Professional briefing - The Journal Online

Feature Home reports
One year after their introduction, have solicitors been won over at all to
the system of home reports? Comments collected by the Society and the
Journal between them suggest that the scheme’s stated objectives are
not being fully realised, as Peter Nicholson reports
Reportcard
“Home reports have certainly saved the
surveying profession from penury. I think
the jury is still out on whether they are
good for the public.” (Janette Wilson,
convener, Conveyancing Committee,
the Law Society of Scotland)
Ayear into home reports,
while most solicitors agree
that the state of the
property market and the
wider economy is the dominant
concern, feelings about the reports are
still running strongly.
Some have been won over,
believing they add a degree of
transparency and help deals go
through more quickly. Feedback
however indicates a majority view that
they act as a drag on the market by
deterring people thinking of
testing the level of interest in their
house, are distrusted by many
clients, and fall short of achieving
their stated objectives.
It is worth recalling at this point
the principal justifications for
bringing in the home report. First and
foremost was the desire to see buyers
receive meaningful information
fyi
An ESPC member survey
found 80% experiencing
some lender problems,
the mode answer
being “25% of
the time”
about the condition of the property
for which they were offering; and it
was a cornerstone of this exercise that
the report should be independently
prepared by the surveyor, though
commissioned by the seller, and
made available to all prospective
purchasers. Further benefits
anticipated were the avoidance of
artificially low upset prices, and an
end to multiple surveys on the same
property by different offerers. So how
does experience to date measure up?
Lenders buying in?
The first and perhaps most important
point is that the answer depends very
much on which solicitor you talk to.
The differences in accounts of how
the system operates are striking.
Take, for example, one of the
principal areas of complaint, the
continuing reluctance of some lenders
to accept the reports (RBS was named
by more than one respondent).
Mike Sinclair of Aberdein Considine
in Aberdeen, and Ken Thomson of
Thorntons in Dundee, both report
only limited problems with lenders,
though Thomson adds that this
cannot yet be taken for granted.
But in Perth, Graham Gibson of
Kirklands claims he has “yet to come
across a case where the lender was
willing to accept the home report”.
Often it is already out of date for
lenders’ purposes (unusually, he cites a
six week cutoff point compared with
the general experience of 12 weeks’
currency); in any event, he adds, “my
experience has been that when a
purchaser has been successful they want
to get a separate valuation for peace of
mind/mortgage valuation purposes”.
An ESPC survey of member firms
found 80% experiencing some lender
problems, the mode answer being
“25% of the time”.
Janette Wilson thinks lender issues
are currently “the main problem”, with
some regularly demanding either an
updated or an independent valuation
because of the age of the report, the
surveyor not being on their panel, or a
high loan-to-value ratio.
Kennedy Foster of the Council of
Mortgage Lenders in Scotland claims
there has been no major change so far
as lenders are concerned: they will
generally accept a valuation provided
12 / theJournal December 09 www.journalonline.co.uk