This item was published during the term of a previous administration that ended in April 2007
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Seller to pay for survey pilot
05/11/2003
A project which seeks to switch the
responsibility for house surveys in the housing market from
potential purchasers to the seller, and to provide more
detailed information, will be piloted in four areas of
Scotland from April 2004.
It will run in parts of Edinburgh and
Glasgow, and in Dundee and Inverness for a period of
between eight months and a year, depending on the
uptake.
The single survey pilots are a
Scottish Executive initiative, supported by solicitors,
estate agents, chartered surveyors and mortgage lenders.
They will be managed by
Communities Scotland, the Scottish
Executive's housing and regeneration agency.
In the pilot, sellers will be
encouraged to arrange and pay for a survey when a home goes
on the market. The survey will provide a comprehensive
guide to the condition of the property, together with a
valuation. It will also contain important information on
energy efficiency and a report on access for the disabled.
The cost of the survey will be met initially by the seller,
but will ultimately be met by the successful purchaser.
This compares with the established
system in Scotland where the majority of people seeking to
buy a home pay for a valuation only, not a survey, when
they want to purchase a house. This means they have limited
information on the property they are potentially
purchasing. One in four recent buyers faced unexpected
repairs costs averaging around £3,700. A third of house
purchasers in Scotland have to pay for multiple reports for
different properties before they have a successful bid.
This can cost around £100 each time.
Communities Minister Margaret Curran,
said:
"This pilot begins the process
promised by the Executive to bring greater transparency to
the housing market. Too many potential buyers commission a
minimal valuation and miss out on important information on
the condition of the property they want to buy.
Making a single survey available will also
mean potential purchasers are not left with a fruitless
expense in a booming housing market."
"As buying a home is the most
expensive transaction in most people's lives, we want to
improve this situation."
"I am grateful for the support we have
had from the solicitors, estate agents, mortgage lenders
and the chartered surveyors in putting this voluntary
scheme together. I hope that house sellers and buyers will
take part and help us establish a fairer system which
offers incentives to both the seller and the potential
buyer."
The proposal for a single survey
linked a to a house sale is designed to tackle three
weaknesses in the house buying and selling system. These
were identified in the first report of the Housing
Improvement Task Force as:
The current reliance of most
house purchasers on valuations which provide only
limited information on the condition of a property.
These were considered inadequate to meet the
necessary level of information that should be made
available to the purchaser. Many solicitors already
suggest to clients that they commission a more
complete survey
The encouragement which the
existing system gives to multi surveys and
valuations, particularly in buoyant markets such as
Edinburgh and the west end of Glasgow, which can
result in abortive costs for house buyers and a
disinclination to commission the more detailed, but
more costly, surveys in advance of purchase
The setting of upset prices
at artificially low levels by sellers in order to
stimulate interest, which can result in prospective
buyers incurring unnecessary expense on a property
realistically beyond their price range.
It is expected that selling agents
will ask all sellers in the target areas during the period
to take part in the pilot. This will be a voluntary scheme
but sellers will be encouraged to participate.
A full evaluation of the pilot will be
carried out. Ministers will then decide how to take the
single survey forward.
The pilot has been devised in
partnership with a Single Survey Steering Group set up by
the Scottish Executive's Housing Improvement Task Force.
The Group is made up of representatives from the Royal
Institution of Chartered Surveyors, The Law Society, the
Council of Mortgage Lenders, the Scottish Consumers
Council, the National Association of Estate Agents, and two
independent members.
The pilot areas are Edinburgh North
and Leith, Greater Dundee, Glasgow North and West and the
area around and including Inverness. The pilot areas have
been chosen to reflect a diversity of market conditions and
features, e.g. prices and rates of increase, market
activity, urban and rural properties and the extent to
which solicitors and estate agents are active as selling
agents.
It is likely that surveys will cost
from £300, depending on the value of the property and the
elements included.
The survey will be made available to all
potential purchasers and the cost will be met by the
eventual successful
purchaser.
Currently, around 90% of all
potential purchasers rely on a simple valuation when buying
their home.