When it comes to buying a house, having as much information as possible will help ease any worries and contribute to you making a sound purchase.

At our recent ‘Ask the Expert’ event, our team of industry professionals provided guidance for first-time buyers, and discussed the different elements that they should consider when making a purchase.

On the night we were joined by Andrew Sykes, Partner at Shepherd Surveyors; Kathryn Murdoch, Associate Solicitor at Burnett and Reid; and Chris Hay, Mortgage and Protection Advisor, at Ledingham Chalmers Financial.

In our latest blog post, Andrew discusses how to get the most out of a Home Report.

What is a Home Report?

A Home Report is a document that provides buyers with useful information, such as the state of the property and its structure, prior to the sale of a property. In Scotland, it is a legal requirement for all sellers to produce a Home Report, prior to them putting their home on the market.

A chartered surveyor, who is a member of the Royal Institution of Chartered Surveyors (RICS) and is a registered valuer, will produce the Home Report.

Home Reports are created to give peace of mind to everyone involved in the purchase and will ensure that nobody is left in the dark once a property transaction is underway.

What is included in a Home Report?

A Home Report includes a Single Survey, an Energy Report (including an Energy Performance Certificate) and a Property Questionnaire – with the latter filled out by the seller.

What is a Single Survey?

A Single Survey is essentially a report on the general condition of the property, taking a range of aspects into account, including windows, gutters, walls and roof. By collating this data, the Single Survey then provides a valuation of the property in its current condition and a sum for the purposes of insurance.

The first section of the Single Survey includes a description of each element of the property - what are the walls made up of, what type of windows, what is the heating etc.

Each component assessed will be given a conditional rating which ranges from 1 to 3:

Category 1: Is good - there are no issues and no immediate repair is needed.

Category 2: The item will require future attention, which could either mean repair or replacement. This could be minor issues, like weeds in the guttering, but could potentially be something quite costly, like defective double glazing seals to windows.

Although category 2 does not require immediate attention, it is advisable that a buyer receives quotes for the work at hand prior to making a purchase.

Category 3: This is a significant concern and urgent repairs or replacements are needed now. This could include decay or structural movement within the building. If there is a category 3 on the Single Survey, it’s advisable that you know what the consequences are before you make an offer.

When faced with a category 3, it is likely that you’ll need to get a timber and damp report or a structural engineer's report. Category 3s are rare in a Home Report as sellers know that this is likely to put a buyer off.

Should you avoid properties with category 2 repairs?

In short, no you shouldn’t.

Old houses or properties will have more category 2s reported, as generally, older properties will need more maintenance. For example, unless a property which has been built in 1900 has been reslated in the last 2 years, I would always make it a category 2.

Another example is that you might well get a category 2 for dampness, which you of course would want to get investigated, but it might be that a major repair is not required. Quite often, you get plaster rubble building up behind a wall, causing small areas of dampness.

Why should I consider a property that requires some TLC?

I’ve noticed a trend in recent years, where there has been an increase in demand for pristine properties. People are looking for a home that is in walk-in condition, so if you go for one of those, there may well be competition and you will either have to pay more or lose out.

When a property is listed on ASPC, the interest in it is most likely to be at its peak at the start and if several potential purchasers are interested you’re most likely going to enter into a competition and the property will likely go to a closing date.

If a property has been on the market for a few months or longer, there is much more chance of being able to buy that property below the Home Report valuation. So don’t just look at newly listed, pristine properties - look at properties that have been on the market for a while too.

Recently, I noticed a number of 2 bedroom homes on a particular street coming on the market and quickly selling at around £120,000, but there was also one that needed updating a little. The improvements were mainly decorative but the property did need new windows and the garden was overgrown and needed to be cleared out. It wasn’t well presented for marketing and as a result, this property sold for £90,000.

Based on the size and property type, I would say that you could easily spend less than the £30,000 difference to bring the property up to a decent standard, making it a worthwhile investment.

What is an energy report?

An energy report will include information on the energy efficiency of your property but will also include recommendations for improving the efficiency, in an attempt to save energy - and therefore money.

In the past, these reports were largely ignored but with the recent increase in utility bills and the UK’s attempt to achieve net-zero, the EPC is going to become more important.

Similar to when you buy a washing machine or fridge freezer, your home will get an energy rating from G to A, G being the highest and A being the lowest. The lower the EPC rating, the less energy you will use, which will equate to lower utility bills.

What is a property questionnaire?

A property questionnaire is completed by the seller and will include further information for prospective buyers. This could include things like council tax bands, planning permission or access rights, but can also include information about repairs or services.

For example, there could be information about a major roof repair that has recently been completed, which would be a positive factor when making a decision.

In conclusion, one of the main reasons for bringing in the Home Report was to increase the information available to a buyer before they made a purchase. If you read your Home Report before and after viewing a property, and discuss the content with your solicitor, you will be in a good position to make an informed decision on whether or not to put in an offer.

You can watch the webinar in full and on-demand here.