The curse of COVID strikes again – implementation of the Home Survey Standard delayed
As a result of the lockdown imposed in response to the COVID-19 pandemic, the new RICS Home Survey Standard, which was due to be implemented next month has now been delayed until December 2020. Whilst this will allow practitioners more time to become familiar with the new standard, it causes an unwelcome disruption to the introduction of a measure that should provide greater clarity for both surveyors and consumers of what is expected when commissioning and conducting a home survey.
The aim of the Home Standard Survey
The Home Survey Standard is the result of an industry and consumer consultation launched by the RICS in April 2019. By carrying out an extensive review of existing guidance, the consultation found that there was a need for a set of mandatory requirements for RICS members and regulated firms in the UK who deliver any level of residential property survey.
The consultation found that both stakeholders and consumers saw a need for a consistent approach across the residential industry. The idea behind the creation of a set of mandatory requirements for all RICS members is that this should guarantee consistency and serve the changing needs of the market. The aim is to help improve the home buying and selling process, which can be complicated by the different products available.
The new Home Survey Standard
The Home Survey Standard was launched in November 2019 (RPC was involved in the drafting of the new Standard). It will be the sole standard for home surveys for RICS members and firms, replacing all previous guidance notes and statements for all levels of condition surveys in a complete over overhaul.
RICS hopes that this new simplified approach will help consumers "fully understand the importance and benefits of commissioning a home survey before purchasing a property".
The new Standard will improve communication between a homebuyer and their surveyor by including benchmarks that embrace new technologies and media. This will hopefully make it easier for everyday homebuyers to understand the results of their survey. Whilst it will put more responsibility on surveyors to be clearer about their observations and recommendations, it also will help develop increased trust between homebuyers and the profession. The industry hopes that more confidence in the surveys carried out as part of the conveyancing process will see a decrease in the number of renegotiations of the purchase price post survey, as well as fewer aborted transactions. A survey that is clearly set out and does not include any ambiguity can help guarantee the success of a deal.
How does this work in practice?
Prospective purchasers are given the choice between a Level 1, Level 2 or Level 3 survey, within which the services offered are standardised, and the language simplified. This is based on the previous system, which was set out as a three-tier system approach.
Given the similarity between the two systems, during the consultation members highlighted that the process and its implementation needed to be 'minimal'. This is also with a view to protect less sophisticated buyers and sellers who may be find themselves navigating the system for the first time.
The new Standard will be introduced in a market in which lenders are trying to cut costs and increasingly relying on automated valuations based on statistical trends – a situation exacerbated by the restrictions on inspection imposed to address the COVID-19. So often in these transactions, no surveyor enters the building to inspect the actual condition of the property. The new RICS Home Survey Standard will improve the accessibility and quality of information that homebuyers receive when they commission a survey.
The previous deadline of June 2020 means that some firms will already have implemented the Home Survey Standard. However, this extension provides some additional time to implement this change whilst managing the wider business implications of also responding to COVID-19.
RICS have also confirmed that they will continue to engage with the profession throughout this extended period to provide members with support in preparation of the forthcoming change.
A copy of the Home Survey Standard can be accessed here.