Consultation on the Home Report - Analysis of Responses

3 How the Home Report is Working

3.1 The second section of the consultation sought views on how the Home Report is working, looking at different stages of the process including costs, commissioning, production, marketing, timescales, access, enforcement, access to mortgage finance, redress and exceptions.

Cost and commissioning

3.2 Questions 5-8 looked at costs and commissioning. The consultation document notes that the costs of surveys are set by the market and usually increase with the value of the property.

Question 5: Do you think the upfront cost of Home Reports is preventing potential sellers from putting their property onto the market?

3.3 The balance of opinion on whether upfront costs are preventing potential sellers from putting their property of the market is set out in Table 6 below.

Table 6: Question 5 - Response by Respondent Type

Respondent Type	Yes	No	N/A	Total
Chartered Surveyors	1	8	-	9
Construction Industry	1	-	2	3
Consumer, Advice & Campaign Groups	1	-	4	5
Legal Profession and Estate Agencies	6	1	1	8
Local Authorities, including Trading Standards	1	5	1	7
Property Management, Maintenance and Conservation	3	3	1	7
Other	-	4	4	8
Individuals	21	60	16	97
TOTAL	34	81	29	144
Percentage	24%	56%	20%	100%
Percentage of those responding	30%	70%	-	100%

3.4 A clear majority of respondents (70% or 81 of the 115 respondents who answered this question), did not think that upfront costs are preventing potential sellers from putting their property on the market. Legal Profession and Estate Agent Respondents were the only type of respondent in which the majority thought upfront costs could be having this effect.

3.5 Only a relatively small proportion of respondents went on to make a further comment on this issue, including only 17 group respondents. Respondents who did comment, and who thought upfront costs are preventing potential sellers from putting their property on the market raised the following issues:

• Even if it is having that effect, it is likely to be only a marginal consideration.
• The costs may be deterring those who are not desperate to move but who might otherwise be tempted to 'test the market'.
• This may be a bigger issue in a poor housing market and particularly if people need to sell because of financial problems. People may simply not have the money to pay upfront charges and/or if people are not confident they will be able to sell, they may not be in a position to 'risk' the charges.
• Home Reports can be expensive, even compared with a full surveyor's report under the pre-Home Report regime.^[6]
• It may be an issue for a small number of empty home owners.

3.6 Finally, a small number of respondents (including some Legal Profession and Estate Agent Respondents), reported having direct experience of this problem, with Legal Profession and Estate Agent Respondents sometimes reporting it as a frequent problem and as directly linked to the economic downturn. One respondent reported that the upfront costs of obtaining a Home Report undoubtedly prevented many home owners from putting their property on the market, and almost certainly resulted in the rise in repossessions and bankruptcies which occurred over that period.

3.7 A small number of Individual Respondents referred to their own experiences, including having been unable or reluctant to incur the costs associated with putting their property on the market.

Question 6: Are you aware of any schemes available (e.g. deferred payment) to help potential sellers to pay for Home Reports?

3.8 Respondents' responses at Question 6 are set out in Table 7 below.

Table 7: Question 6 - Response by Respondent Type

Respondent Type	Yes	No	N/A	Total
Chartered Surveyors	7	2	-	9
Construction Industry	-	1	2	3
Consumer, Advice & Campaign Groups	-	1	4	5
Legal Profession and Estate Agencies	7	-	1	8
Local Authorities, including Trading Standards	1	5	1	7
Property Management, Maintenance and Conservation	1	5	1	7
Other	1	2	5	8
Individuals	55	27	15	97
TOTAL	72	43	29	144
Percentage	50%	30%	20%	100%
Percentage of those responding	63%	37%	-	100%

3.9 The majority of respondents (63% or 72 of the 115 respondents that answered this question), were aware of schemes to help potential buyers pay for their Home Report. Only a small proportion of respondents went on to make further comments. However, a small number of Chartered Surveyor or Legal Profession and Estate Agent Respondents noted that some firms offer deferred payment plans. However, some problems with such schemes were reported, including lack of demand, high levels of bad debt and high costs for sellers.

3.10 It was also suggested that some schemes have been removed from the market place and that with lenders shying away from providing such a service the options are limited.

3.11 Other options that were highlighted included: discounted Home Report rates; tailored payment plans; and charging for Home Reports only on completion of the sale and from its proceeds.

Question 7: Are there any issues with the majority of Home Reports being commissioned through selling agents?

3.12 The consultation document notes that although a Home Report can be commissioned directly from a surveying company or through a selling agent, in practice the majority of sellers usually commission their Home Report through a selling agent. Respondents' views on whether there are any issues with the majority of Home Reports being commissioned through selling agents are set out in Table 8 below.

Table 8: Question 7 - Response by Respondent Type

Respondent Type	Yes	No	Mixed	N/A	Total
Chartered Surveyors	3	5	-	1	9
Construction Industry	-	1	-	2	3
Consumer, Advice & Campaign Groups	-	1	-	4	5
Legal Profession and Estate Agencies	3	4	-	1	8
Local Authorities, including Trading Standards	2	3	1	1	7
Property Management, Maintenance and Conservation	5	1	-	1	7
Other	3	1	-	4	8
Individuals	54	25	1	17	97
TOTAL	70	41	2	31	144
Percentage	49%	28%	1%	22%	100%
Percentage of those responding	62%	36%	2%	-	100%

3.13 The majority of respondents (62% or 70 of the 113 who answered this question), did think there are issues with the majority of Home Reports being commissioned through selling agents. Individual Respondents were particularly likely to think there are issues, and Property Management and Other Respondents were also likely to have concerns. The remaining categories of respondent tended to be more evenly divided on the subject.

3.14 The principal concerns of many respondents were lack of transparency and actual or perceived conflict of interest, particularly with regard to the relationship between selling agents and chartered surveyors. Specific points raised were:

• Selling agent and surveying firms are sometimes owned by the same parent company. However, this relationship may not be made clear to buyers or sellers.
• Hidden costs are sometimes added by selling agents and represented to sellers as part of the survey fee.
• One Trading Standards Respondent reported having receiving complaints which suggest that some lenders are only accepting Home Reports from surveyors or bodies who are on a list of approved suppliers. This respondent was amongst those suggesting that the way the current system is operating restricts both competition and consumer choice.
• The impact of any conflict of interest is most likely to be with regard to valuations. For example, one Legal Profession Respondent suggested there is anecdotal evidence of selling agents advising sellers that they can arrange for a favourable Home Report valuation. It was also suggested that surveying firms may not be in a position to 'upset' selling agents that direct a significant amount of work to their firm and that this too may affect valuations.

3.15 A number of Individual Respondents were amongst those suggesting that these issues have resulted in Home Reports being distrusted by buyers and those lending to them. Specifically, one Legal Profession Respondent considered that while the property is being marketed at least, surveyors are acting on behalf of the seller and that only when a person actually becomes the purchaser of a particular property will the surveyor answer questions relating to the Home Report. This respondent went on to note that by that time, the buyer is already contracted to purchase.

3.16 Suggested ways forward included:

• Only the seller should be able to instruct and pay for a Home Report. Direct commissioning would build the relationship between the chartered surveyor and the seller and would allow for any questions the seller has to be dealt with directly by a professional who understands building and valuation methodologies.
• There should be a nationally approved panel of accredited surveyors. This panel should be available for review by a seller who should nominate the company they wish to prepare their Home Report.
• There may be a case for preventing selling agents from instructing in-house surveyors to carry out the Home Report.
• There should be a clear and explicit statement on all Home Reports declaring any connection between the selling agent and the chartered surveying firm.
• The cost of a Home Report should be in the public domain.
• Legislation should address any issues with lenders operating 'approved surveyor' lists.
• There should be a public record of the relationship between valuation and sale price achieved.

Production of the Home Report and marketing a property

3.17 At present, the Single Survey, including the valuation, and the Energy Report elements of the Home Report must be completed by a surveyor registered with or authorised to practice by RICS. Since the Home Report is required before a property can be put on the market, it may be that it takes slightly longer to reach that stage.

Question 8: Should other organisations be allowed to carry out the Single Survey (including valuation) and/or Energy Report? If yes, what other organisations and why?

3.18 Respondents' views on whether other organisations should be allowed to carry out the Single Survey (including valuation) and/or Energy Report are set out in Table 9 below.

Table 9: Question 8 - Response by Respondent Type

Respondent Type	Yes	No	Mixed	N/A	Total
Chartered Surveyors	1*	7	1	-	9
Construction Industry	-	-	-	3	3
Consumer, Advice & Campaign Groups	-	1	-	4	5
Legal Profession and Estate Agencies	-	6	-	2	8
Local Authorities, including Trading Standards	2	4	-	1	7
Property Management, Maintenance and Conservation	3	3	-	1	7
Other	-	3	-	5	8
Individuals	13	70	-	14	97
TOTAL	19	94	1	30	144
Percentage	13%	65%	1%	21%	100%
Percentage of those responding	17%	82%	1%	-	100%

* The further comments made by this respondent suggest that they did not support any change and may have selected the wrong option to the quantitative question.

3.19 A substantial majority of respondents (82% or 94 of the 114 respondents who answered this question), did not believe that other organisations should be allowed to carry out the Single Survey (including valuation) and/or Energy Report. Only 19 respondents, the majority of whom were Individuals, supported a change.

3.20 Relatively few respondents made a further comment at this question. However, suggestions as to other organisations that could carry out Home Reports included the following:

• Any qualified and nationally approved surveyors.
• Members of a range of other building-related professional bodies. Specific suggestions included those who are members of the professional bodies for architects, structural engineers and the building industry.
• Organisations which provide factoring services.
• Energy qualified assessors should be able to carry out EPCs or Energy Reports, but not the Single Survey element of the Home Report.
• There may be a case for allowing independent access auditors to carry out the accessibility audit.

3.21 Other issues raised by respondents included that the integrity of the Home Report, and the valuation in particular, must not be undermined. In their own response, RICS pointed out that their members are amongst the most highly regulated professionals in the UK and that this - along with a range of other factors such as Continuous Professional Development requirements, the requirement to have appropriate insurances in place and the need to adhere to RICS' own strict rules of conduct - means they are the only individual professionals who have all the necessary attributes to undertake Home Reports.

3.22 A specific concern was about how lenders could respond to surveys conducted by non-RICS members. In particular, it was suggested that if lenders did not have confidence in such surveys and in the valuation element especially, they could decide to instruct additional mortgage-related valuations from approved valuers.

Question 9: In your experience is the requirement for a Home Report before marketing a property leading to delays in properties coming onto the market?

3.23 Respondents' views on whether the requirement for a Home Report before marketing a property is leading to delays in properties coming on to the market are set out in Table 10 below.

Table 10: Question 9 - Response by Respondent Type

Respondent Type	Yes	No	Mixed	N/A	Total
Chartered Surveyors	1	8	-	-	9
Construction Industry	1	-	-	2	3
Consumer, Advice & Campaign Groups	-	1	-	4	5
Legal Profession and Estate Agencies	6	1	-	1	8
Local Authorities, including Trading Standards	1	4	1	1	7
Property Management, Maintenance and Conservation	2	4	-	1	7
Other	1	2	1	4	8
Individuals	21	59	-	17	97
TOTAL	33	79	2	30	144
Percentage	23%	55%	1%	21%	100%
Percentage of those responding	29%	69%	2%	-	100%

3.24 Only a minority of respondents thought there are delays, with a clear majority (69% or 79 of the 114 respondents who answered this question), considering that the requirement for a Home Report is not leading to delays in marketing properties. The Legal Profession and Estate Agents category of respondents was the only one in which a majority of respondents did think delays were occurring.

3.25 Relatively few respondents went on to make further comments at this question. Those commenting included a small number of Individual Respondents who outlined delays that occurred when they themselves had been wishing to market a property. These included problems: relating to the Information Technology associated with completing the Property Questionnaire; with arranging to be at the property to allow a surveyor access; and with solicitors or estate agents making their required contribution.

3.26 Other issues raised by respondents who did think delays were occurring included the following:

• The processes required, particularly in relation to pulling together the necessary information, inevitably take some time if carried out to a high standard.
• Given this, any selling agent of good standing will not market a property until the Home Report has reach the approved draft stage. To do otherwise would risk not being able to meet the 9 day request rule (this issue is discussed further below at Question 13).
• Specific aspects of the production of a Home Report that were identified as causing delays included the instruction of a surveyor, the seller's completion of the Property Questionnaire, the checking of the draft Home Report and sellers 'negotiating' the content of the draft with unscrupulous surveyors.
• The seller's requirement to cover upfront expenses may also cause delays.
• Delays may be happening but if so they are either minor or are only affecting a small number of empty homes.
• The implications of any delays can be considerable, particularly if the owner needs to sell to alleviate financial difficulties.
• Delays in being able to market their own house can mean prospective buyers miss out on the opportunity to make a bid on another property. Overall, this could have a detrimental effect on the housing market and could become a bigger issue in a rising market.

Question 10: Are Home Reports a useful marketing tool for sellers?

3.27 Respondents' views on whether Home Reports are a useful marketing tool for sellers are set out in Table 11 below.

Table 11: Question 10 - Response by Respondent Type

Respondent Type	Yes	No	Mixed	N/A	Total
Chartered Surveyors	9	-	-	-	9
Construction Industry	1	-	1	1	3
Consumer, Advice & Campaign Groups	2	-	-	3	5
Legal Profession and Estate Agencies	2	5	-	1	8
Local Authorities, including Trading Standards	6	-	-	1	7
Property Management, Maintenance and Conservation	6	-	-	1	7
Other	3	-	-	5	8
Individuals	62	21	1	13	97
TOTAL	91	26	2	25	144
Percentage	63%	18%	1%	17%	100%
Percentage of those responding	76%	22%	2%	-	100%

3.28 A clear majority of respondents (76% or 91 of the 119 respondents who answered this question), thought Home Reports are a useful marketing tool for sellers. Legal Profession and Estate Agent Respondents were the only category in which the majority did not think this was the case.

3.29 In terms of how the Home Report proves useful, respondents tended to point to homeowners having the opportunity to rectify any urgent repairs issues before marketing their property and hence address possible barriers to a sale. It was also noted that being able to highlight that a property has been well maintained is of benefit to the conscientious property owner.

3.30 Other features of the Home Report that were highlighted were the benefits of:

• Including a realistic valuation.
• Being able to highlight the energy efficiency of certain properties.
• Having the opportunity to draw attention to any unique features of the home.
• Being able to include information or explanation about any aspects that could cause a prospective buyer concern.
• The inclusion of accessibility information, particularly given that some selling agents were wary of highlighting this issue in the past.

3.31 Two Chartered Surveyor Respondents also noted that there are occasions on which sellers of properties which do not require a Home Report (new build or Right to Buy properties for example), will commission a Home Report as they see value in being able to make it available to prospective buyers. Similarly, one Construction Industry Respondent reported that early evidence from their own research suggests that around 96% of prospective buyers go straight to the condition-related component of any Home Report. Other comments also pointed to the value that prospective buyers place on accessing a Home Report, such as the ability to make comparisons between properties, and that this in turn is positive for sellers if it helps them secure a sale.

3.32 However, a small number of other respondents suggested that while Home Reports may have value, that value is very much dependent on them offering an accurate picture of the condition and value of the property. In this context, the value of the Property Questionnaire was raised, and it was suggested that buyers see it as of little value, particularly given the number of times 'don't know' or 'unknown' may feature. It was also suggested that many buyers do not read them and/or have more interest in marketing particulars. One Estate Agent Respondent pointed to the results of an online survey they had undertaken with sellers, according to which only 36% of sellers believed the Home Report was helpful to them. However, they also noted that 64% of buyers reported finding the Home Report helpful.

3.33 Finally, one Finance Industry Respondent suggested that a balance needs to be struck between allowing the Home Report to be used as a marketing tool for sellers and it being viewed as an independent source of information by buyers. This respondent suggested that the Home Report should be an impartial presentation of the facts, with marketing left to selling agents.

Timescales

3.34 A Home Report must be no more than 12 weeks old when the property is put on the market and once on the market there is no time limit for a Home Report provided the property remains on the market. A seller can take their property off the market for no more than 28 days on any number of occasions and put it back on the market without requiring a new Home Report.

Question 11: Is the 12 week deadline for marketing a property after completion of a Home Report appropriate and reasonable?

3.35 Question 11 asked respondents whether they thought the 12 weeks deadline for marketing the property after completion of the Home Report was reasonable and appropriate. The balance of views on this issue is set out in Table 12 below.

Table 12: Question 11 - Response by Respondent Type

Respondent Type	Yes	No	Mixed	N/A	Total
Chartered Surveyors	8	1	-	-	9
Construction Industry	-	-	-	3	3
Consumer, Advice & Campaign Groups	1	-	-	4	5
Legal Profession and Estate Agencies	4	3	-	1	8
Local Authorities, including Trading Standards	4	1	-	2	7
Property Management, Maintenance and Conservation	2	4	-	1	7
Other	2	-	1	5	8
Individuals	59	25	-	13	97
TOTAL	80	34	1	29	144
Percentage	56%	24%	1%	20%	100%
Percentage of those responding	70%	30%	1%	-	100%

3.36 A clear majority of respondents (70% or 80 of the 115 respondents who answered this question), considered the 12 week deadline to be appropriate and reasonable. Property Management, Maintenance and Conservation Respondents were the only category of respondent in which the majority did not agree the 12 week deadline was reasonable.

3.37 Respondents who supported the current arrangements sometimes pointed out that the 12 week period ensures the Home Report remains current and also highlighted a range of strengths or benefits that come with the current timescales:

• Sellers have time to carry out maintenance or repair work identified by the Report before putting the property on the market.
• Setting a deadline helps sellers focus and get their property on the market.

3.38 However, 30% of those who answered this question did have concerns about the 12 week deadline, with any further comments made by these respondents suggesting that the substantial majority of them considered the period to be too short. This was sometimes connected with either the time required to get any repairs completed or simply with the time properties take to sell in a slow housing market.

3.39 However, a small number did suggest 12 weeks is too long and generally focused on the potential for the market to fluctuate and change considerably over that period, potentially rendering the valuation element of the Home Report out of date. It was also noted that the condition of a property and of the external fabric in particular, could change over a relatively short time and especially over the winter months.

3.40 Suggested changes to the current approach that were proposed included:

• If the Home Report is not 'signed off' within the 12 week period then the property should be re-inspected at a fee and a revised draft Home Report provided.
• Any repair or improvement work carried out after the Home Report's production could be evidenced by estimates and receipts being added. The Condition Report could then be valid for a number of years rather than needing to be repeated if the 12 week marketing deadline is not met.

Question 12: Is the 28 day provision for removing a property from the market without requiring a new Home Report appropriate and reasonable?

3.41 Question 12 considered the reasonableness of the 28 day provision, with the balance of opinion on this issue set out in Table 13 below.

Table 13: Question 12 - Response by Respondent Type

Respondent Type	Yes	No	Mixed	N/A	Total
Chartered Surveyors	7	2	-	-	9
Construction Industry	-	-	-	3	3
Consumer, Advice & Campaign Groups	1	-	-	4	5
Legal Profession and Estate Agencies	3	4	-	1	8
Local Authorities, including Trading Standards	3	2	-	2	7
Property Management, Maintenance and Conservation	3	-	-	4	7
Other	2	-	-	6	8
Individuals	54	22	2	19	97
TOTAL	73	30	2	39	144
Percentage	51%	21%	1%	27%	100%
Percentage of those responding	70%	29%	2%	-	100%

3.42 As with the 12 week rule, a clear majority of respondents (70% or 73 of the 105 respondents who answered this question), supported the 28 day rule. Legal Profession and Estate Agent Respondents were the only respondent category in which the majority did not consider the current arrangements to be reasonable and appropriate.

3.43 In their further comments a number of respondents highlighted the range of valid reasons - such as illness or taking a holiday - why any seller might need or want to temporarily remove their property from the market and that they should not be penalised or incur further cost as a result.

3.44 It was also noted that the 28 day period allows a property to be removed while an offer is being concluded and a potential buyer is arranging the necessary finance, but still allows the seller to return to the market if the sale is not completed.

3.45 However, some respondents considered the 28 day rule to be a meaningless provision or suggested that since the date of the Home Report is shown it should not matter to buyers if sellers have taken a longer break from marketing their property. A number of others, including some Individual Respondents, suggested there may be a case for extending the period, either in general or under specific circumstances. Suggestions included:

• If the homeowner is unwell.
• If the owner needs to move out of the property or has a major change in life circumstances such as bereavement or a change of employment.
• If a sale is being progressed through solicitors but does not complete.

Access to the Home Report

3.46 A Home Report must be given to a potential buyer within 9 days of them asking for it. However, there are circumstances under which a seller or selling agent can refuse a request - for example, if they think someone is not genuinely interested in buying the house or does not have enough money to buy it.

Question 13: Are there any issues with potential buyers accessing Home Reports?

3.47 Question 13 asked respondents if they consider there to be any issues with potential buyers accessing Home Reports. The balance of opinion on this issue is set out in Table 14 below.

Table 14: Question 13 - Response by Respondent Type

Respondent Type	Yes	No	Mixed	N/A	Total
Chartered Surveyors	3	5	1	-	9
Construction Industry	1	-	-	2	3
Consumer, Advice & Campaign Groups	-	1	-	4	5
Legal Profession and Estate Agencies	1	6	-	1	8
Local Authorities, including Trading Standards	3	2	-	2	7
Property Management, Maintenance and Conservation	1	5	-	1	7
Other	-	4	-	4	8
Individuals	10	71	2	14	97
TOTAL	19	94	3	28	144
Percentage	13%	65%	2%	19%	100%
Percentage of those responding	16%	81%	3%	-	100%

3.48 A clear majority of respondents (81% or 94 of the 116 respondents who answered this question), did not think there were any issues with potential buyers accessing Home Reports.

3.49 Relatively few respondents went on to make a further comment at this question. Points that were raised tended to focus on the challenges associated with obtaining a Home Report, particularly prior to viewing a property. Specific points made included the following:

• Some selling agents may impose restrictions on how potential buyers can access Home Reports. Examples given included selling agents refusing to send Home Reports to personal email addresses or only through an instructed solicitor. It was also suggested making Home Reports difficult to access is sometimes used as a sales technique for signing up new customers.
• Some selling agents only provide potential buyers with the Single Survey. Some also redact or reduce Home Reports for lending purposes. The Chartered Surveyor Respondent raising this issue went on to suggest that anybody with an interest in the property, including lenders, should have access to the Home Report in its whole terms.
• Some solicitors will only release the Home Report after a prospective buyer has made an offer.
• Making Home Reports easily available, including outwith standard working hours, would be helpful. A centrally held register of Home Reports could allow quick and easy access.
• Buyers are often expected to access the Home Report online and not all buyers may have access to the necessary technology.
• There is anecdotal evidence to suggest that properties are occasionally being marketed before the Home Report is available at all and that this is particularly prevalent in the property auction sector.

3.50 Finally, one Individual Respondent suggested that Home Reports may be too easy to access and in fact provide anyone with information about a property even if they have no serious intention of trying to buy it.

Enforcement of the Home Report

3.51 Local Authority Trading Standards officers are responsible for enforcing the Home Report legislation. Their powers include being able to require the person responsible for marketing the property to produce the Home Report for inspection. They can also issue a penalty of £500 if a property is marketed without a Home Report.

Question 14: Is this the most appropriate way to enforce Home Report legislation?

3.52 Question 14 asked respondents whether they thought the current arrangements are appropriate and the balance of opinion is set out in Table 15 below.

Table 15: Question 14 - Response by Respondent Type

Respondent Type	Yes	No	N/A	Total
Chartered Surveyors	6	3	-	9
Construction Industry	-	-	3	3
Consumer, Advice & Campaign Groups	1	-	4	5
Legal Profession and Estate Agencies	2	4	2	8
Local Authorities, including Trading Standards	3	-	4	7
Property Management, Maintenance and Conservation	4	1	2	7
Other	3	-	5	8
Individuals	60	18	19	97
TOTAL	79	26	39	144
Percentage	55%	18%	27%	100%
Percentage of those responding	75%	25%	-	100%

3.53 The majority of respondents (75% or 79 of the 105 respondents who answered this question), thought the current arrangements represent the most appropriate way to enforce the Home Report legislation. Legal Profession and Estate Agent Respondents were the only respondent category in which the majority did not support the current arrangements.

3.54 Limited further comments were made, with some respondents simply stating their agreement with the role taken by Trading Standards. However, a number of Individual Respondents referred to a lack of enforcement activity or suggested that Trading Standards need to be more vigilant and proactive in their compliance checks. A specific suggestion was that Trading Standards should undertake audit checks of selling agents.

3.55 Some other issues raised about the current arrangements were:

• The rules which allow a Home Report to be withheld if the selling agent believes the enquirer is "unlikely to have enough money to buy the house; is not genuinely interested in buying the house; or is not someone the seller wants to sell the house to" are highly subjective and it is not clear how Trading Standards could enforce them.
• The £500 penalty for failing to obtain a Home Report is inadequate and should be increased in order to increase the incentive to conform to legislation.
• It is not clear that Trading Standards have the necessary resources to police the implementation of the Home Report legislation.

Access to mortgage finance

3.56 A valuation was included in the Home Report to stop the practice of sellers setting unrealistic asking prices. As the consultation document notes, it was never intended for the Home Report to guarantee mortgage finance, although all major lenders in Scotland took the position that the valuation was acceptable provided it met their criteria around timescales and the surveyor being on the lender's panel of approved surveyors.

3.57 Question 15 asked respondents for their views on this issue and was the only question that asked for comment only (i.e. did not ask a 'yes' or 'no' question).

Question 15: What are your views on mortgage lenders' acceptance of Home Report valuations?

3.58 A number of group respondents outlined their understanding of current practice amongst lenders, although that understanding was quite varied. At one end of the spectrum, some respondents suggested that the majority of lenders accept the Single Survey valuation, some suggested lenders accept a generic Mortgage Valuation Report (MVR)^[7], whilst at the other end of the spectrum, it was suggested that many lenders are not prepared to accept these valuations at all. A number of respondents noted that lenders will only accept valuations carried out by a firm on their approved panel list, although it was often not clear whether they were referring to the Single Survey valuation and/or the generic MVR. It was also suggested that lenders' policy on which valuations they will accept may vary according to the level of loan to value.

3.59 Concerns raised included that lenders are attempting to undermine the consumer benefits of the Home Reports, including through restrictive practices such as the use of panels or by putting single supplier arrangements in place. Two Legal Profession and Estate Agency Respondents suggested that despite running panels, some lenders may still refuse to accept valuations provided by firms on their own approved surveyors panel.

3.60 Other issues identified included:

• There is considerable variation in policy between lenders.
• Lenders regularly change their policies and issue new regulations. Changes may relate to whether they will accept the valuations at all, whether they will accept a 'refresh', or the basis on which they will decide whether a Home Report is valid.
• There has been a lack of understanding of the system amongst lenders, and English lenders in particular.
• Given some of the other issues with Home Reports - such as valuers having a possible conflict of interest (as discussed at Question 7 above) it is unsurprising that lenders may not accept valuations at face value.

3.61 Some respondents highlighted how some of the issues raised above are impacting on buyers and sellers of properties. For example, it was suggested 'subject to survey' offers remain common place, that lead-in periods to date of entry are lengthening and that deals may even fall through because of the length of time lenders are taking to process the mortgage application. The potential additional costs to both buyer and seller which can result from these problems were also highlighted. There were also concerns that any existing problems may be exacerbated in a rising market in which property values may change quickly.

3.62 In terms of the approach going forward, the following issues were raised:

• One Chartered Surveyor Respondent identified a range of reasons (such as ongoing training and a strict mandatory set of valuation standards), why lenders should accept valuations carried out by RICS members. Other respondents also suggested that a lender should not be able to reject the Home Report valuation simply because the otherwise qualified valuer was not on their approved panel or list. One Local Authority Respondent suggested a nationally approved list of surveyors could offer one way round this problem.
• Another Chartered Surveyor Respondent pointed to an independent report^[8] which advised that a lender should cover the costs should it wish to commission its own additional valuation of a property.

Redress

3.63 The content of the Single Survey and Energy Report are covered by a surveyor's professional standards. If a buyer has concerns about their content these should first be raised with the surveying company and then, if necessary, with the Ombudsman Service.

Question 16: Are the redress options available to buyers reasonable and appropriate?

3.64 Question 16 asked respondents if they consider these arrangements to be reasonable and appropriate. The balance of views given is set out in Table 16 below.

Table 16: Question 16 - Response by Respondent Type

Respondent Type	Yes	No	Mixed	N/A	Total
Chartered Surveyors	7	1	-	1	9
Construction Industry	-	-	-	3	3
Consumer, Advice & Campaign Groups	1	-	-	4	5
Legal Profession and Estate Agencies	3	4	-	1	8
Local Authorities, including Trading Standards	3	2	-	2	7
Property Management, Maintenance and Conservation	4	2	-	1	7
Other	2	-	1	5	8
Individuals	59	20	-	18	97
TOTAL	79	29	1	35	144
Percentage	55%	20%	1%	24%	100%
Percentage of those responding	72%	27%	1%	-	100%

3.65 The majority of respondents (72% or 79 of the 109 respondents who answered this question), thought the current redress options to be reasonable and appropriate. Legal Profession and Estate Agent Respondents were the only respondent category in which the majority did not support the current arrangements, albeit by only a small margin.

3.66 Limited further comments were made, which were that:

• RICS members are required to operate an internal complaints handling procedure. One 'seller' Individual Respondent who had experience of complaining about their Home Report reported that their complaint had been dealt with very well.
• The additional protections afforded by RICS' complaints handling and mediation services have afforded consumers additional protections.
• The amendment to the Scotland Act which permits non contracting parties to pursue civil actions against third parties was crucial for establishing recourse for action in instances of negligence by surveyors.
• The content of a Home Report may be subject to so many caveats that it is hard to see how redress is ever likely to be granted. This includes in relation to absent or inadequate information in the Property Questionnaire. Suggestions as to particular issues that may not be covered by information provided by the seller included around common property condition, title conditions and potential hazards such as subsidence, liability to flooding and the presence of asbestos. A suggested approach was that the disclosure of information on title conditions and other key information on repair and underground conditions should be compulsory.
• It was suggested that the Property Questionnaire should be 'signed off' by the building professional who completes the earlier components.

• One Individual Respondent reported that a Council-based appeals panel had ruled that dealing with misleading information in a Property Questionnaire was outside their jurisdiction.
• Although buyers may believe they have some form of redress in reality they do not. In particular, there is only liability for a negligent Home Report when the buyer has suffered 'material' loss. A Finance Industry Respondent was amongst those noting that there is a gap in redress provision relating to the valuation aspect of the Home Report. They went on to suggest the valuation should be brought into the scope of the redress scheme.
• Any surveyors should be required to carry Professional Indemnity Insurance to make any redress required deliverable.^[9]

3.67 With regard to making a complaint to the Ombudsman, it was suggested that buyers are not interested in pursuing complaints, especially to this stage. However, it was also suggested that the activities of the Ombudsman-Property should be better publicised and access to their services made easier, by providing a discussion line telephone number for example. One Individual Respondent also suggested that the website of the Ombudsman-Property appears to focus on Estate Agents and primarily on English matters.

3.68 One Individual Respondent had experience of using the Ombudsman Service. Their conclusion was that it takes very considerable skill, determination and time to obtain redress and that the redress falls well short of the loss to the purchaser. This respondent went on to suggest that the criteria for redress should be changed to reflect the expense of remedying defects.

Exceptions

3.69 There are a number of exceptions to the requirement to have a Home Report. These are:

• Portfolio of properties
• Seasonal and holiday accommodation
• Mixed sales
• Dual use
• Unsafe properties
• New housing
• Properties to be demolished
• Newly converted properties.

Question 17: Do these exceptions need to be amended?

3.70 Question 17 asked respondents whether these exceptions need to be amended, with the balance of opinion on this issue set out in Table 17 below.

Table 17: Question 17 - Response by Respondent Type

Respondent Type	Yes	No	N/A	Total
Chartered Surveyors	-	9	-	9
Construction Industry	-	-	3	3
Consumer, Advice & Campaign Groups	-	1	4	5
Legal Profession and Estate Agencies	2	4	2	8
Local Authorities, including Trading Standards	5	1	1	7
Property Management, Maintenance and Conservation	2	3	2	7
Other	1	3	4	8
Individuals	19	57	21	97
TOTAL	29	78	37	144
Percentage	20%	54%	26%	100%
Percentage of those responding	27%	73%	-	100%

3.71 The majority of respondents (73% or 78 of the 107 respondents who answered this question), did not think the exceptions need to be amended. Local Authority Respondents were the only category in which the majority of respondents did think change was required.

3.72 Limited further comments were made. However, those who did comment and who favoured change most frequently suggested that Home Reports should be required for new build homes. Some respondents also suggested they should be required for newly converted properties, not least because of the requirement to confirm that the conversion meets all appropriate regulations. Other points raised were:

• The 5 year review of the Home Report does offer a good opportunity to consider whether the current exceptions are still valid.
• A Home Report is as relevant to holiday and seasonal accommodation as to any other property.
• Portfolio properties should require a Home Report if they are intended for purchase by private buyers.
• Mixed sales should be removed.
• The only exception that should remain is for unsafe properties and/or properties to be demolished, although the fact that the property is unsafe would need to be made very clear in any marketing materials for unsafe properties.
• Owners of non-residential properties may experience issues with repair, maintenance and burdens directly arising from the ownership and factoring arrangements associated with these commercial premises, especially when they lie vacant and unmaintained for any length of time. It is not clear why these commercial properties should fall outwith the Home Report regime.