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Andrew Selous (South-West Bedfordshire) (Con): As I recall, it was pointed out in Committee that Maria Coleman's scheme provides her with significant additional fee income. Does the hon. Gentleman not think that vested professional interests are involved, in order to boost their earnings?
Mr. Kidney: The extra money is of course for the inspectors. However, the Government's scheme makes provision for inspectors, so that is not a consideration. What is a consideration is that under the current system, several buyers incur the same costs for one property, yet only one will buy itagain, that is wastefulwhereas one seller would incur the costs for everyone. I am sure that the market will develop systems to enable the seller to put off repayment of the costs until the transaction has concluded, as happens with the voluntary scheme.
As the hon. Member for Poole (Mr. Syms) rightly said, there are two problems: shelf life and the sale not proceeding. Here, the Government have clearly decided to grit their teeth and see things through. I am glad that
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the hon. Gentleman mentioned my discussion in Committee of electronic home information packs, which will cut costs and time yet further. I certainly support the registration of estate agents to make sure that they perform their part of the scheme competently.
At the moment, only one in five buyers purchases a houseat huge expense; indeed, it is the greatest investment of their liveswith a surveyor's report that is equivalent to, or better than, a home buyer's report and valuation. Four out of five do not obtain a report of that standard. Most buyers purchasing with a mortgage rely instead on the lender's survey and report. There are three levels of survey: a basic valuation of a property; a home buyer's report and valuation; and a full structural report. Some 80 to 90 per cent. of buyers with a mortgage rely on a basic valuation. They are paying, so they choose the cheapest.
Someone else obtains the report, but it is the buyers who rely on it. It is worth pointing out that when things go wrong with the report, buyers sue the valuers. That will help to reassure hon. Members that under the Government's scheme, there will be a remedy. In fact, a few lenders refuse to disclose the report in order to avoid litigation risk to themselves and their valuers. Thus some people pay for the basic valuation report, do not get to see it, but carry on and buy their homes. Basic valuation reports clearly involve shorter time inspections and are for a different purpose; they are not what buyers require when making such a huge investment. Most lenders' valuers carry out physical inspections in making those reports, but in recent years there have been a few examples of fast-tracking, which some call desk-top evaluations or drive-by evaluations. Such practices are much more common in the United States of America.
There are legitimate concerns about the number of inspectors and their training, the presence of their indemnity insurance, and the cost of the infrastructure and implementation plan, but those are all practicalities. They must be got right, but they do not amount to objections to the principles, which concern transparency, certainty, consumer protection and consumer satisfaction.
A Consumers Association survey of more than 1,000 adults at the end of last year found that 82 per cent. thought that home information packs would be "very useful" and 13 per cent. "fairly useful"95 per cent. in total. The Office of the Deputy Prime Minister report on "Piloting the Home Condition Report", published in February this year, found that the majority of those taking partsellers, buyers, estate agents, conveyancers and inspectorsliked the idea of a home condition report and found it easy to understand. The report said:
"Most sellers and buyers considered the report to be accurate and independent."
Sir Sydney Chapman : I shall be brief, as much of what I wanted to say has already been covered by my hon. Friend the Member for Poole (Mr. Syms) and, indeed, by the hon. Member for Kingston and Surbiton (Mr. Davey).
The crucial question is whether the proposal for home improvement packs will streamline the buying and selling of a home, or be just an additional bureaucratic
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cost. As my hon. Friend explained, the cost is likely to be in the order of £600 and perhaps more. I am willing to take an even bet with anyone that if it were £600 in the first year, it would increase by 50 per cent. within five years. That is an aside, but if we are to introduce a radically new proposal, we must think about costs.
I want to raise two issues. First, some people in the market need to sell their home quickly because an emergency has occurred. Will the new scheme help to deal with that problem? Secondly, as my hon. Friend the Member for Poole mentioned, there are problems with houses of very low value. We tend to think, quite rightly, that the cost of buying is going up and up. I know that in the three most northern regions in England, the average cost of a house has now hit the six-figure barriermore than £100,000. The average cost of a home in London, though, is more than £250,000. There is no problem there. The problem arises generally in parts of the north where housing is very cheap because, for one reason or another, it is virtually unsellable. Various Government amendments and new clauses will change the Bill, but I hope that the scheme that results will bear in mind that particular problem.
All in all, it is a radically new proposal and genuine arguments exist on both sides of the issue. It would be a foolish person who denied that some of the arguments for introducing HIPs were compelling, but, equally, there are opposing arguments. I am bound to say, as an honorary member of the Royal Institution of Chartered SurveyorsI am not a fellow and I have no financial interestthat we should err on the cautious side and introduce the scheme on a voluntary basis first. If it proved successful, it could then be extended.
I shall start by responding to two specific questions. The hon. Member for Kingston and Surbiton (Mr. Davey) intervened on my speech to ask how new clause 13 would enable the seller or agent to be certain of the identity of a person to whom a pack was given. The precise answer is that it would not. The position will remain as at present. If the seller is concerned, conditions can be attached, but our conviction is that most sellers will not be concerned. A propos the same new clause, the hon. Member for Poole (Mr. Syms) asked what the charge for a copy of the pack covers, and the answer is, the cost of the copy and the documents requested.
My hon. Friend the Member for Stafford (Mr. Kidney)also known as my guruspoke eloquently on this subject. I suspect that we shall hear from him again, and those of us who are early-morning listeners to Radio 4 heard him before 7 o'clock this morning.
I want to deal with those amendments that would introduce a voluntary home information pack system, rather than the compulsory system that is proposed. I must resist them. As I have said repeatedly, a voluntary HIP system would essentially continue the shambolic mess that we have at present. It would allow sellers to avoid the duties by ensuring that the marketing material
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made it clear that the property was being sold without a pack. Going down that road would lead us to the worst of all worlds.
HIPs need to be compulsory to ensure that everyone benefits from them. We are in no doubt about that: voluntary arrangements simply would not work. It is inevitable that, given the choice, some sellersperhaps a measurable proportionwould choose to market their homes without an HIP. They might do that in an attempt to avoid costs, or in the hope that they might avoid having to disclose information, for example about a problem with the condition of the property that an HIP would identify. That would be unfair to buyers who had provided a pack for their own sale.
More harmfully, the amendments would result in an unsatisfactory two-track process, in which sales without packs would slow down connected sales with packs. In a chain, that would cancel out the very benefits that the Bill seeks to achieve. We would end up with a system that fostered waste, uncertainty and delaythe very opposite of the Government's intentions. There is no scope for relaxing the mandatory nature of the duties if we want to improve the efficiency of the housing market and protect the interests of all home buyers and sellers.
I turn to new clause 32, movedalso very eloquentlyby my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts). He got in very early with the joke about politicians versus estate agents that will have been in the front of hon. Members' minds when considering this matter.
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