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Keith Hill: It is perfectly clear that the work that has to be carried out for the energy report and inspection is very much akin to that which needs to be carried out for a home condition report. It is, effectively, a medium-level survey. Quite frankly, it is a sight better than the drive-by survey that is so often done by those who carry out surveys and valuations. I accept, of course, that more detailed work is required in some circumstances, but I make the point that we already have a compulsory system of energy assessment, which will require little by way of add-on—in terms of what needs to be looked at or time—to produce a home condition report.
How long would it take to finalise a stand-alone energy report? We think it would take three to five days—the same time as we expect it to take to get a home condition report and, indeed, assemble the whole pack. So, frankly, the Opposition are offering no time savings. This would also scupper the possibility of first day marketing—another Opposition shibboleth—given that the energy survey has to be made available to enable potential buyers to make comparisons with similar properties.
Mr. Edward Davey: The Minister has spoken in some detail about what would be in such an energy audit, but will he go to the key point? The directive requires that to be done by the time the property is sold, not at the point of marketing. That is the difference between the parties, I believe. We have no objection to energy audit being compulsory and having to be done before sale—that is what the directive requires—but producing a system under which all has to be done before the house is marketed is the genuine big problem here. It will cause so many difficulties in the housing market.
Keith Hill: It seems to me that the hon. Gentleman really is splitting hairs. The fact of the matter is that the work on the energy report has to be done in any circumstances. It has to be done by the point of sale. Why not? What reason is there not to conduct that exercise at the beginning of the process? After all, presumably nobody knows exactly when the point of sale will be. There is absolutely no reason for that work not to be done.
One corollary of the home condition report system is that the period of sale will be considerably reduced because all the information that is required and which takes time to acquire in a normal house sale will be provided up front. So, it seems to me that the hon. Gentleman is not raising a significant reservation.
I am aware that I have spoken for some time, so I want to deal with some issues that have been raised and perhaps come back to offer assurances of the sort that the hon. Member for Ceredigion (Mr. Thomas) is looking for. The question is often raised that this is an unreasonable imposition on the house seller and those involved in the process. An energy report is essential, but how much will that cost? The industry estimates that a free-standing energy survey will cost at least £150, yet for another £150 sellers and buyers could have a full home condition report and thereby help to solve the problem of the 43 per cent. of failed transactions that
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result from an unfavourable survey. I would say that that is a good deal, and I firmly believe that buyers and sellers would agree if they were told the facts as distinct from the fiction.
7.30 pm
I keep reading, and the Opposition keep stating, that these provisions will force every house seller to pay £1,000 for a pack. Never mind that the cost is nearer £650, of which £300 will buy the seller the full condition report, including the energy assessment—and never mind that many of the costs are incurred now. What about the benefits? There will be savings to the buyer from fewer mortgage lenders' valuation inspections—exactly how many fewer we do not yet know, but those are commercial decisions that lenders will take in the light of their confidence in the packs and their own plans.
We should not forget that the market is likely to drive down costs. The price of HIPs will be driven down by competition. Last week, Rightmove, members of whose property portal site make up half the entire estate agency market, announced that it is gearing up to provide at least 500,000 packs a year from 2007. That is not far off a third of the total requirement for packs—and that is from just one company, albeit one backed by the Halifax, Countrywide Assured, Connells and Royal Sun Alliance. We know that other players have similar plans.
A number of independent agents have expressed interest in the Rightmove initiative. Critics of our proposals suggest that small estate agents stand to lose out under HIPs, yet here is an example of an initiative that will provide packs for the whole industry, including small agents.
The House will be aware that I have announced that our aim is to introduce these reforms in January 2007. However, I have also made it plain that the reforms will not be implemented until everything is in place and ready to go. We will, of course, take our lead from the industry on that. In that respect, our proposals for a dry run of the home information pack will help everyone to judge the readiness of the market.
To help to ensure a smooth and successful introduction, the Government intend to facilitate a dry run of the full HIPs scheme on a voluntary basis throughout England and Wales from mid-2006. During the dry run, all the components of the statutory scheme will be available for the industry to test and make ready their systems ahead of the introduction of the compulsory scheme. We regard that as a crucial part of our implementation strategy. With the industry, we will closely monitor the dry run and identify any problem areas. If necessary, any problems will be addressed through regulations before the national scheme commences. The flexibility built into the Bill ensures that that can be done quickly.
It was suggested in the other place that the dry run should include a compulsory element in a designated area. Again, the provisions of the Bill are sufficiently flexible to allow that approach. I am happy to consider that further with the industry.
We have no intention of rushing headlong into this with our blinkers on and without any regard for whether the market is ready and the new system works. There is
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no basis for that sort of accusation, which has been made on other occasions. We are flexible on the issues that several Members have raised, such as the implications of the new compulsory system for low-value homes and for people who are moving out of home ownership, such as the elderly, who will not gain directly from a HIP prepared on another property. There will be open and frank discussion about such matters before the final shape of the scheme is settled.
The housing market is not functioning properly. Consumers—buyers and sellers—want change. We have said that we will deliver that, and have confirmed it in two general election manifestos. The changes cannot be delivered on the scale that is needed under a voluntary system. Compulsion may be regrettable, but in this case it is necessary.
Mr. Hayes: I have seldom heard a Minister expend so much energy so inefficiently. For half an hour, the Minister for Housing and Planning regaled us with his accounts of the glories of home information packs, without addressing a single argument that had been made persuasively by Liberal Democrat peers—I do not often say that—Cross Benchers and, most notably, Conservatives in the other place. The truth is that home information packs, or sellers packs, as they have become known, are not needed and not wanted.
Let me reciprocate the generosity that the Minister displayed at the beginning of his remarks. It is true that the Bill includes many good proposals, and we discussed some of those at length in Committee, but this proposal is not one of them. Extraordinarily, it is against all advice, and the Opposition parties are united on this, although I demur from including the Welsh nationalists, who, I understand, at least from what the hon. Member for Ceredigion (Mr. Thomas) just signalled, are on the fence.
The other place debated the proposal at great length, and peers of all parties both voted for the amendment and made the case against the Government's position. Despite what the Minister says, there is no widespread demand for sellers packs from buyers and sellers. The only people whom he could cite in support of his contentious—I say that advisedly—proposals were people in New South Wales, people in Denmark and Kate Barker, who was doing the Government's bidding anyway. She was hardly likely to come out and say that they were wrong, when she was commissioned by them to say that they were right. The evidence that the Minister has brought before us is not in any way convincing.
Mr. Kidney: Perhaps my right hon. Friend the Minister was therefore remiss in not repeating, as he did in Committee, that the Consumers Association is a strong supporter of the proposal on the grounds of consumer protection. Is not this proposal necessary to ensure that everybody who buys a home gets the speediest possible service and all the information that they need before signing a cheque for a whacking great price for their house?
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