Homes Bill

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Mr. Raynsford: The right hon. Gentleman made exactly that point on Second Reading, and I agreed. I stressed that we did not want to give blanket exemptions at the bottom of the market, and I stress it again. He will recognise that there may be limited circumstances in which exemption might help property of a low value in some of the most depressed areas, about which we heard on Second Reading. Some of those properties might be derelict. It was for precisely that reason that I made it clear, in my response to the amendment moved by the hon. Member for Eastbourne, that although we did not rule out the possibility of a limited exemption in some cases, we did not support the proposal for a blanket exemption that was the purpose of the amendment. I agree with the right hon. Gentleman; his view is much more in line with ours than with that of his Front Bench.

11.45 am

Mr. Curry: Further to that, I have no doubt that the question of exemptions will drift in and out of our conversations. Is the Minister talking about individual exceptions, or ones on enumeration districts or council wards? After all, there are socio-economic indicators of levels of deprivation in wards. So that we can focus ourselves as we go into the debate, we should know whether we are talking about a certificate to exempt a property, or exemptions that apply to a zone.

Mr. Raynsford: As I made clear on Second Reading, we have not reached firm conclusions on the matter, but I am not attracted to widespread exemptions such as ones using a specific band for council tax purposes, or ones involving assisted areas. That would not seem a sensible way forward.

I do not want to leave the Committee with the impression that firm decisions have been taken, because they have not. However, if there is a case for exemptions—I have been guarded in my comments on the matter—it would probably be easiest to apply them to properties that have a defined low value. The actual value of the property would be the easiest way to do that, so a property—please do not treat this example as a suggestion of the Government's intentions—with a value of less than £10,000 might be exempt in certain cases. That is only a possibility. The price distinction is an easier and more credible way to define exemptions, if one chooses to do so, than the alternatives about which the right hon. Gentleman spoke.

Mr. Curry: That will inevitably have a geographic implication. The Minister would agree that if one plotted a map of properties worth £10,000 or less, it would probably peak in Newcastle or other parts of the north-east. Precious little of it would relate to London properties, no matter how grotty, so there will inevitably be zonal implications.

Mr. Raynsford: The right hon. Gentleman is correct, but he will recognise that the concerns voiced on Second Reading came from the northern regions. I do not believe that there would be a case for any exemptions in London, as there is no evidence whatever that there is difficulty in selling property in the London area. In fact, there is a considerable demand for it. A regional dimension would probably follow from a definition based on price. I hope that the right hon. Gentleman will accept that there is logic in that distinction.

Mr. Clifton-Brown: I want to follow on from the sensible points made by my right hon. Friend the Member for Skipton and Ripon. We should be careful because if properties below £10,000, for example, are exempted, they will be stigmatised. I should be grateful if the Minister would address the point I made in an intervention on the Second Reading which he failed to answer properly, as several of his hon. Friends pointed out to me. The point is that the seller's packs will have to be time-limited because local authority searches are time-limited to 28 days. Any reputable surveyor will want his survey time-limited because conditions can change. The Minister will have to address that necessity.

The low-value properties, to which my right hon. Friend referred, tend to remain on the market longer as they are more difficult to sell. If the seller's pack were time-limited, it would have to be redone; therefore, low-value properties may have more than one seller's pack and more than one set of costs. We have the anomaly that a low-value property will be saddled with higher costs than in a normal transaction.

Mr. Raynsford: No, the hon. Gentleman has it wrong. I thought that I made it clear on Second Reading that there is no obligation. As he will recall, it was the Under-Secretary of State for the Environment, Transport and the Regions, my hon. Friend the Member for Sunderland, South (Mr. Mullin), who summed up the debate for the Government. There will be no obligation to produce a new seller's pack, only an obligation to produce a pack.

On the issue of updating the information, a prospective buyer may feel if a property has been on the market for some time that it is appropriate to obtain more up-to-date information. Local authority searches are the one area where there is general agreement that after—perhaps—three months there is a need for a new check. The Government hope that, with the introduction of the national land information service, such information will be available at a tiny price. That would be one benefit of the modernisation of the processes of obtaining information for conveyancing. The NLIS will make that kind of update possible. The majority of the information in the seller's pack will continue to be viable and valid for several months beyond that period. In some cases, it will still be valid a year or more after the seller's pack was produced. The Bill does not create an obligation on the seller to produce another pack, so the suggestion that it will load on additional costs is wrong.

Mr. Clifton-Brown: I do not want to be a nuisance, but what the Minister said is leading us into a more anomalous situation. The purchaser will have a seller's pack that is out of date, although he may not realise it. Also, the hon. Gentleman did not allude to the problem of surveys. As a chartered surveyor, I would not wish to produce a survey unless it were time-limited because things change within buildings. The Minister must address the problem, which particularly applies to low-value housing.

Mr. Raynsford: I have addressed the problem, as have a large number of professionals, who contributed to the development of the proposals, including the RICS, which is the hon. Gentleman's professional body.

I shall now move on to new homes. I partly agree with the hon. Member for Eastbourne—although with one element of his comments, and not with his amendment. There is no need for a home condition report on a new property that is covered by an appropriate warranty. That is an important safeguard. If all new properties were excluded, that would include some built by builders who do not belong to the National House Building Council or to the Zurich Insurance Company, which also offer warranties. Where there is in place a warranty provided by the NHBC, the Zurich Insurance Company or any other firm in the market that provides the cover that the hon. Gentleman discussed in his speech, there is no need for a home condition report on the first sale. On that point I agree with the hon. Gentleman. The Government are minded to make that specific exemption as we define the details in regulations.

The remainder of the seller's pack should be available in the case of new properties. The case is perhaps best made by the company that the hon. Gentleman quoted, Beazer Homes. It participated in the Bristol survey and 30 of its homes were sold with the benefit of a seller's pack. Beazer told us that the homes that were sold with a seller's pack reached exchange 31 days after offer, compared with an average of 69 days for other new homes on the same site without a seller's pack. That is pretty convincing evidence that the seller's pack helps the process of marketing.

The point was well made by the hon. Member for Cotswold—I know that he is rather excited about the matter, but perhaps he can contain himself and listen to what I am saying—that many builders put together packs for the marketing of homes. The provision is not the imposition of an onerous burden, as the Opposition have tried to present it, but a sensible arrangement to ensure that the information that people need will be available. The seller's pack will also include copy title deeds. Is the hon. Member for Cotswold seriously suggesting that title deeds should not be made available to someone who is buying a property? It will include a property information form containing the seller's replies to standard pre-contract inquiries; the consents relating to planning and listed building matters and building regulations—all important matters—and warranties and guarantees, which we have mentioned as crucial. There would clearly not be a case for exemption from a home condition report if no warranty existed. How could one tell if the warranty were not available? For a leasehold property, the pack would include a copy of the lease, the memorandum and articles of the landlord or management company and all other such essential documentation.

Mr. Clifton-Brown: On a point of order, Mr. Gale. The Minister appears to be quoting from a document that has not been circulated to the Committee. May I ask you to ask him to identify it and, if necessary, circulate it to the Committee?

The Chairman: That is not strictly a matter for the Chair, but the Minister has heard the hon. Gentleman's remarks.

Mr. Robert Ainsworth (Coventry, North-East): We have not got one, either.

The Chairman: Order. If the Minister wants to enlighten the Committee, I am sure that he will do so.

Mr. Raynsford: I am very happy to enlighten the Committee, Mr. Gale.

I am sorry to disappoint the hon. Member for Cotswold, who thinks that he has spotted a secret document that has not been made available to the Committee. I am referring to the consultation document used by the Government for consultation about the proposals before the Bill was introduced. It is a public document and was widely circulated. I am sure that all the assiduous members of the Committee who have done their homework have referred to it. However, if there is any doubt, I shall ensure that copies of the consultation document are circulated to all members of the Committee.

We have had a thorough debate. I have made it clear that there is no case for accepting amendments Nos. 31 and 32. I have said that the Government intend to give further thought to the issue of very low-value properties, perhaps including some derelict properties. We shall return to that matter. I have also made it clear that we do not intend to prescribe a home condition report as part of seller's packs for new homes for which an appropriate warranty exists as a guarantee to the buyer. With those assurances, I hope that the hon. Gentleman will agree to withdraw the amendment.

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