NEW PACKS FOR SELLING HOMES WILL "ENCOURAGE COWBOYS"

The Government's plan to force everyone selling a home to carry out a survey will create a 'breading ground for cowboy inspectors', critics claimed yesterday.

As details of the long-awaited shake-up of the housing market were unveiled, opponents warned that the scheme would also put up the cost of selling a home and crate unnecessary red tape.

However, consumer groups welcomed the new "seller's packs", claiming that they could save money and time.

Under the scheme, due to start in 2007, anyone selling a home will have to produce a Home Information Pack. It will contain a host of documents, including a survey called a "home condition report", evidence of ownership and details of local authority searches.

The Government estimates that the cost to the average seller will be between £600 and £700. Because much of the information is currently paid for by the buyer, the additional cost to most people moving home will be £350, while first-time buyers are likely to save money.

The Government claims that the packs will reduce the £1 million that is wasted each day when potential buyers are forced to pull out after spending a small fortune on surveys, legal fees and searches.

Yvette Cooper, the housing minister, said: "Buying a home is stressful enough without losing hundreds of pounds on legal fees or valuations for properties that then fall through. It is crazy that over £1 million a day is wasted like this. Home Information Packs will save money and cut waste in buying and selling homes."

Critics of the packs, which will only be used in England and Wales, warned that buyers would be unlikely to trust a home condition report carried out on behalf of the seller.

There are concerns that their introduction could distort the housing market causing a glut of sellers before the scheme starts and a shortage afterwards.

The scheme could also be exploited by amateurish and unscrupulous inspectors.

Sarah Teather, the local government spokesman for the Liberal Democrats, said: "Home information packs will be a breeding ground for cowboys happy to ignore problems, or worse, not qualified to identify them. Most buyers will simply not trust the report of a home inspector paid by the seller."

The consumer group Which? supported the packs, claiming that they would take stress out of buying a home.

Jeremy Leaf, a spokesman for the Royal Institution of Chartered Surveyors, said: "If they are carefully introduced at the right time there are so many advantages for the consumer that there is no reason whey they should fail. It is an advantage for the first-time buyer, and four out of five sellers are also buyers."

He added that the packs should help to create more certainty and transparency in the home-buying process and they would reduce the risk of sales falling through.

How the Buying Process will Work

Who will need a Home Information Pack?
Anyone selling a home in England and Wales will need one in early 2007.

Why is the Government introducing the packs?
It claims that the current system, where many buyers spend hundreds of pounds on surveys, legal fees and searches only for the transaction to fall through, is unfair and prone to delays, stress and frustration. The Government also says the system is too slow, taking an average of eight weeks from an offer to the completion, compared to four weeks in other countries.

How much will it cost?
It will be up to the businesses offering the packs, although the Government suggests between £600 to £700. However, the real cost for most people will be a lot less because they will no longer have to pay for a survey or local authority search. The Government estimates that the additional cost will average at £350.

What will the pack include?
Copies of legal documents including replies to local authority searches; a home condition report based on a professional survey; terms of sale; evidence of ownership; replies to standard preliminary enquiries made on behalf of buyers; copies of any planning, listed building and building regulations consents and approvals; copies of warranties and guarantees for new buildings. Sellers of leasehold properties will also need a copy of the lease and details of the most recent service charges.

What is a home condition report?
It is halfway between a basic valuation and full building survey. It will be written in a standard format and include an energy efficiency report, a general description of the property and a description of any faults. People buying old or large homes are expected to pay for their own full survey in addition to the seller's home condition report. However, about 80 percent of buyers currently rely on a less detailed mortgage valuation and will have more information than before.

Who carries out the home condition report?
Inspectors who should be 'properly qualified' and registered. They will have to be covered by liability insurance.

When will a buyer see the seller's Pack?
Estate agents have to provide copies of the report to any potential buyers. They will be available on request usually after the first viewing.

How long is it valid?
If a home is taken off the market and put back on at a later date, the pack must not be more than three months old. However, parts of the pack such as the local authority searches could be out of date if houses take more than a few months to sell.

What impact will they have on the housing market?
There is likely to be a flurry of people putting their homes on the market before the introduction of the scheme, lowering prices. There is also expected to be a shortage after the scheme starts, increasing prices. The packs will deter casual sellers who want to test the water. They will make life easier for the first-time buyers.

Article in The Daily Telegraph dated 1st November 2005