Hansard

If I may, I will make some remarks now, convener. I am delighted to have the opportunity to discuss with the committee these regulations, which are laid under part 3 of the Housing (Scotland) Act 2006. They are not only about the much discussed single survey; rather, they introduce a package of three documents to the house buying and selling process. We have decided to give those three documents the collective title of "the home report". It will provide home buyers with more information about the condition and value of a house than they have ever had before. As the 2006 act places the duty to provide the documents on the sellers, first-time buyers will get them for nothing, which will save them time and money.The regulations mark a major step in the implementation of a significant improvement to the process of house buying and selling in Scotland. As the committee is aware, the proposals that they help to implement stem from recommendations on the single survey that the housing improvement task force made in 2003.The task force identified three purposes behind the introduction of a single survey: to provide better information about the condition and value of a property than is provided by the mortgage valuation inspection that 90 per cent of home buyers currently rely on; to address the incidence of multiple surveys and valuations; and to address the practice of setting artificially low upset or asking prices, which can draw buyers into spending time and money considering properties that they subsequently discover they were never able to afford from the outset.In the previous session, members of the Parliament, and of the Communities Committee in particular, spent considerable time discussing the merits of the single survey. After coming to power in May 2007, the Scottish Government took stock of the policy in the light of the consultation on the draft regulations and the developing circumstances in the housing market. Last autumn, I met representatives of the various stakeholder organisations on the purchasers information advisory group, which includes selling agents, conveyancers, surveyors, lenders and consumer groups. It became clear to me that the underlying rationale for the policy, as proposed by the housing improvement task force, was as strong as ever.It is unarguable that a prospective buyer should have good professional information about the condition and value of a house before deciding to make an offer on it. The Scottish Government has continued to develop the regulations, taking full account of the outcome of the consultation and working closely with members of the purchasers information advisory group.The Housing (Scotland) Act 2006 requires that the seller, or the seller's agent, must make a copy of the prescribed documents available to prospective buyers on request. The regulations prescribe those documents and make other provisions about how and when they should be provided. The prescribed documents are a single survey and energy report, and a property questionnaire. Together, the documents will comprise what is called a home report. We decided to use that name rather than "purchasers information pack" because the information will benefit the seller as well as the purchaser and the documents will not form the weighty pack that was proposed initially by the housing improvement task force.Although the date on which the regulations come into force is 1 October, the date from which sellers will have to provide a home report will be different. I intend to make a commencement order for the relevant section of the 2006 act so that the seller will have a duty to provide on request the prescribed documents from 1 December 2008. We have chosen that date on advice from the advisory group as it is traditionally a quiet time in the housing market. I do not propose to go into all the details of the regulations, but will instead highlight the changes that have been made to the draft regulations that were the subject of the consultation paper in February 2007. Before doing so, I should make it clear that members of the advisory group have said that they are content with the changes that have been made to the regulations and have been fully involved in the development of the prescribed documents that are detailed in the schedules.The "permitted period" in regulation 3 is the maximum period that may elapse between a prospective purchaser requesting the prescribed documents for a house that is on the market and the seller or the seller's agent providing them. The consultation paper proposed a period of seven days. Responses suggested that there was some doubt about the feasibility of such a period at holiday times; we have therefore substituted the period of nine calendar days.Three documents are prescribed in regulation 4: the single survey; the energy report; and the property questionnaire. The first two documents form the survey report, but for clarity, I will refer to them separately as "the single survey" and "the energy report". The single survey is covered in part 1 of schedule 1 and includes detailed information on the property's condition, accessibility information for the property and an open-market valuation. Although a number of stylistic and minor changes have been made to the single survey, the core content of the document has not changed materially from the version included in the draft regulations that were the subject of consultation. The single survey report format in schedule 1 to the regulations is based on a survey product used by Colleys surveyors, a subsidiary of Halifax Bank of Scotland. The energy report will contain up-to-date information, as listed in part 2 of schedule 1. The list includes all the information required to produce an energy performance certificate under the European energy performance of buildings directive, together with further information that will help prospective buyers to make their purchasing decision and the eventual buyer to manage the environmental impact of the house into the future. By specifying the list of information in that way, we have made sure that the data collected by the surveyor will allow production of both the energy report and the certificate, avoiding the need for two separate inspections.The concept of the property questionnaire in schedule 2 was suggested initially by a Law Society of Scotland representative on the advisory group. Many solicitors firms already use their own version of such a document. It will give prospective purchasers, surveyors and solicitors useful information about the property. Some of that information might still require to be confirmed formally during the conveyancing process, but identifying it at an early stage will alert all concerned to relevant issues about the house. At present, all too often such issues become apparent at the final stage of concluding missives, leading to delays and knock-on consequences for both buyer and seller.The next regulation that has changed since the consultation draft is regulation 6. The proposal that the prescribed documents should be no more than 12 weeks old when the property is brought to the market remains unchanged, but we have added a rider to meet a concern raised by a Law Society member of the advisory group. The regulation now effectively disregards any period of less than 28 days when the house is taken off the market. That avoids the risk of the seller having to commission another survey if a sale falls through or if they have taken the house off the market during a holiday period.Regulations 7 to 14 specify exceptions to the duties to possess and provide prescribed documents. The exceptions include new and recently converted houses, houses that are unsafe or due to be demolished, portfolios of houses that are considered to be commercial transactions, seasonal or holiday homes as defined by planning legislation, mixed sales such as farmhouses and dual-use properties such as bed and breakfasts.Only one of the exceptions listed in the consultation draft of the regulations has been amended: the exception in regulation 14 for converted properties. The consultation proposed an exception for properties in the process of being converted, with the duties coming into effect once the house was physically complete. The revised exception from the duties in the 2006 act is for the first sale, but not subsequent sales, of a converted house. Essentially, the regulations now treat converted properties in the same way as new-build properties. That position was reached after extensive discussion with the advisory group. The primary reason for the change was the fact that most conversions are, like new houses, marketed and sold at an early stage to give the developer a sufficiently secure basis on which to proceed with the work.Other than the changes that I have highlighted, the regulations remain as proposed by the previous Administration in the consultation paper on the draft regulations. The complete package has been thoroughly considered and discussed with the key stakeholders. In our view, it provides a workable and valuable improvement to the Scottish system of buying and selling houses.