Conveyancers didn’t want them, surveyors apparently did. The public were in the dark, but the consumer lobby were on a crusade, and Parliament was not to be stopped. Home Reports were launched on 1 December 2008 to an already decimated market amid predictions of an even greater decline. David Borrowman of Caesar and Howie, who opposed the scheme, introduces our round up of impressions of the first year from across the professions.

According to the Scottish Executive and Consumer groups Home Reports were intended to revolutionise the Scottish house market for the better. Ignoring the results of its own failed trial, the Executive pushed ahead against reasoned opposition and sensible requests for delay, and made the commissioning of a Home Report compulsory on domestic property sales from 1 December 2008. The results have been spectacular.  

On any logical view of the house market and these figures it is clear that Home Reports have had a significant deleterious effect. If the rules of a market change on a particular date and from that date activity levels collapse I think it fair and reasonable to conclude that the rule change has affected activity. Our own experience in Caesar and Howie on volumes is typical and the chaos caused by this legislation is reflected in our daily work.

We have had a recession since early 2008 and yet the largest falls in listings and sales have come since the introduction of Home Reports most markedly so.  Many commentators predicted aspirational sellers (in our view the majority of sellers) would leave the market if it became too expensive to sell and they have done just that, in their thousands. Every aspirational seller is also an aspirational buyer which is why chasing this group from the market by ratcheting up the price of entering the market was such a daft policy decision. Indeed I wrote to Alex Neil, the Housing  and Communities Minister, and all MSPs advising that Home Reports would decimate the market and cause redundancies throughout the property and mortgage sector as well as in areas where trade relies on house transactions such as furniture shops, carpet shops etc. Such closures and redundancies throughout Scotland are now well documented. 

There is an easy fix to this shambles. Just remove the compulsory nature of Home Reports get rid of the £500 civil fine for selling without one so sellers can freely decide whether to commission a Home Report or not.  Then we will soon see who is right in this debate because members of the public will decide for themselves whether Home Reports are a good thing worth paying for or whether they are not.  

CHARLIE BENNETT, PROPERTY MANAGER, RUSSEL & AITKEN 
Who was it who said a little knowledge is a dangerous thing, and that is where the problem lies. The surveyors’ language in the Home Report is severely limited, no opinion may be given, only a fact expressed. For example ‘water ingress noted in roof space’, sounds like ‘iceberg seen near Titanic’ if you are the buyer, but if it’s caused only by a missing or cracked slate and would cost less than £100 to fix, where is the need to panic?

And that is where we should pause to think.  The system has been designed to aid the home buyers, but it could be better.

The general public understand far more today about property than they did 20 years ago.  The Home Report in some form or other will be here for a long time but please allow the surveyors to be more expressive reduce the wasteful spacing and tidy up the layout.  What we have at the moment is a Trabant, what we want is a Porsche. It’s true both are cars, it’s only a question of style. 

ERIC CURRAN, PARTNER DM HALL CHARTERED SURVEYORS
In the run-up to their introduction, concerns and with an unknown and untried product these were very reasonable concerns centred on three main areas: costs, the burden of upfront payments and the possibility of delays in getting homes on to the market. The cost issue became clear very quickly. Market conditions quickly settled the average fee at levels considerably below the first anticipated levels which were widely reported to start at £500-700. 

Upfront payment was something of an issue for some people who quite simply could not put their hands on the three or potentially four-figure sum for a Home Report before they could put their property on the market.

But market forces adjust very rapidly to new circumstances, and it is now perfectly possible for sellers to defer payment for as long as they want by taking out an agreement with a finance house. This way, they can have their home on the market for around £50, and pay the balance of the survey fee off the sale price, plus a relatively small interest charge.

Where delays do occur they are, unfortunately, almost without exception caused by sellers not engaging fully with the system Ð and not appreciating fully that they too have a vital role to play in the process.  Three things are happening: properties are selling at or around the mortgage valuation; buyers are negotiating downwards if the property has been on the market for a while; or they are selling at a premium if they are particularly desirable. This is, in essence, the way the market always worked.

GEORGE SOLLEY, DIRECTOR OF PROPERTY SALES, THORNTONS PROPERTY SERVICES
Undoubtedly the market needed assistance and the introduction of Home Reports coincided with what was the beginning of a very hard winter for property sales in late 2008/early 2009.

The Home Report has assisted in the sale of properties since its introduction and has proved a useful source of information for buyers and more importantly, perhaps, a basis for negotiation on price between buyer and seller in very uncertain times.  Those properties with Home Reports attracted more attention during the early period following their introduction, which supports the view that they were a benefit in the sales process.

The benefits to the seller being that it assisted in selling their property in an extremely difficult market where availability of buyer was limited.  
For that reason, the cost of the Home Report was a worthwhile investment during the market conditions of 2009.

One year on, the Home Report has proved of value. However, we need to wait to see if the stated objectives of the scheme have been, or will be, met in the years ahead. Is there evidence of improving housing stock?

Is there evidence that multiple surveys have disappeared?

The fact that Home Reports would assist buyers in acquiring property through providing them with a wealth of information was never really an issue. The burden of cost it would put on sellers and the effect it would have on the procedures required to bring a property to the market, were concerns.
For 2009 the costs have been seen as worth it. How those attitudes develop in differing market conditions remains to be seen. 

LESLIE DEANS
Home Reports are really a side issue. They don’t make the market. People may not like paying for a Home Report, but they accept it. It is like Stamp Duty. Nobody likes paying stamp duty. It is not a big issue. The market isn’t determined by something like Home Reports. The market is determined by the banks. That’s the real bloody issue.  There seem to be thousands of people who can’t get a mortgage. People who would love to sell their house don’t manage to do so.  Every first time buyer coming into the market generates seven sales. It generates a lot of business and work for the construction industry. We have this situation where banks are paying lip service to helping the public.  

If we continue with a stagnant market, there are ramifications as a result.

The last thing lawyers can expect is public sympathy, but there are a hell of a lot of lawyers out there feeling the pinch.  Partners are getting let go. Trainees are having their traineeships cancelled because there is no work for them. These are people who would just like their job. Yet the banks are run into the ground, and the government takes billions of pounds of taxpayers’ money to prop them up. Yet still there is talk of paying huge bonuses. It is like the four year old kid stamping his feet and bursting into tears because he doesn’t get his toy. 

Every solicitor/estate agent I know in our sector has laid people off. All the other companies, like small removal companies, get paid when people move house. The vast majority go and buy new carpets, curtains, furniture, so that creates more sales and jobs. All of that spins off on the back of the property market. Plus, how much is the Government losing in Stamp duty revenue? It must be hundreds of millions of pounds.  

It is time the banks were knocked into shape to get out there and do their bit to help the economy. It’s the taxpayer who has propped them up.

DAVID J T HENDERSON, CAMPBELL SMITH WS
It is now just over a year since Home Reports were foisted on the Scottish public by the Scottish Parliament. The introduction could not have had a worse timing as the property market was in the latter stages of last year in the doldrums. Relatively few sales were being recorded and all confidence in the market had been lost. With what was happening in financial institutions and jobs relatively few people were considering house moves out of choice but are simply ‘battening down the hatches’.

In my own experience from December through to March of this year many people were avoiding putting their properties on the market and in my view this was not helped by the fact that as a pre-requisite a Home Buyers Report required to be commissioned - costing in most cases several hundred pounds (also taking into account the lodgment fee for particulars with the ESPC).

More properties went on the market after March and throughout most of the remaining part of 2009 there has been a reasonable degree of movement, particularly when sellers are realistic in their aspirations and not swayed by comparisons of two/three years ago when many properties were selling significantly in excess of market value at that time. It is my view that there is still a significant benefit in purchasers commissioning their own survey and valuation albeit a loan type report which is relatively cheap but at least gives a degree of independence of valuation unrelated to the seller/seller’s surveyor. Infrequently these valuations commissioned by a buyer will produce a figure which differs from that in the seller’s single survey.

Whether this means that certain firms of valuers are more optimistic than others or perhaps suggests some form of persuasive influence on the part of a seller/seller’s agent towards the surveying firm concerned I know not. It is also the case that there is a considerable variance in the attitude of prospective lenders as to whether a seller’s survey is acceptable for the new mortgage sought or if an independent survey should be commissioned. There is also the doubt as to the lifespan of the original survey commissioned - there appears to be a general perception that anything over three months old requires at the very least an updating.

I am not certain whether after a year’s operation it is realistic to assert that Home Buyers Reports are currently having an adverse effect on the property market as a whole.   

DAVID BORROWMAN  MANAGING PARTNER, CAESAR AND HOWIE  
GSPC is the premier house selling organisation in the West. Their listings dropped by 80% in the month after the introduction of Home Reports.  They have remained resolutely at about 50% of 2008 levels ever since. ESPC is the premier house selling organisation in the East. 

Their registrations dropped by 80% immediately after the introduction of Home Reports and are cumulatively down about 52% in 2009 compared with 2008. Solicitor Property Centres and Estate Agencies across the country have recorded similar figures. House sales recorded in the Land Register dropped dramatically in January 2009 by  64 % from the 2008 figure. House sales recorded in the Land Register to end October 2009, the last date on which figures are available, are running at 5503 per month compared with 8571 per month in 2008. That is a massive fall of about 36%. And remember 2009 sales will have been artificially inflated from ‘Normal’ by purchases under the Lift scheme and by the stamp duty holiday.   

Our listings halved in number from precisely the date of the introduction of Home Reports and have not yet recovered. 

Multiple surveys had been unknown in our firm for years until the introduction of Home Reports now we are aware of them happening all the time and who pays for them is often a cause of dispute.  House Purchase and Sale transactions are taking longer and are usually more expensive for both buyer and seller. 

Many sales clients have complained bitterly to us about the cost of Home Reports, many buyers do not trust the sellers Home Report and lenders frequently reject the Home Report and require their own survey to be done. Potential sales clients have simply said they would rather not sell than meet the cost of a home report in a slow market.  

Sellers and buyers alike treat Energy Performance Certificates (part of the Home Report) with open contempt and see them as worthless.  In many Home Reports, some, and even most of the questions in the Property Questionnaire section are answered ‘don’t know’. 

Sellers in financial difficulty who cannot get credit are selling ‘off market’ often well under valuation because they cannot afford the Home Report and they therefore cannot put their house on the market.