EARLY next month the Monopolies and Mergers Commission will report on

the housing surveys industry. The report concerns a cost most house

buyers have to incur before they purchase a property -- a professional

survey into its physical condition and likely value. Such surveys vary

in cost and quality depending on what the surveyor is asked to do and

how well he or she does it. They are indispensable to buying most houses

secured on mortgages, for lenders would not advance their money until

they had some informed statement of a property's condition. That survey

has to be paid for by the borrower and, until recently, it was rare for

most lenders even to let the borrower see it, though for more than a

decade now most lenders have been at least willing to provide a summary

of the contents.

Lenders would also often say why they would refuse to lend when the

survey report was unsatisfactory, but really a would-be purchaser was

always best advised to commission a survey of his own. This is an

expensive process especially when it has to be repeated, for a positive

survey is no guarantee that a bid based on it will succeed. Many buyers

are faced with the cost of several surveys as the preliminary to bidding

for several houses. And what if the survey is inadequate, or even

fraudulent? Surveyors were rather slow to admit liability for errors in

the past, when the matter involved is more one of judgment than fact.

That has changed; surveyors are willing to accept some degree of

liability when they have made a glaring error. Fraud is a different

kettle of fish.

The Council of Mortgage Lenders has just called for the surveyors'

professional body to establish a compensation scheme, similar to that

provided by lawyers, to compensate victims of negligence or fraud in

this area. The Royal Institute of Chartered Surveyors rejects this and

favours buyers adopting the two-survey system (as their needs are often

quite different from those of the lenders). That is the expensive

option. Surely the same property should not require two costly surveys?

It is a contentious matter, but buyers will not be in much doubt about

its resolution. The MMC still has time to pronounce upon it

specifically.