Page last updated at 13:14 GMT, Saturday, 29 November 2008

Concern over new home reports

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People who have homes on the market before Monday will not need a report

Concerns have been raised over the impact of home reports, which will be introduced in Scotland from Monday.

Most houses for sale will have to be marketed with a report costing up to 800, which includes a single survey, an energy report and a questionnaire.

However, the Conservatives and the Scottish Law Agents' Society (SLAS) said it would be disastrous for a struggling housing market.

The communities minister said reports would benefit both sellers and buyers.

Home reports are intended to cut the cost to buyers, who often have to commission several surveys before finally bidding successfully for a property.

The new system will see sellers commission one survey and make it available to anyone interested in buying.

It is a more detailed survey than most buyers normally commission and will cover the condition, the valuation and the energy efficiency of the house.

The implementation of this policy during a credit crunch will directly lead to an increase in repossessions
Ian Ferguson
However, Tory MSP David McLetchie described the scheme as "a disaster waiting to hit the Scottish housing market".

"They're going to cost sellers up to 800 to commission and they're not going to be of much use to buyers because lenders are increasingly refusing to accept the Home Report valuation of a property in a falling market," he said.

"Buyers will find that many lenders will not accept the property valuation for mortgage purposes, so they might have to pay for a valuation of their own, which defeats the whole purpose."

The SLAS, which represents about 1,800 members, also raised concerns that lenders would not back the scheme and claimed its introduction would lead to more repossessions.

Spokesman Ian Ferguson said: "The Scottish Government's plans will affect the disadvantaged such as those who have financial problems, are facing eviction, are unemployed or are old people with no savings.

"When the government says the market is preparing a variety of options to assist sellers with the cost of the Home Report - it means credit.

"But those most in need of credit, such as those in danger of re-possession, are the most likely to be refused credit.

"The implementation of this policy during a credit crunch will directly lead to an increase in repossessions because sellers cannot afford to sell their way out of their financial problems."

Everybody agrees that the best time to do it is in a quiet market
Stewart Maxwell
Communities Minister

HBOS has said it would accept the mortgage valuation element of the home report, provided the surveyor was a member of the bank's panel and the valuation was no more than three months old.

It said the scheme would speed up and reduce the cost of the home-buying process.

Royal Bank of Scotland told the BBC it would also recognise the report's valuations, as long as the surveyor was on the bank's panel and agreed to act as the bank's valuation adviser for the mortgage lending decision.

Communities Minister Stewart Maxwell defended the scheme.

"This is the right time to bring this product forward - everybody agrees that the best time to do it is in a quiet market," he said.

"Housebuyers will be able to trust the survey that's provided in the home report, they will have legal liability and if the information is found to be biased or wrong, they can use that legal protection.

"The vast majority of sellers are also buyers and they will save money when they purchase their next home."

England and Wales introduced its own version - Home Information Packs (Hips) - last December.

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