Summaries of factual information which were contained in papers submitted to Ministers are set out below.

The analysis of that information is exempt under Section 29 of the Freedom of Information (Scotland) Act 2002 (see covering letter).

Extract of factual information from Paper dated 29 July 2008 `Responding to the Changing Economic Climate'

3 The introduction of the Home Report is currently scheduled for 1 December. This date was agreed with housing market stakeholders as a time when the market would be at its quietest. From that date, sellers placing their home on the market will be required to provide a Home Report, including a survey, to all prospective buyers.

4. The passing of regulations in February was seen as the green light by the industry for investment and preparations are now well in progress, including training already delivered to 1,200 selling agents as part of a programme which we have taken forward in collaboration with the professions. The Law Society itself (despite its public opposition to the policy) is developing a branded Home Report product in partnership with one of the major prospective Home Report provider firms. The Edinburgh Solicitors Property Centre has invested in, and publicised, MoveMachine as a major provider. We understand that the Glasgow Solicitors Property Centre is in the process of investing in a Home Report product and is confident of being ready for introduction on 1 December.

5. The main benefit of the Home Report is that buyers have sound information on condition, value, energy efficiency and accessibility before making an offer. This protection for buyers is all the more important in a difficult or declining market, especially for first-time buyers. The initiative has strong support from consumer groups, disability bodies and - as a key policy tool for improving the energy efficiency of the housing stock - environmental groups.

6. The Home Report is likely to cost sellers upwards of £350 depending on the house. Without it, sellers would instead have to commission a separate Energy Performance Certificate at a cost of £50-100 when European requirements come into effect in January, and buyers would have to commission at least a survey for valuation purposes. Various payment options for the Home Report will be made available to sellers by Home Report providers, including deferred payment. The cost to sellers will, however, be offset by a saving to house buyers.

7. First-time buyers will particularly benefit as they will save on average between £200 and £300 on the cost of buying a home. 90% of sellers are also buyers and so will benefit from receiving a Home Report.

8. The Law Society and some selling agents have argued that delaying introduction will ease pressures on the market, sellers and selling agents. On the other hand, Home Report providers, chartered surveyors (many of whom have invested heavily in preparing for the new system) and others have urged very strongly that we continue with implementation on 1 December. The Council of Mortgage Lenders' Scottish representative has commented that any impact of the Home Report on the market will be insignificant compared with that of changing economic conditions.

Extract of factual information from Paper dated 5 August `Responding to the Changing Economic Climate: The Home Report'

Background - Factual Information and Analysis

Policy purpose

2. The Home Report policy is intended to give buyers better information before they make the crucial decision to offer for a property. Getting better information about house condition into the buying and selling process will contribute to the underlying policy aim of addressing the estimated £5bn of disrepair in Scotland's privately owned housing stock.

The Housing Market

3. The housing market is facing unprecedented pressures, stemming (as the Crosby review notes) from the drying-up of securitisation for mortgages, which in late 2006 was supporting two thirds of new mortgage lending. This has had a significant impact on both the cost and availability of mortgages. Council of Mortgage Lenders (CML) figures show the average interest rate on a fixed rate mortgage as 5.81 per cent in May 2008, up from 5.55 per cent in May 2007 and 5.02 per cent in May 2006. Mortgage arrangement fees have increased substantially to an average of £900. Mortgages for 100 per cent or more of the house price have disappeared, with higher minimum deposits now required. This has led to uncertainty amongst buyers and sellers, a significant increase in available housing for sale coupled with a slowdown in houses sales and emerging evidence of transactions failing at a late stage. While we do not yet have evidence of a general fall in house prices in Scotland, price rises have slowed dramatically. Rapid fuel and food price inflation has also reduced the income available to support mortgage payments.

4. The impact on the Scottish and UK housing markets is clearest in relation to activity levels. The number of new mortgages approved in the UK fell by almost 70 per cent between June 2007 and 2008 (Bank of England). These figures are not disaggregated for Scotland, but CML figures for May 2008 show that the number of loans for house purchase fell by 34 per cent in Scotland on the previous May (against a 44 per cent fall in the UK). The interim Crosby Report suggests that the market may not recover for 2 or 3 years. There is now likely to be significant over-capacity in the property industry, which expanded in an era of high transaction levels and price rises.

5. The length of time that properties are staying on the market is of particular interest in relation to the Home Report. There are no available figures for Scotland but figures from Rightmove (the largest UK property market website) for the UK suggest that the average time on the market has risen from around 74 days in June 2007 to around 83 in June 2008. The ESPC suggests that a similar change is true in the east of Scotland with the average time on the market rising by about 10 days.

Stakeholder positions

6. Most stakeholders are now focussed on implementation, with the exception of the Law Society, which has consistently opposed the policy and has made representations to the Cabinet Secretary for Justice asking for delay. Other calls have included articles and letters in the press, mostly from solicitors and around 15 letters to Ministers from solicitors and selling agents. Two press articles by property professionals have called for implementation to go ahead on 1 December. In the Stakeholder Implementation Group there have been calls for certainty on the implementation date of 1 December from RICS, CML and SCC which issued a strong news release on 30 July in response to rumours of delay. Environmental NGOs have supported introduction because of the potential energy efficiency benefits. Companies gearing up to implementation have not gone public due to commercial confidentiality issues.

Paper dated 14 August 2008 ` Home Report Implementation Group - Stakeholder Positions and Activity'

Royal Institution of Chartered Surveyors

Law Society

National Association of Estate Agents

Council of Mortgage Lenders