Up front home report payments jeopardises Scottish housing market
The housing market in Scotland has been dealt "a massive blow" by the announcement that sellers will have to pay up front for home reports, according to a Dundee property expert.
- By Maura Bowman
- Published in the Courier : 11.12.10
- Published online : 11.12.10 @ 10.28am
Describing the scheme as "an unmitigated disaster," Lindsay Darroch, head of property services at Blackadders, is calling for the Scottish Government to scrap the scheme, which was introduced two years ago.
Mr Darroch has been a vociferous opponent of the home reports scheme, which requires every seller to obtain a survey and an energy report and to complete a property questionnaire before putting a house on the market.
He said the homes reports are "a stumbling block on the market, an unnecessary cost and impediment, and a solution to a problem that did not exist."
With the reports costing between £500 and £800, many sellers have chosen to defer payment to avoid shelling out cash upfront.
However, Close Payment Services, the company operating the deferred funding option, has said it is to withdraw its product from all home report providers in Scotland from next month.
"This means that from January 1, 2011 there will be no deferred payment option available for home reports," said Mr Darroch. "This is a massive blow to the property market as a number of people decide to take advantage of the deferred payment option to mitigate the upfront costs of putting a property on the market.
"The withdrawal of this product could lead to a high number of properties not coming to the market and will further trap people who, especially in the current economic climate, require to sell their property but cannot afford to make the initial payment.
"My firm is actively looking at other options for our clients and I would hope to be able to announce something shortly."
Home reports were intended to prevent the situation where different buyers were forced to pay for survey after survey for properties they were ultimately unsuccessful in purchasing.
However, a recent BBC investigation suggested that the scheme has actually increased the number of multiple surveys as many mortgage lenders will not accept the initial home report survey and insist the buyer obtains a separate valuation.
"This is a problem that I am sure will increase, especially as properties stay on the market for longer than the three-month life-span of a home report, thus requiring sellers to refresh their home report," said Mr Darroch.
"I would urge the Scottish Government to be bold and scrap the home report now and give the property market a fighting chance for 2011."
Image used under Creative Commons licence courtesy of woodleywonderworks.
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