Evergreen Surveys Ltd

Q. Will there be any exemptions from the requirement to provide a home information pack?
A. The home information pack obligation will not apply to non-residential property, mixed commercial (or industrial) and residential property, properties sold with sitting tenants and therefore unavailable for owner occupation or portfolios of properties.

Q. Will the new rules apply to sales under the "right to buy"?
A. No, but we will be consulting with local authorities and other social landlords on the possibility of extending the benefits of the home information pack to these types of sale.
Q. Why include a local search in the home information pack?
A. These are important to home buyers and mortgage lenders. If problems are revealed, this can lead to further investigations and delays, possible re-negotiations or even transactions collapsing altogether. The purpose of the home information pack is to introduce transparency into the system by exposing potential problems and transaction threatening information right at the beginning of the process. The local search is an important component. It is a check against other components of the pack - the home condition report and the property information form. The search therefore needs to be available up front.

Q. Which searches will need to be included?
A. We envisage that the standard local searches of information held by local authorities, a water/drainage search and an environment search will be included. The Government is considering whether more specific searches (eg a coal mining search) should be included where appropriate.

Q. But searches go out of date, will sellers have to renew them?
A. Search results are generally accepted for up to six months. However, sellers will not be required to renew a search after this period. As on-line search information becomes available nationally, buyers will be able, if they wish, to update the information quickly and economically.

Q. What are the advantages of including a home condition report in the home information pack?
A. The home information pack will ensure that the necessary preparation is undertaken to enable the transaction to proceed smoothly. We want to ensure that any information that might delay or prevent a sale is available up front at the very start of the transaction. Late availability of condition information frequently causes problems.
Our research suggests that 43% of failed transactions do so as a result of problems revealed by a valuation inspection or condition survey after terms have been agreed. The cost to consumers can be around £1,000 per transaction. Moreover, even where transactions do not fail they are often delayed whilst renegotiations take place. In a chain situation the effects go well beyond those directly involved. That is why we want to ensure that condition problems are identified up front.
There are advantages for both sellers and buyers. These include:
helping sellers make decisions about how much to ask for their home, and give them the option of having any necessary work done or else getting quotes before they market the property.
helping buyers make an offer, which reflects the true condition of the property, and avoid unexpected bills when they move in.
for both seller and buyer there is much less risk that the transaction will be delayed or fail due to problems with the condition being revealed later.

Q. What will the home condition report cover?
A. The home condition report will be an objective report on the condition of the property that can be relied upon by buyer, seller and lender. The report will be in a standard format prepared in accordance with national occupational standards. It will cover matters of importance to a buyer - the general condition of the property taking account of its age, character and location; how energy efficient it is; and any defects or other matters requiring attention.

Q. Will the home condition report be based on a homebuyer survey, or a more detailed building survey?
A. We have started from scratch and, with the help of the Royal Institution of Chartered Surveyors and other key stakeholders are working up a new format designed to give prospective buyers the information they need. The HCR will be a mid range survey, similar in depth to the current level 2 survey, the Homebuyers Survey and Valuation, although without the valuation element. The HCR was subjected to technical and consumer testing in 2003. A summary of the findings is available in the report Piloting the Home Condition Report.

Q. Will the home condition report include a valuation?
A. No. Valuations are subjective and can vary over a short period of time. We believe that including a valuation in the condition report would interfere with the usual bargaining process between buyers and sellers. Also, not all surveyors are valuers. Estate agents are often in the best position to advise sellers on value, given their knowledge and experience of the local market.

Q. But only a minority of buyers currently have a survey?
A. We believe it is a false economy to buy a home without a professional report on its condition. It is important not to rely solely on a mortgage lender's valuation inspection because it is not a report on condition. According to research by a major firm of estate agents, 18% of buyers who relied on their lenders valuation faced unexpected repair bills in the first four months of moving in to their new home. In 48% of these cases the bill amounted to £500 or more, and in 17% of cases the bill exceeded £1,000.

Q. But surveys are expensive, what will the home condition report cost?
A. The cost of the HCR will not be fixed by any central body. It will be determined by market forces - the price charged will reflect a number of factors, including the time the inspector needs to undertake the task (which in turn will depend on the size and complexity of the property), and on local market conditions. By way of illustration, the cost of preparing a HCR for a typical 1930s three-bedroomed semi-detached house located in a provincial town could be £270-320. This is offset by potential savings on abortive costs, unexpected repair bills and fewer mortgage valuation surveys.

Q. Why should the seller pay for the home condition report?
A. The report has benefits for the seller as well as the buyer - it helps to avoid later problems and achieve a quicker sale. It will help the seller to decide on a realistic price and gives them the opportunity to carry out any necessary repairs before offering the property for sale. Since the vast majority of sellers are also buyers, any additional costs will often be balanced by savings on the purchase.

Q. But buyers won't trust a report commissioned by the seller?
A. These concerns are being addressed. Only inspectors qualifying under a certification scheme approved by the Secretary of State will be able to prepare home condition reports. The scheme will be responsible for monitoring and auditing inspectors' work to ensure that standards are maintained.
The home condition report will be an objective report on the condition of the property that can be relied upon by buyer, seller and lender. The report will be in a standard format prepared in accordance with the QCA approved national occupational standards so there will no doubt what is required, and how it is to be carried out. To ensure that consumers are protected, inspectors will need to have suitable insurance which will be backed up by insurance of last resort provided by the certification scheme.
If inspectors fail to maintain the correct standard or act in a way that is partial to one party contrary to the rules of the scheme, their certification will be removed, and along with that their ability to produce HCRs. Therefore, any inspector not complying with the scheme's requirements would be jeopardising his/her livelihood, would risk being sued by buyer, seller or lender and risk losing his insurance. Given these safeguards we believe that buyers will have every reason to have confidence in the report. Research published in 2003 by the Yorkshire Bank revealed that fewer then two in ten house buyers said they would not trust a survey provided by the seller.

Q. Mortgage lenders won't trust the home condition report (HCR).
A. There is no justification for this view. Lenders will have rights to rely on the home condition report. They are involved in its design and will be represented on the certification scheme. The HCR will be one of several tools available to lenders and will provide helpful factual material to support other valuation methods such as desk top or automated valuation models. Lenders will still have a right to ask for a separate valuation inspection but these should become much less common.

Q. Won't home condition reports become out of date and have to be repeated at extra cost?
A. There will be no requirement for sellers to renew the home condition report. As with any survey, the HCR will provide a 'snapshot' of the condition of the property at the time it was inspected. As the home condition report will not contain a valuation it should normally be reliable for some time. We consider that decisions on whether the HCR needs to be updated are best left for buyers and sellers and their professional advisers to take depending on the circumstances of each case. An added advantage is that the availability of a home condition report should avoid the waste involved in multiple surveys by different buyers that occurs under the present system.

Q. Will there be enough Home Inspectors available to do the job?
A. It is estimated that about 7,500 home inspectors will be needed to undertake the required number of inspections. Independent research shows that there are between 10,000 and 18,000 people already in the industry with some relevant experience who are likely to seek to become home inspectors and over 8,000 chartered surveyors and other property professionals have already expressed an interest in qualifying.
The industry is confident that sufficient qualified inspectors will be available to ensure smooth introduction of the home condition report. However, the new arrangements will not be brought into force until we are satisfied that sufficient home inspectors are available.

Q. Who can become a Home Inspector?
A. There will be open access to anyone who can demonstrate that they are competent to undertake this work in accordance with the QCA approved national occupational standards, as well as having satisfactory insurance cover. Home Inspectors will not be limited to one profession (e.g. RICS). Further information can be found in the Home Condition Reports and Home Inspectors Section of this website.

Q. Inspectors will exaggerate faults to create work for maintenance firms.
A. The HCR will be an objective report on the condition of the home, and the home inspector will be liable for the contents of the report to the buyer and lender as well as the seller. The HCR will not make specific recommendations for repair, nor recommend contractors to undertake such work, and therefore should not encourage inspectors to find faults to generate work for home maintenance firms.

Q. PII insurance won't be available for Inspectors.
A. Satisfactory Professional Indemnity Insurance (PII) is essential. Research has been carried out into suitable means of providing a robust insurance regime, which will include insurance of last resort to be provided by the certification scheme. Research reports from Willis Ltd and Bryan Fowler Consulting have recently been published and options will be considered by ODPM and the industry working group advising on insurance matters. The possible basis for an insurance regime will be published when this further work is complete.

Q. A certification scheme for home condition reports is excessive government regulation.
A. Not at all. It is mainly self-regulation by the industry and other key stakeholders, all of who endorse the need for a certification regime to protect consumer interests. The government's role will be to identify and evaluate the requirements of certification arrangements, and to vet any scheme presented for approval.

Q. What about new homes?
A. A HCR will not be required for the first sale of a new home, provided it is being sold with an NHBC, Zurich or similar warranty. We currently intend that a HCR will be required for any subsequent resale though, even if it takes place within the warranty period. This is necessary because works may have been undertaken that either invalidate or are not covered by the warranty, or else proper maintenance of the home may not have been carried out. However, final decisions have not yet been made.

Q. Your proposals will not prevent gazumping, why not just ban it?
A. Our research found that gazumping occurred in less than two per cent of transactions. In our view, a ban is impractical because it would risk stopping legitimate activity. For example, a seller might want to accept another offer because the buyer is deliberately dragging his feet. Also in some circumstances sellers, such as trustees and executors, are under a legal duty to obtain the best price they can for a property. The answer lies in increasing transparency and speeding up the process, thus reducing the window within which problems like gazumping can occur. That is what our proposals will achieve. Of course, the proposals also mean that even if a buyer is gazumped, then they shouldn't have incurred the heavy wasted costs, which are incurred under the current process, from paying for surveys and searches on the property they hoped to buy.

Q. The home information pack will not deal with problems caused by chains?
A. Chains are an inevitable consequence of people wanting to co-ordinate their buying and selling. The answer lies in speeding up the process for each link in the chain. Two thirds of the respondents to Land Registry consultation on complementary proposals for e-conveyancing supported the idea of a "chain matrix" of linked transactions which would track the progress of all transactions in a chain, and add further transparency.

Q. Some of the professions don't support the proposals do they?
A. We have involved all the main professional bodies closely in steering our research, analysing the results of our consultation and developing our reform proposals. It is true that some disagree with us on some points. But the justification for our proposals stands or falls on whether they benefit the consumer, not whether all the professionals like them.

Q, Why not adopt the Scottish system, where an offer is binding once accepted?
A. It is already open to sellers and buyers to follow the Scottish arrangements if they wish. This does not require a change in the law. These arrangements work well in most parts of Scotland, but we have doubts about whether they would work as well in more active housing markets. The up front costs to prospective buyers mean that more failed bids would result in more wasted expense for unsuccessful buyers.

Q. Other countries use conditional contracts. Why shouldn't we?
A. We recognise that both buyers and sellers want to be sure as soon as possible that their transaction will go ahead. Conditional contracts, which set a completion date from which neither side can withdraw except as allowed by the conditions, are already available as a way of achieving this. But they are impractical in a chain of transactions where a completion date cannot be set at the outset.

Q. Why not introduce lock-out agreements, options to purchase or costs guarantees?
A. These are already available to anyone who wants to use them. But they all have drawbacks, which is why they are not widely used. We do not believe it is justified to impose these arrangements on people.
Lock out agreements and options to purchase provide more certainty for the buyer. But they do not provide a guarantee for the seller, since they do not commit the buyer to completing the transaction.
We know there is extensive public support for agreements, which guarantee the other side's costs if either the seller, or buyer withdraws. Such agreements are already available for anyone who wants to use them. But anyone proposing to do so would be well advised to take advice on the practicalities - such as how blame and compensation would be apportioned where transactions in a chain fail.

Q. The evidence base for these reforms is thin isn't it?
A. Nothing could be further from the truth. Our policies are based on an extensive, diverse and robust set of evidence.
The key components include:
A desk based study of international comparisons looking at ten comparative countries;
The biggest study ever undertaken of the current system of home buying and selling in England and Wales. Tracking survey of nearly 800 transactions, a retrospective survey of over 500 buyers who have recently bought a home in England and Wales and a survey of 200 recent buyers in Scotland. Interviews were also conducted with 200 solicitors, 450 estate agents and 30 mortgage lenders, which involved interviews on 130 individual transactions;
Further investigative work carried out on Danish, New South Wales and North American systems of home buying and selling;
A major consultation exercise and analysis of almost 1,000 responses;
A study of fourteen existing voluntary home information pack initiatives;
Research in low value/low demand areas including citizens workshops, based on interviews with 36 recent buyers and sellers and 12 local service providers involved in the home buying and selling process;
Litmus Test of small businesses, based on in-depth interviews with nine organisations;
The pilot scheme in Bristol to test practical operation of the home information pack, based on the experience of compiling 189 packs, tracking interviews with around 150 sellers and 48 buyers, and in-depth interviews with around 50 local scheme participants;
Technical and consumer pilots of the Home Condition Report (HCR);
Establishing the supply base for home inspectors;
Availability of insurance for home inspectors

Q. The Bristol pilot failed to prove anything. Less than 200 people took part, and that was with the Government paying the costs.
A. The Bristol pilot was designed to tell us how easy it was to assemble the elements of the home information pack, whether we had the right contents, what buyers, sellers and professionals thought of the pack, and how it could be improved. It gave us all that information.
The pilot has shown us that the home information pack can normally be assembled quickly. This is important. It demonstrated that the home information pack injects much needed transparency into the process and gave buyers a clearer understanding of the property. It proved that the home information pack increases certainty by helping people to identify and resolve problems much sooner. And it helped us identify areas for refinement, especially with the format of the home condition report.
published by the Office of the Deputy Prime Minister

Q. What's wrong with the present home buying and selling system?
A. The research shows that it: is slow by international standards; is wasteful and inefficient, resulting in high rates of failed transactions; is particularly prone to delays and other problems during the period between offer acceptance and exchange of contracts; does not operate in the best interests of buyers and sellers; causes considerable frustration and stress.

Q. How will these changes help?
A. They are part of a package of complementary measures requiring action by everyone involved in the process. The package is intended to:
ensure that buyers and sellers are better prepared and have as much information as possible right from the start;
secure faster mortgage offers and search replies;
reduce delays and uncertainties;
help address a number of problems caused by delays, including gazumping and problems in chains.
Q. When will the duty to have a home information pack come into force?
We hope to lay regulations setting out the confirmed contents of the pack before Parliament in summer 2005 and expect the pack to become law at the beginning of 2007. But many sellers will not have to wait for legislation in order to take advantage of home information packs. Many estate agents and conveyancers are already offering home information packs on a voluntary basis. We want to encourage this and would like forward looking property professionals to follow this lead. This will help pave the way for a smooth introduction of compulsory home information packs throughout England and Wales.

Q. Will the home information pack be compulsory?
A. Yes. We believe that the home information pack will need to be made compulsory to ensure that everyone benefits from them.

Q. The Government shouldn't interfere in the market why not try a voluntary system first?
A. Because we don't think it would work. With a voluntary scheme, there would be a temptation for a seller to attempt to save money by refusing to provide a pack, while hoping that the person he is buying from has done so. This could result in delays and would undo the benefits brought about by The home information pack in other transactions in a chain.

Q. Technology will transform the home buying and selling process without the need for home information pack legislation.
A. Information technology and e-conveyancing are the key to ensuring that information can be obtained and exchanged quickly and economically, but these developments support the introduction of home information packs; they are not a substitute. The home information packs are still required to ensure that information is available up front at the very start of the transaction.

Q. Will failure to provide a home information pack be a criminal offence?
A. No, the enforcement regime will be based on civil sanctions.

Q. What are the civil sanctions?
A. The regime will give local weights and measures authorities primary responsibility for enforcing the home information pack obligations. Trading Standards Officers would be given discretion to determine appropriate action in each case - whether to provide information and assistance, issue a warning or a civil fixed penalty notice. The penalty would be set at a rate determined by the Secretary of State (initially envisaged to be around £200). Trading Standards Officers would also be able to notify the Office of Fair Trading of any breach by persons acting as an estate agent, which could also trigger action by the OFT under Estate Agents Act 1979. Trading Standards Officers would have duty to do so, where a fixed penalty notice had been issued. We're consulting Law Society about ways of applying equivalent enforcement arrangements to conveyancers marketing properties for sale. In addition, a person who breached the home information pack obligations would be liable to be sued by prospective buyers for recovery of the costs of obtaining documents which should have been provided in the pack.

Q. Are you changing caveat emptor to caveat vendor?
A. No. Buyers and their professional advisers will still need to satisfy themselves that in all respects the property and the terms of the transaction are satisfactory. The home information pack will assist buyers and their advisers to do this - by making documents and information available for scrutiny up front, at the very start of the process.

Q. By how much would the new system speed up transactions?
A. Our research shows that a typical transaction takes 8 weeks from offer acceptance to exchange of contracts. This is far too long and causes problems. The new rules could shorten this period significantly by ensuring that buyers and sellers have the information they need right at the start of the process. They could then exchange contracts earlier than under the present system.
The amount of time saved would depend on factors such as whether the transaction is part of a chain but there is no reason why the average time cannot be halved. More importantly, the reduction of transaction threatening risks will mean that both parties can have greater certainty that the transaction will proceed to completion.

Q. Will this add to the cost of home buying and selling? If so, who will pay?
A. We estimate that the cost of preparing a pack for an average home will be of the order of £635. But these are not additional costs, as most of the changes involve doing the same things but more efficiently and earlier in the process. The home information pack will transfer responsibility for obtaining local searches and a home condition report from the buyer to the seller. But, since the vast majority of sellers are also buyers these costs would usually be balanced by corresponding savings and benefits. Around £350 million is wasted each year by consumers on aborted transactions under the current process. The home information pack will reduce substantially the number of failed transactions and hence these wasted costs.

Q. What about sellers who cannot afford the up front cost of a home information pack?
A. Many sellers will not have to pay for a home information pack straight away. There are already a number of voluntary home information pack schemes operating now. The most successful ones do not require sellers to pay up front. It is clear from information we are receiving the industry expects to be able to defer payment of all, or some of these costs until the property is sold. That is how it works now with estate agents' fees in many places.

Q. Will the home information pack push up house prices?
A. There is no obvious reason why the new rules should cause house price inflation. One of the advantages of having an up front home condition report is that homes are more likely to be marketed at prices which genuinely reflect their true condition.

Q. There will be fewer properties for sale, the market will collapse .
A. The evidence suggests otherwise. Research from the UK's largest estate agency group suggests that there will not be significantly fewer homes on the market. We would lose only those who are not serious about selling anyway. This will lead to a better functioning and less stressful system, which might encourage people to move more, not less, often. The introduction of similar changes in Denmark and New South Wales had a barely discernible effect on the market

Q. Isn't this unfair to sellers in areas where prices are low and the market is depressed?
A. We have included in the draft legislation a regulatory power for different provisions to be made for different areas and different descriptions of property. We have published a consultation paper on the application of the home information pack in areas of low demand and value. This disseminates results of research and provides an opportunity to obtain further views, and suggestions as to how such a power might be used.
The consultation responses suggest that the Government should leave it to the market to provide solutions to any problems that may arise. We need to strike a balance between, on the one hand, any disproportionate effect of introducing compulsory packs for very low value properties, and on the other hand the need to avoid stigmatising these properties even more. We will consider all views before deciding whether it is appropriate to make special arrangements for these properties

Q. What are the benefits of the home information pack?
A. The home information pack will bring together at the very start of the process important information which at present is collected piecemeal in the days and weeks after an offer has been accepted. This will:
help the seller decide on a realistic asking price;
give the buyer the essential information needed to make a well-informed offer and proceed with the purchase;
greatly reduce the risk of the terms having to be renegotiated due to later disclosure of information, e.g. about any defects;
shorten the period of uncertainty between offer acceptance and exchange of contracts, thereby reducing the window in which gazumping and other problems can occur.

Q. Won't the home information pack delay marketing, and just move delays to the beginning of the process?
A. The legislation requires a pack to be ready before marketing can commence. But earlier certainty is much more important than instant marketing. Time spent preparing the pack is time well spent. It prepares the way for a smoother, more certain and more successful transaction.
Putting a home on the market is not an instant process now - sellers have forms to fill in and particulars have to be agreed. Our research shows that the home information pack can be assembled in less than 10 working days. With experience and with the availability of on-line searches, this can be made even quicker.
In cases where, despite best efforts, information required for the pack cannot be obtained reasonably quickly, the property will be able to be marketed with an incomplete pack.

Q. Isn't it unfair to put all this extra responsibility on the seller?
A. There are benefits to the seller, as well as the buyer, in assembling as much information as possible up front:
it helps the seller decide on a realistic asking price;
it greatly reduces the risk that a buyer will want to renegotiate the terms in the light of information which at present is not disclosed until a later stage, e.g. any defects revealed by a survey or search;
it offers earlier certainty by shortening the period between offer acceptance and exchange of contracts.

Q. Why not require buyers to arrange a mortgage before making an offer?
A. It is important that buyers are well prepared before starting on the home buying process. Buyers should consult mortgage lenders and secure an 'in principle' mortgage offer before they begin their property search. Nearly all mortgage lenders already provide this service. But we believe that this objective can be achieved without resorting to compulsion. With the assistance of mortgage lenders, estate agents and conveyancers, we want early 'in principle' mortgage offers to become standard good practice.

Q. Who will actually compile the home information pack?
A. The person marketing the property will be responsible for ensuring that the pack is available. This would normally be the seller's estate agent but could be a builder, property developer, solicitor, or the seller if he or she is marketing without an estate agent.

Q. What types of sales will be affected?
A. The requirement to provide a home information pack will apply to open market sales of homes with vacant possession. It is not intended to catch private sales, (e.g. to a member of the family, a neighbour or a friend) where the property is not offered on the open market, or sales of tenanted property where the home is not offered with vacant possession.

Q. Will there be any exemptions from the requirement to provide a home information pack?
A. The home information pack obligation will not apply to non-residential property, mixed commercial (or industrial) and residential property, properties sold with sitting tenants and therefore unavailable for owner occupation or portfolios of properties.

Q. Will the new rules apply to sales under the "right to buy"?
A. No, but we will be consulting with local authorities and other social landlords on the possibility of extending the benefits of the home information pack to these types of sale.

Q. Why include a local search in the home information pack?
A. These are important to home buyers and mortgage lenders. If problems are revealed, this can lead to further investigations and delays, possible re-negotiations or even transactions collapsing altogether. The purpose of the home information pack is to introduce transparency into the system by exposing potential problems and transaction threatening information right at the beginning of the process. The local search is an important component. It is a check against other components of the pack - the home condition report and the property information form. The search therefore needs to be available up front.

Q. Which searches will need to be included?
A. We envisage that the standard local searches of information held by local authorities, a water/drainage search and an environment search will be included. The Government is considering whether more specific searches (eg a coal mining search) should be included where appropriate.

Q. But searches go out of date, will sellers have to renew them?
A. Search results are generally accepted for up to six months. However, sellers will not be required to renew a search after this period. As on-line search information becomes available nationally, buyers will be able, if they wish, to update the information quickly and economically.

Q. What are the advantages of including a home condition report in the home information pack?
A. The home information pack will ensure that the necessary preparation is undertaken to enable the transaction to proceed smoothly. We want to ensure that any information that might delay or prevent a sale is available up front at the very start of the transaction. Late availability of condition information frequently causes problems.
Our research suggests that 43% of failed transactions do so as a result of problems revealed by a valuation inspection or condition survey after terms have been agreed. The cost to consumers can be around £1,000 per transaction. Moreover, even where transactions do not fail they are often delayed whilst renegotiations take place. In a chain situation the effects go well beyond those directly involved. That is why we want to ensure that condition problems are identified up front.
There are advantages for both sellers and buyers. These include:
helping sellers make decisions about how much to ask for their home, and give them the option of having any necessary work done or else getting quotes before they market the property.
helping buyers make an offer, which reflects the true condition of the property, and avoid unexpected bills when they move in.
for both seller and buyer there is much less risk that the transaction will be delayed or fail due to problems with the condition being revealed later.

Q. What will the home condition report cover?
A. The home condition report will be an objective report on the condition of the property that can be relied upon by buyer, seller and lender. The report will be in a standard format prepared in accordance with national occupational standards. It will cover matters of importance to a buyer - the general condition of the property taking account of its age, character and location; how energy efficient it is; and any defects or other matters requiring attention.

Q. Will the home condition report be based on a homebuyer survey, or a more detailed building survey?
A. We have started from scratch and, with the help of the Royal Institution of Chartered Surveyors and other key stakeholders are working up a new format designed to give prospective buyers the information they need. The HCR will be a mid range survey, similar in depth to the current level 2 survey, the Homebuyers Survey and Valuation, although without the valuation element. The HCR was subjected to technical and consumer testing in 2003. A summary of the findings is available in the report Piloting the Home Condition Report.

Q. Will the home condition report include a valuation?
A. No. Valuations are subjective and can vary over a short period of time. We believe that including a valuation in the condition report would interfere with the usual bargaining process between buyers and sellers. Also, not all surveyors are valuers. Estate agents are often in the best position to advise sellers on value, given their knowledge and experience of the local market.

Q. But only a minority of buyers currently have a survey?
A. We believe it is a false economy to buy a home without a professional report on its condition. It is important not to rely solely on a mortgage lender's valuation inspection because it is not a report on condition. According to research by a major firm of estate agents, 18% of buyers who relied on their lenders valuation faced unexpected repair bills in the first four months of moving in to their new home. In 48% of these cases the bill amounted to £500 or more, and in 17% of cases the bill exceeded £1,000.

Q. But surveys are expensive, what will the home condition report cost?
A. The cost of the HCR will not be fixed by any central body. It will be determined by market forces - the price charged will reflect a number of factors, including the time the inspector needs to undertake the task (which in turn will depend on the size and complexity of the property), and on local market conditions. By way of illustration, the cost of preparing a HCR for a typical 1930s three-bedroomed semi-detached house located in a provincial town could be £270-320. This is offset by potential savings on abortive costs, unexpected repair bills and fewer mortgage valuation surveys.

Q. Why should the seller pay for the home condition report?
A. The report has benefits for the seller as well as the buyer - it helps to avoid later problems and achieve a quicker sale. It will help the seller to decide on a realistic price and gives them the opportunity to carry out any necessary repairs before offering the property for sale. Since the vast majority of sellers are also buyers, any additional costs will often be balanced by savings on the purchase.

Q. But buyers won't trust a report commissioned by the seller?
A. These concerns are being addressed. Only inspectors qualifying under a certification scheme approved by the Secretary of State will be able to prepare home condition reports. The scheme will be responsible for monitoring and auditing inspectors' work to ensure that standards are maintained.
The home condition report will be an objective report on the condition of the property that can be relied upon by buyer, seller and lender. The report will be in a standard format prepared in accordance with the QCA approved national occupational standards so there will no doubt what is required, and how it is to be carried out. To ensure that consumers are protected, inspectors will need to have suitable insurance which will be backed up by insurance of last resort provided by the certification scheme.
If inspectors fail to maintain the correct standard or act in a way that is partial to one party contrary to the rules of the scheme, their certification will be removed, and along with that their ability to produce HCRs. Therefore, any inspector not complying with the scheme's requirements would be jeopardising his/her livelihood, would risk being sued by buyer, seller or lender and risk losing his insurance. Given these safeguards we believe that buyers will have every reason to have confidence in the report. Research published in 2003 by the Yorkshire Bank revealed that fewer then two in ten house buyers said they would not trust a survey provided by the seller.

Q. Mortgage lenders won't trust the home condition report (HCR).
A. There is no justification for this view. Lenders will have rights to rely on the home condition report. They are involved in its design and will be represented on the certification scheme. The HCR will be one of several tools available to lenders and will provide helpful factual material to support other valuation methods such as desk top or automated valuation models. Lenders will still have a right to ask for a separate valuation inspection but these should become much less common.

Q. Won't home condition reports become out of date and have to be repeated at extra cost?
A. There will be no requirement for sellers to renew the home condition report. As with any survey, the HCR will provide a 'snapshot' of the condition of the property at the time it was inspected. As the home condition report will not contain a valuation it should normally be reliable for some time. We consider that decisions on whether the HCR needs to be updated are best left for buyers and sellers and their professional advisers to take depending on the circumstances of each case. An added advantage is that the availability of a home condition report should avoid the waste involved in multiple surveys by Q. Will there be enough Home Inspectors available to do the job?
A. It is estimated that about 7,500 home inspectors will be needed to undertake the required number of inspections. Independent research shows that there are between 10,000 and 18,000 people already in the industry with some relevant experience who are likely to seek to become home inspectors and over 8,000 chartered surveyors and other property professionals have already expressed an interest in qualifying.
The industry is confident that sufficient qualified inspectors will be available to ensure smooth introduction of the home condition report. However, the new arrangements will not be brought into force until we are satisfied that sufficient home inspectors are available.

Q. Who can become a Home Inspector?
A. There will be open access to anyone who can demonstrate that they are competent to undertake this work in accordance with the QCA approved national occupational standards, as well as having satisfactory insurance cover. Home Inspectors will not be limited to one profession (e.g. RICS). Further information can be found in the Home Condition Reports and Home Inspectors Section of this website.
Inspectors will exaggerate faults to create work for maintenance firms.
A. The HCR will be an objective report on the condition of the home, and the home inspector will be liable for the contents of the report to the buyer and lender as well as the seller. The HCR will not make specific recommendations for repair, nor recommend contractors to undertake such work, and therefore should not encourage inspectors to find faults to generate work for home maintenance firms.

Q. PII insurance won't be available for Inspectors.
A. Satisfactory Professional Indemnity Insurance (PII) is essential. Research has been carried out into suitable means of providing a robust insurance regime, which will include insurance of last resort to be provided by the certification scheme. Research reports from Willis Ltd and Bryan Fowler Consulting have recently been published and options will be considered by ODPM and the industry working group advising on insurance matters. The possible basis for an insurance regime will be published when this further work is complete.

Q. A certification scheme for home condition reports is excessive government regulation.
A. Not at all. It is mainly self-regulation by the industry and other key stakeholders, all of who endorse the need for a certification regime to protect consumer interests. The government's role will be to identify and evaluate the requirements of certification arrangements, and to vet any scheme presented for approval.