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Mr. Andrew Rowe (Faversham and Mid-Kent): As my hon. Friend knows, this is not one of my specialist areas, but my experience over many years as a Member of Parliament and a buyer and seller of houses is that one of the big obstacles is the fragility of the chain. Five, six or seven people with transactions may be involved in a chain. As far as I could tell from what the Minister said, the magic pack will do nothing about that, or have I misunderstood?
Mr. Waterson: I do not want to do the Minister's job for him, but I suspect that he would say that if it is to be compulsory to have a seller's pack, everyone in the chain will have one. If people can pick and choose, there will be no improvement. We do not believe that the seller's pack will help people, whether they are in a chain or not. I hope that I have read the Minister's briefing on that point fairly.
I am tempted to say that this measure is a large sledgehammer to crack a small nut, except that the nut is signally absent. The Bill does not--I repeat, does not--tackle gazumping.
I do not deny for a moment that gazumping--or indeed its ugly sister, gazundering--is a problem. It is distressing and costly for those involved. Some have advocated a move to the Scottish or the continental system, whereby acceptance of an offer immediately imposes contractual obligations. That was mentioned by my hon. Friend the Member for Hertford and Stortford (Mr. Wells). Others have suggested a non-returnable deposit. The Labour party has flirted with the idea of the gazumper's being responsible for the gazumpee's costs, but has rejected that and other potential solutions.
We should, however, put the problem of gazumping into perspective. It is reckoned to affect fewer than 2 per cent. of all property transactions. Indeed, there must be parts of the country represented here today where the prospect of gazumping is about as remote as a landing on Mars--areas where it never happens, has never happened, and is unlikely ever to happen.
A seller may, of course, genuinely discover that he has put his property on the market at too low a price because it has been undervalued. Should that seller be obliged to accept a payment of less than the property is worth? What about those, such as trustees, who are under a legal obligation to obtain the best possible price?
Sometimes there are perfectly good reasons for delay during a property transaction, and people are entitled--even under this nanny state--to have second thoughts. As for delay in transactions after an offer has been accepted, a keen buyer and seller can move things along quite quickly if they are sufficiently motivated.
All this is academic, however, because the Government are not addressing the problem of gazumping in any direct way. What they are seeking to do is to impose onerous extra burdens on sellers. That is particularly bizarre because, in the majority of transactions, people are buyers and sellers at the same time.
The Minister based almost his entire case for the Bill on the flimsy foundation of the Bristol pilot scheme. Is his confidence justified? I do not think so, and neither do organisations such as the Law Society and the Council of Mortgage Lenders. Michael King, chairman of the Law Society's conveyancing and land law committee, concluded:
Mr. Raynsford: Does the hon. Gentleman acknowledge that the chairman of the Law Society in Bristol, who has practical experience, is one of the strongest supporters of the seller's pack? That suggests that head office should perhaps learn from local experience before announcing its views.
Mr. Waterson: I am sure that--apart from the lucky recipients of the free packs--all the professionals involved in the Bristol property market were happy about the Government's injection of some £320,000 into that sector. If the Government would like to conduct a similar
Mr. Don Foster (Bath): Perhaps the hon. Gentleman does not have the same briefing as me. My briefing--from the Law Society nationally, not just in Bristol--states:
Mr. Waterson: The hon. Gentleman certainly was not present for a large part of the Minister's speech.
Mr. Waterson: I am sorry. In that case, I take back what I said.
I do not think that the Law Society has ever had a problem with the "concept" of seller's packs.
There is a lot to be said for putting together a pack of available information before starting to market a property. Many people do it. More and more will, I suspect, whatever happens to the Bill.
The Law Society--I am sure that the Minister will happily concede the point--has been at the forefront in pushing forward electronic conveyancing, in simplifying things and in trying to make the process faster. That would be happening irrespective of today's debate or the Bill, but the Law Society is still fundamentally concerned and opposed to the concept of including matters such as local searches, which may have a three-month shelf life, or survey reports, which also may have a shelf life of only a few months. It has clearly formed its own judgment, as I am sure most people will, on the results of the Bristol pilot scheme. [Interruption.] I shall ignore the ruderies about solicitors.
Mr. Christopher Fraser (Mid-Dorset and North Poole): Unlike the Liberal Democrats, who have no one in the Chamber because they are in fear of being repossessed at the next election, I have read the Law Society briefing. It says:
Mr. Waterson: I am grateful to my hon. Friend for that intervention. I do not think that the Law Society's position could be any clearer, but perhaps if hon. Members on both sides of the House had a copy of the
Michael Coogan, director general of the Council of Mortgage Lenders, said:
The first question must be: why Bristol? It is hardly typical. It has a relatively buoyant property market, with relatively high property values. Many of the properties in the pilot were valued in the £150,000 range or above--not exactly Labour heartlands.
The pilot scheme originally aimed to have a sample of 250. In the event, only 189 participated. Only 90 properties were completed on under the scheme, of which a third--30--were new properties, which would not count for the purposes of the seller's pack proposals. I understand that those were Beazer homes. They were all new and did not require a home condition report in the pack in any event. They were all sales exchanging within a short period of 28 days, rather than properties sold and marketed in the usual way. One can only speculate on how those quick transactions managed to skew the findings of the pilot scheme on the speed of concluding transactions.
Mr. Stephen O'Brien: Would it not be right to say that those new properties would probably be subject to a national house buyer's or home builder's guarantee? The significance of the seller's pack is thereby reduced, as there is further recourse for a purchaser who feels that he has not bought on the basis of proper representation or standards. May I add that the standard applied when buying a property at auction, which I have personally just experienced, is already demonstrating good practice in the marketplace. The sledgehammer of this Bill is not needed to try to improve on that good practice.
Mr. Waterson: I am grateful for the latter point. Perhaps my hon. Friend would like to develop it by volunteering to join the Standing Committee--[Interruption.] It is possible to take a man out of the Whips Office, but it is not possible to take the Whips Office out of the man. My hon. Friend's first point was absolutely right: it really is staggering that the Government are trying to rely so heavily on the results of the Bristol pilot scheme.
It is fundamental to any serious analysis of the pilot scheme that the participants were given their packs, including surveys, by the Government. That may explain the substantial satisfaction of those involved in the scheme when asked about it. Perhaps it is even more significant that one third of those who were involved in the pilot still insisted on their own survey, quite separate from the home condition report.
There are other objections to the Government's proposals, which are supposed to cut delay in the process. The proposals themselves could add three weeks or more
How will those who simply cannot afford those front-loaded costs--those who are in financial trouble and may be forced to sell their homes, or the elderly who are financially crushed by the need to pay for long-term care--manage? Has the Minister given any thought to them? He blithely tells us that estate agents will pick up those front-loaded costs as it will be worth their while to do so. Perhaps they will pick them up, but perhaps they will not. I do not think that it should be assumed that all estate agents will be signing up to that idea. Why should they? Moreover, if they do, might we not see an inexorable rise in commission levels as a quid pro quo?
The Minister has made much of the assertion that there was a marginal increase--I think from 72 per cent. to 87 per cent--in the proportion of final sales to accepted offers, but can those and other figures be relied upon given such a small sample? Cannot the change be explained away by other factors? I really think that the attempts to massage the results of the Bristol pilot undermine the overall case for compulsory seller's packs.
As we have already heard from various Labour Members today, the real problems begin when we move from the leafy avenues of Bristol to low-demand and low-value areas. There are rumours of rebellion on the Labour Back Benches, and the Government are right to be worried. The Government clearly share the concern of those Back Benchers because, previously, they have examined potential difficulties in Bradford and Burnley. According to a survey by Countryside, 20 per cent. of sellers with properties worth less than £60,000 would defer or abandon plans to sell if they were forced to produce seller's packs.