HOUSING industry leaders have called for urgent reform of controversial Home Reports they believe are strangling Scotland's property market.

Bodies representing estate agents and lenders joined forces last night to call for a rethink of the costly packs, which replaced surveys five years ago just as house sales turned from boom to bust.

The National Association of Estate Agents in Scotland (NAEAS) and the Council of Mortgage Lenders (CML) agree the reports, which require a revaluation every three months, are putting off would-be sellers.

The number of homes changing hands, although up 5% in January-March from a year before, are way below peaks seen before the credit crunch.

David Mackie, NAEAS's head, said: "It took five years from when they first dreamed it up to when it was finally implemented, by which time the market had become quite weak.

"It's ideal for a fast-flowing market, but when the market is sluggish and you never know what house prices are going to do from one month to the next it doesn't work. It reduces the number of properties coming onto the market."

He added that in the present market circumstances, sellers are not prepared to pay hundreds of pounds up front to put their house up for sale.

Kennedy Foster, CML Scotland policy consultant, said: "The Home Report was designed for a buoyant housing market – clearly not what we're in now. There definitely needs to be a review."

The Conservative-led UK Government has already abolished Home Information Packs – although these were never the same as the Scottish scheme. All that sellers in England and Wales now require is a £65 energy report – compared with £480 for a Scottish Home Report, which includes a mortgage valuation that must be updated every 12 weeks.

Scottish Tory housing spokesman Alex Johnstone said: "It's patently obvious Home Reports aren't fit for purpose and just another barrier to people selling their properties. I'm interested to hear these calls from the industry, because we opposed their introduction from the outset."

The Scottish Government has said it will review Home Reports on their fifth anniversary in December.

The main issue for lenders and estate agents is the repeated valuations, which can force sellers to run up substantial bills if their property, like many on the market, does not sell quickly.

But Mr Mackie believes the Home Reports – which replaced a system where buyers could pay for multiple surveys – are driving down prices.

He said many solicitors and mortgage brokers were advising clients to make offers from about 10% below the report valuation. "The value in the Home Report is regarded by many as the maximum value, but it's nothing more than a matter of opinion," said Mr Mackie.

"The old system allowed every property to find its own level. You had numerous people going after [a property] and they all got different surveyors out, and different surveyors had different thoughts, but the highest offer won. Now, most sales that go through are shy of the valuation level."

He added that in many cases minor defects highlighted in the Home Report discouraged prospective buyers from even viewing a property.

However, Home Reports have their defenders. Sarah Speirs, director of the Royal Institution of Chartered Surveyors Scotland, said Home Reports were prepared to a "strict mandatory set of valuation standards".

She added: "The Home Report is not restricting the market, but providing purchasers with detailed information to ensure they are fully aware of all the facts relating to condition and value before committing themselves to what is probably the largest financial decision they will make.

"It has also been well received by sellers as they view it as a positive marketing tool with no hidden surprises when it comes to progressing an offer."