When it comes to buying a property, it’s important to find out as much as you can about a property, as this may be one of the biggest investments you’ll ever make. In Scotland, Home Reports (HR) are helpful in allowing buyers to make an informed decision about their chosen property. 

In this guide, we’ll take you through a Home Report to help you make your purchase decision with confidence.

What is a Home Report?

A Home Report contains three documents that provide information about a property. The seller is responsible for the provision of the HR, but in practice, the HR is generally prepared and published by valuation surveyors on behalf of the seller.

Each HR contains three sections: 

• Single survey
  • This is made up of three parts;

1. The terms and conditions under which the surveyor supplies the information contained in the HR.
2. The single survey, containing information on the scope of inspection, condition of the property, accessibility information, and a report on valuation and conveyancer issues.
3. A mortgage valuation report.

• Property questionnaire

This section is completed by the owners of the property. It contains information on various matters relating to utility suppliers, council tax band, parking, factoring and any alterations to the property. Its purpose is to give interested parties information on day to day matters regarding the property, supplied by the current owners.

• Energy Performance Certificate (EPC)

This part of the Home Report confirms the property’s energy efficiency rating.

Is a Home Report required?

The requirement to produce a HR is imposed on sellers by Act of The Scottish Parliament, and is therefore compulsory. There are several exceptions to this, but the exceptions are only rarely come across. Sellers are also under a statutory obligation to provide a copy of a HR if reasonably asked. Organisations such as ASPC and the other property centres provide an online ability to see HRs of properties to prospective purchasers, avoiding the need for owners to provide what is a fairly lengthy document.

Using the Home Report for information

A Home Report is a sizable document, and it may help to point out the most relevant parts, to avoid having to read every last paragraph.

The terms and conditions are probably worth reading once, as it is important to be aware of the limited exposure of the property for inspection, and thus the level of detail given by the surveyor in the report. There are many qualifications and limits explained in the report, justifiably so, given the conditions under which the surveyor carries out an inspection. Flat roofs are not routinely inspected, nor are electrical circuits or drains and pipes. As a guide, if the surveyor can see and inspect something, some expression of condition can be expected to be given. 

It is, however, important to stress that a HR is a limited source of information on certain areas of a property. It is not a warranty document. It is a useful source of information, which, if read carefully can raise points to pursue further, using your solicitor to raise questions with the seller’s solicitor.

The EPC is also worth attention, as it not only shows the current rating, but also indicates what might be or could be done to improve the rating. In our area, EPC ratings can be mediocre for traditionally built homes, with only limited scope for improvement. More recently built homes tend to have improved ratings due to modern standards of insulation and heating.

For most people, once familiar with HRs, sections 2 (condition) and 4 (valuation and conveyancer issues) are where the most sought information is found.

Section 2 details what the surveyor has seen, usually accompanied with a few words on condition. It also allows a careful reader to surmise what has not been seen. This latter point can be significant, if one has seen the property, and finds no mention of a point in the report.

Section 4 contains two “valuations”. One is an assessment by the surveyor of the “market value”, the other is the mortgage valuation. It is common to find each figure matches the other, but it does not automatically follow.

Market value is a considered opinion, by a surveyor using their knowledge and experience of the local area market of what a property is likely to sell for on an open market between willing buyer and seller.

Mortgage valuation is a considered opinion by the surveyor of what a mortgage lender could reasonably use, as a base figure to calculate the amount of secured loan for a borrower. For example, if a mortgage valuation is stated as £200,000, and a borrower is assessed by the lender as a good risk, and can be granted a 90% mortgage, the loan will be set as a maximum of £180,000.

One point to note, however, is the case where the same property is actually bought for £190,000, the loan will be 90% of £190,000 = £171,000.

The HR is often the starting point for home seekers. It can be helpful, but it should not be regarded as the full picture. It is a very helpful baseline, particularly in helping to compare similar properties. Although a professional – the surveyor - has inspected the property, the HR is limited in its scope and, when visiting a possible contender for your new home, you need to be vigilant and take a good look round, particularly externally.

Questions regarding points arising can be discussed with your solicitor and may be suitable for further investigation. Once satisfied on any outstanding points you should be able to make the decision to go for a particular property, or not.

At ASPC, we are passionate about helping buyers, sellers and renters across the North East find a home that best suits their needs. From the initial search to the keys being handed over, our dedicated team is here every step of the way.

To help make the process of buying your new home as seamless as possible, we’ve created a range of insightful blog posts and information pages. Browse our helpful home buying guide here, or if you have any further questions, please get in touch with one of our team members on centre@aspc.co.uk.