and newly converted homes that haven’t been used as a residence before they were converted.
The Home Report was conceived by a Scottish Labour government under Jack McConnell and introduced by the SNP administration under Alex Salmond that succeeded it.
Its introduction couldn’t have come at a worse time, in the aftermath of the 2008 financial crash, when the housing market was in a downward spiral, lenders weren’t lending, and cash was tight.
The main reason for the Home Report being introduced was to bring an end to multiple survey reports being commissioned on the same property.
This made sense to prospective buyers who often had to pay for several surveys when house-hunting before landing a property, although before it was introduced the norm had been to offer ‘subject to survey’ to void this problem.
Ironically, at a time when the housing market was in meltdown, the guaranteed income that the new system provided was a godsend. Used to being paid and instructed only when a property received an offer, they could now charge a fee prior to every home going on the market.
Home reports have also ensured that homeowners maintain their property to a high standard to avoid negative comments and this has impacted positively on sales prices.
In addition, they have factored out much of the guesswork over the vexed question of valuation.
This issue has not been completely resolved and a significant minority of sellers remain worried that the Home Report will undervalue their property.
A 2017 study showed that 19% of sellers feared the Home Report would cause them to lose a sale, with this number increasing to 38% among those aged 16-24. Some 12% were worried about getting a category three rating, meaning that urgent repairs were required.
Only 16% said they had total confidence in the reporting and had no problems whatsoever with the Home Report process. This rose to 27% for those aged 55 and above.
The question of whether the Home Report is a benefit or not, and whether it should be introduced in England and Wales, remains moot.
We’d like to wish the Home Report a happy 12th birthday but also to acknowledge that, while it has brought benefits, it also has some flaws. Whether it enjoys many happy returns remains to be seen.