Standing Committee D
Tuesday 23 January 2001
[Mr. Roger Gale in the Chair]
The Chairman: Good morning. My intelligence from the hon. Member for Bath (Mr. Foster) is that the hon. Member for Carshalton and Wallington (Mr. Brake) is in the process of becoming a father. Further information, via modern electronics, will follow.
Mr. Don Foster (Bath): On a point of order, Mr. Gale. I am sure that the Committee would not wish to be misled. My hon. Friend is already a father; we are now awaiting the birth of his second child who, according to my pager, is en route.
The Chairman: I thank the hon. Gentleman for that clarification.
On a housekeeping matter, new clauses 5 and 6 are printed on the amendment paper as relating to part I of the Bill but they in fact relate to part II.
Contents of sellers' packs
Mr. Nigel Waterson (Eastbourne): I beg to move amendment No. 8, in page 6, line 22, leave out from `provision' to the end of line 24.
I am grateful for the birth condition report. I hope that we will have good news later on. Nigel is a nice namedespite its recent misuse in the Chamber by someone much more important than me.
The amendment has the simple purpose of removing the power of the Secretary of State to make different rules for seller's packs in different areas, properties, circumstances and so onin other words, the amendment would prevent exemptions. It is pre-eminently a probing amendment that seeks to raise the issue of low-value, low-demand areas, which might be said to have dominated the Second Reading debate. The issue is obviously of considerable and understandable concern to several Labour Back Benchers. The hon. Member for Bassetlaw (Mr. Ashton) spoke about the problems of old mining homes that probably have a tiny paper value. Clearly, much pressure has been placed on the Minister behind the scenes to do something about the problem, but our sympathy is limited because it is of the Minister's own making. He is the first to admit that that situation raises all sorts of problems. Is one to draw lines on maps? Is one to use a particular value that may change? Is one to use a particular council tax band? That is a difficult conundrum for the Minister and his Department. It would be helpful if the Minister could give us just a teensy-weensy glimpse into the way in which his mind is working because, as before, we do not have the benefit of draft regulations to debate in Committee.
This problem, like so many others, is caused by the Government's desire to bash on regardless with imposing the seller's packs, with the force of law, in the teeth of opposition and criticism from a range of organisations and bodies. We take the view that if the seller's packs are to be obligatory, the Minister will have to look at exemptions. Sadly, the list of potential exemptions and exceptions to the Bill gets longer and longer, as the hon. Member for Bath and my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) have said. As matters advance, we discover more and more provisions that the Minister does not intend to impose and reasons why people should be exempted and excepted from them. However, it would be invidious to start drawing lines on maps or making similar distinctions. We take the viewexpressed initially by my right hon. Friend the Member for Skipton and Riponthat there could be a self-fulfilling prophecy whereby an extra stigma would be imposed on certain properties because of their exemption from the requirement for a seller's pack. We are talking about areas where there is already low demand, low values and possibly houses that have no real value at all. It would mean that a red line would be drawn around an area, and people would be told that they were not required to have a seller's packthey would not even have that benefit.
Above all, it would be outrageousI say this without having heard what the Minister has in mindif he implicitly acknowledged the problems with seller's packs that we have continued to expound by making regulations saying that the packs should not apply in certain areas and for certain types of property. It would be even more outrageous if he thereby exempted large Labour-represented and controlled areas of the country from the so-called benefits of seller's packs, but left many other parts of the country subject to the full requirements of the legislation.
As I said, it is difficult to guess which way the Minister will jump on the issue. He has accepted that he must do something or he will have a major Back-Bench rebellion on his hands, but he has also spotted all the potential problems and difficulties. To use that much over-used phrase, the devil will be in the detail. I commend the amendment to the Committee.
Mr. Don Foster: I am delighted that the hon. Member for Eastbourne (Mr. Waterson) moved the amendment to give us an opportunity to debate an issue about which, as he rightly pointed out, a number of the Minister's hon. Friends raised considerable concerns on Second Reading. The hon. Gentleman will be aware, as you are, Mr. Gale, that we have had an opportunity to touch on the issue on several occasions during our deliberations, but I want to draw the Committee's and particularly the Minister's attention to a letter that I recently received from Knight Frank, a major firm of estate agents. It raises what is almost the opposite end of the problem, and I would be grateful for the Minister's comments. That firm wonders whether the requirement for a seller's pack should be applied to very large properties. It proposes that any property with two or more acres should be excluded from the Bill, although I have not tabled an amendment to that effect. If the amendment tabled by the hon. Member for Eastbourne were accepted, it would prevent any opportunity for the Minister to take that proposal into account in the regulations.
In the letter, Knight Frank makes the point that the burden on farmers and smallholders selling large properties would be huge, because the costs of preparing a seller's pack and condition report for such a property would be proportionately much higher, bearing in mind rights of way, easements, additional buildings and so on.
I suspect that the Minister will say that all that information would have to be obtained during a sale anyway and that there may well be advantagesthe same advantages for which he has argued strenuously in the case of all other propertiesin providing it in a seller's pack. However, as Knight Frank and other organisations have contacted me with concerns about the impact of the clause on people seeking to sell large properties, the Minister might like to comment on those concerns.
The Minister for Housing and Planning (Mr. Nick Raynsford): I am pleased that the hon. Member for Eastbourne stressed at the outset that this is a probing amendment, even though towards the end of his comments he appeared to be rather more enthusiastic about pursuing it. The amendment would make completely impossible something for which he argued strongly at an earlier stage in the proceedings, which is that newly built properties should not require a home condition report. We were entirely happy to accept that newly built properties, with the benefit of a warranty such as that provided by the National House Building Council or Zurich, provide the protection necessary for the buyer, thereby avoiding the requirement for a separate home condition report. That common-sense solution would not be possible if this amendment were to be accepted.
The provision enables us, if necessary, to make special provisions for particular categories of properties. I have already talked about properties that are being built or those which are newly completed. As I have stressed in earlier debates, the issue of low-value properties, which has been raised by hon. Members, is a difficult one. It is not our intention to undermine the benefits of the seller's packs by making widespread exemptions, but there are genuine concerns where the requirement to produce a seller's pack might be disproportionate in the case of extremely low-value properties.
Mr. Tim Loughton (East Worthing and Shoreham): The Minister said that it might be possible to exempt extremely low-value properties. Will he quantify that in terms of defining a benchmark?
Mr. Raynsford: In case anyone believes that we are considering widespread exemptions that would cover a large number of properties, I should make it clear that I have previously indicated that around £10,000 might be the order of magnitude we have in mind. We are thinking about circumstances where the requirement to produce a seller's pack might be a deterrent to putting a property on the market. In most cases, we believe that the seller's pack will help to clarify the condition of the property and improve the workings of the market so, even in low-value areas, it might help to ensure that home owners are able to sell their properties. However, some hon. Members have highlighted the fear that, in some circumstances, the requirement to produce a seller's pack might act as a deterrent to putting a property on the market. We do not want that to happen so we have said that we will undertake detailed consultation before making any final decision.
We are sympathetic in principle and we are cautious about the application of exemptions because, as has been said, they could have the perverse effect of stigmatising property. Therefore, if we decide to propose any exemptions, they will be limited and tailored to specific circumstances rather than having a more general application. I cannot give any specific indications because we have undertaken to consult in detail with all the interested partiesprofessional bodies, local authorities and others, including right hon. and hon. Membersand it would be wrong for me to try to anticipate the outcome of those consultations. I have already said that we intend to apply an exemption to newly built properties that benefit from warranties provided by NHBC, Zurich or other insurance companies, and if we propose any other exemptions, they will be subject to full parliamentary scrutiny.
The issue of larger homes was raised by the hon. Member for Bath. He evoked a rather touching image of Knight Frank, a company whose image is not associated with smallholders coping on a pittance with impoverished farm land and small properties. That may be the image it is trying to cultivate, but this is really a lobby in favour of those with large propertiestwo acres of moreon which the partners of Knight Frank are no doubt delighted to receive instructions. The information required for a seller's pack is information that would always be obtained. People purchasing large and complicated properties will want all the information and will almost certainly commission a full structural survey rather than just relying on the house condition report. Nevertheless, that report is helpful because it will give useful information and say whether a full structural survey is necessary. An exemption would not be of any practical use or benefit to people in those circumstances. Therefore, the only case for an exemption is where a property is part of a commercial enterprise, for example, a farm. That is the answer to the hon. Gentleman's genuine concern for poor smallholders in financial difficulties, but the wider issue is not meritorious.