Revised Home survey standard to offer greater clarity

RICS' Home survey standard aims to ensure the highest quality of service, meet changing consumer needs and foster trust in surveyors' work. As the residential sector evolves, though, reviews of this important standard are necessary.

Since the publication of the first edition in 2019, the standard has been monitored to assess its effectiveness and how it benefits consumers and members, and RICS is now working on a second edition to reflect the changing market.

The assessment found that some consumers were not satisfied with the service they had received from a home surveyor, mostly regarding the accuracy and timely receipt of the report.

Although claims against surveyors can prove unwarranted and represent a small percentage of the total number of surveys undertaken, this information provides valuable insight into why people raise concerns in the first instance.

It can also be used to increase consumer awareness about the remit of home surveyors and form a basis for future CPD and identifying market trends.

Feedback from TPO and CEDR indicated that, in general, the current Home survey standard is appropriate in its level of detail but requires greater clarity in some areas.

For the second part of the review, RICS worked with Savanta – a nationally recognised market research company – to obtain feedback from around 1,400 people who purchased a home or commissioned a home survey in the past five years.

As well as enabling comparison with similar research that was undertaken for the first edition of the standard in 2018, this consumer data showed that home survey information is highly valued in negotiating purchase prices, allowing homebuyers to budget for works or obtain more specialist reports on issues such as structural defects.

Significantly, the data suggested a clear misunderstanding of what a mortgage valuation provides compared with a home survey: 72% of respondents to the consumer survey believe that a mortgage valuation is a condition-based report or don't know its purpose.

This is a major concern, as mortgage valuation is solely for lenders to assess risk and is not designed to provide consumers with condition-based advice.

To many in the sector, this finding may be unsurprising; but with even fewer physical inspections being undertaken for secured lending, it is important that prospective homebuyers are educated in this regard.

When asked what information respondents would find useful when buying a property:

• 51% said advice on problems with the property and likely repairs (compared with 49% in the 2019 survey)
• 44% said energy performance certificates (EPCs) (compared with 35% in the 2019 survey)
• 43% said a survey completed by the seller, at their expense, would be beneficial (compared with 39% in the 2019 survey).

Respondents who had commissioned a survey said that they took the following actions upon receiving the report:

• 25% began budgeting for necessary works to the property
• 23% negotiated the property price based on the survey
• 21% sought further investigation by different professionals (e.g. a structural engineer).

RICS is working with key stakeholders in the sector to promote the importance of RICS home surveys to ensure prospective homebuyers can make informed decisions.

The residential sector must continue to educate consumers about what home surveys offer, any remedial actions needed and the benefits of appointing an RICS-qualified surveyor to undertake the work.

For the third part of the review, RICS conducted a parallel survey of its members to gather their views on the first edition of the Home survey standard, to inform the level of update required.

Of the 325 who responded, 58% considered the level of detail in the standard to be appropriate, while 31% consider it not prescriptive enough.

A common concern across responses to both the member and consumer surveys was that more delineation is required between the three current levels of survey and what each level offers.

When the first edition was being drafted, the sector's use of artificial intelligence and technologies such as drones and camera poles was still limited. With these advances evolving at pace and being adopted more widely, it is important that guidance is updated to ensure surveyors can adapt to and benefit from new working methods.

Homebuyer behaviour is also changing, with a greater awareness of climate change, the impact of increasing energy bills and the need to buy or improve homes to cope with future environmental risks and energy demands.

The Home survey standard will remain the core framework for RICS members and regulated firms; but some surveyors are looking to enhance surveys with additional offerings such as retrofit assessments, so the second edition of the standard will need to take account of this.

The standard will continue to focus on surveyors acting within their own competence. Although this is already emphasised in the overarching RICS Rules of Conduct, more attention will be given to special property types – including complex, protected and significantly retrofitted homes – and the need to understand specialist types of construction.

The standard will provide a clearer framework to ensure that surveyors continue to work within their areas of knowledge and competency and provide flexibility for services to meet with homebuyers' needs.

Respondents are reminded to have fully read all consultation documents, and to consider both the context of the work undertaken and the consumer experience, to ensure views remain informed and impartial.

RICS welcomes clear and considered feedback on this important and emotive standard. Every positive, negative and constructive comment will be read by the working group to ensure the final version considers as many opinions as possible.

The consultation closes on 30 September.