Close examination

The government has four main objectives in introducing reform of the home buying and selling process in England and Wales though home information packs (HiPs). These are:

• Ensure first time buyers, struggling to get their first foot on the property ladder, get HiPs for free.
• Cut waste and duplication by preventing several prospective buyers paying again for the same searches and surveys when sales fall through.
• Provide quality reliable information at the beginning of the process and cut failed transactions which currently waste £350m each year.
• Include energy performance information in the home condition reports (HCRs), preventing the need for a stand-alone survey.

RICS supports these aims. More information up front should mean better informed sellers, estate agents, lawyers and prospective buyers. This should help to cut down the amount of transactions that fall through and thereby save on wasted expense in abortive professional fees. Much of the cost of the HiP exists within the current system. Almost every home buyer and seller in the country should benefit. Few would quibble with these objectives, although some certainly question whether the reforms will achieve their aims. Rather more are starting to raise concerns over whether there will be enough home inspectors to achieve the stated implementation date of June 2007.

The most significant new element is the HCR. From June next year all properties (with very few exceptions) will require an HCR to have been prepared by a registered home inspector and included within a HiP before the property can be placed on the market. The question which is being asked increasingly loudly is will there be enough of these home inspectors to enable the 1.8 million homes that are marketed on average every year in England and Wales to come onto the market without delay?

In order to qualify as a home inspector, all candidates, whether experienced chartered surveyors or new entrants into the field, have to go through the same assessment process and obtain a Diploma in Home Inspection (equivalent to an NVQ level 4) at the end of it. New entrants, understandably, have a far greater learning requirement and will generally need to spend about 12 months undertaking an intensive training course, in addition to gaining practical experience.

In 2001, the government estimated that around 7,000 home inspectors would be required to produce HCRs. In May 2006, the Department for Communities and Local Government, which has responsibility for these reforms, revealed that it has downgraded the estimated numbers to between 5,091 to 7,429 and that the actual number required is 'likely to be lower than the upper range estimate'.

So far, the numbers of practitioners coming forward for assessment have been encouraging, but not overwhelming. About 4,000 people are registered with Assessment Centres (a pre-requisite first step for achieving the qualification). However, only a small number have actually completed the qualification. On the plus side, most larger surveying firms are extremely well organised and are set to put their entire workforces of chartered surveyors through the qualification process in time for June 2007. These large surveying firms will in all probability employ at least half of all qualified home inspectors.

Interest from new entrants from a wide range of former occupations has been very strong. All training courses are fully subscribed, thus placing a finite limit on the numbers who can qualify through this route in time for June next year. A few hundred new entrant home inspectors should be qualified in time. Again, all very positive and a tick in the box for meeting the government's objective of opening up the home inspector market to a wider group of individuals beyond the existing professionals in the field.

The remainder of home inspectors will need to come from existing surveying practitioners in smaller practices. Currently about one in five of all purchasers takes professional advice on the condition of the property they are buying over and above a mortgage valuation (which is provided primarily for the benefit of the lender). This is a five-fold increase in business for all those residential surveyors who get themselves trained, assessed and registered as home inspectors. Since they are already in this market place and hold a chartered qualification that has strong brand identity, chartered surveyors are very well placed to take advantage of the reforms. However, uptake from practitioners in smaller firms has been far more mixed.

Practitioners in smaller practices probably face similar pressures, whatever profession they are in. The need to keep current fee-earning time up means that the sight line for preparing their business for the future is often far shorter. It is far more difficult to release staff for training, particularly when, as is the case with home inspection, the occupation and fee-earning potential doesn't yet exist. The total costs '“ including the loss of fee-earning time '“ bear more heavily on small firms. There is also the fear of the 'Tesco effect' '“ that smaller firms will find it more difficult to compete against the larger corporate style firms. Couple this with an element of professional pride in being required to 're-train' for a job that many chartered surveyors have effectively been doing for years, an understandable 'chicken and egg' situation has built up.

The new market for HCRs could be at least £600 m per year '“ more than enough to go around all sizes of practices. Smaller firms are well placed to deliver a local service to tight delivery timescales and to be able to take on specialist and difficult cases. Local links between solicitors and chartered surveyors are often strong, and the advent of HiPs creates an opportunity to strengthen those ties further.

RICS is encouraging the profession best placed to deliver HCRs to rise to the challenge. Government too should play their part by helping make the new assessment process more efficient and less bureaucratic.

• To enquire about becoming an home inspector, visit www.rics.org/safeas or call 0870 333 1600