Mortgages Home Condition Reports Will Not Be Mandatory

Mortgages Home Condition Reports Will Not Be Mandatory



Mortgages .​
Home Condition Reports Will Not Be Mandatory
You may have heard about the​ introduction of​ the​ Home Information Packs starting in​ June 2018 .​
One controversial part of​ the​ Pack was to​ be a​ Home Condition Report,​ a​ mandatory survey that the​ seller of​ the​ property would have to​ have carried out in​ order to​ sell the​ property .​
However,​ although the​ Packs are going ahead,​ the​ Home Condition Report won’t be a​ compulsory part of​ it.
So firstly,​ what exactly is​ the​ Home Condition Report? It’s the​ same as​ a​ survey,​ but instead of​ the​ buyer having a​ survey done after making an​ offer and having it​ accepted,​ the​ seller has to​ produce the​ Report to​ verify the​ structural state of​ the​ property .​
This means that buyers will have a​ lot more information about the​ property from the​ outset,​ and it​ should help reduce the​ amount of​ sales that collapse mid-process .​
In fact,​ it​ has recently been estimated that £1 million is​ lost every single day in​ costs relating to​ house sales that fall apart.
Less than a​ quarter of​ all homebuyers have a​ survey anyway – instead choosing to​ depend on​ the​ valuation carried out by the​ mortgage company .​
Many purchases fall through simply because the​ valuation comes out lower than the​ purchase price – often because they pick up on​ property defects that could potentially develop into a​ serious matter .​
Valuations don’t come cheap,​ so the​ buyer will be out of​ pocket,​ and the​ money is​ effectively lost .​
The Home Condition Reports could go a​ long way to​ alleviating this common situation.
The decision to​ hold back from making Home Condition Reports mandatory has not been popular in​ the​ industry .​
a​ number of​ home information pack providers have been set up to​ meet the​ new demand,​ and they have invested heavily in​ new computer systems and developing networks of​ surveyors who will be carrying out the​ home condition reports .​
They stand to​ lose out for the​ foreseeable future,​ especially as​ Home Condition Reports will be an​ expense to​ the​ seller .​
It is​ likely that most sellers will not be interested on​ taking on​ yet another cost.
It’s bad news for the​ 4,​400 people that trained to​ be Home Inspectors too .​
Once assured of​ a​ decent job,​ the​ demand for Inspectors is​ not going to​ be anywhere near the​ levels that they would have been,​ had the​ Reports been made mandatory.
It’s bad news again for first time buyers – they will still need to​ fork out for the​ valuation and,​ if​ they can afford it,​ the​ survey.
Building societies will be happy about the​ decision however .​
84% of​ those surveyed believed that the​ Home Condition Reports would have a​ negative impact on​ the​ housing market .​
That would cut into their profits,​ of​ course.
So why have the​ Home Condition Reports not been made mandatory? the​ Government say that by making them voluntary first,​ they will be able to​ see how well the​ process works,​ allowing them to​ make a​ more informed decision in​ future .​
They are also keen to​ avoid rocking the​ housing market from its currently buoyant state.
Sceptics suggest that it​ is​ a​ political decision – with the​ election looming,​ the​ Government won’t want to​ take any action that could result in​ stalling the​ market,​ thereby losing some potential votes.
Which? Campaigns Director Nick Stace wrote,​ in​ a​ letter to​ Ruth Kelly,​ the​ recently appointed Secretary of​ State for Communities and Local Government: It seems extraordinary that the​ first major decision by your new department is​ to​ reduce the​ consumer benefits of​ a​ flagship policy because you​ have come under pressure from the​ industry,​ including estate agents.
According to​ Nick Stace,​ estate agents are the​ second most distrusted profession after politicians,​ and does not support the​ decision to​ exclude the​ Condition Reports from the​ Packs.
Watch this space to​ see what happens next.




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