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There are few better illustrations of the Oppositions opportunism than their repeated complaints about the
alleged excessive cost of HIPs, swiftly followed by suggestions that, without additional information, the home condition report will be worthless. My hon. Friend the Minister rightly made that point.
The Governments announcement yesterday that the home condition report will not be a mandatory part of the home information pack is equally misguided. Although energy efficiency reports are welcome, they constitute only one relatively small element in the total equation. Few people, if any, will base their decision of whether to buy a property primarily on its energy rating. Yesterdays announcement is therefore, as the Financial Times rightly observes, almost the worst possible outcome: retaining a significant cost attributable to the need for a visit to survey the property for its energy rating, without getting the benefit of the full home condition report and the economy of scale implicit in conducting both surveys at the same time.
Mr. Michael Wills (North Swindon) (Lab): I am interested in my right hon. Friends argument about the energy rating. Does not he perceive its value in changing the culture and the way in which people approach their energy emissions?
Mr. Raynsford: I fully agree that the energy rating is a significant element, but it is only a part of the picture, and the vast majority of people who consider buying a property want to consider several other factors, including structural stability, the location and the propertys characteristics, as well as energy efficiency. There should be a comprehensive report. That is much more cost effective than having two separate surveys. I fear that that is one of the wasted opportunities of the decision not to proceed with the mandatory home condition report.
That leads me to the third objection: that HIPs have not been sufficiently trialled and tested, that there are not enough trained home inspectors, that preparations for June 2007 are behind schedule, and that there is consequently a risk of serious problems and turbulence in the market around the introduction date.
Does my right hon. Friend agree that a benefit of the energy performance certificate is that it will force domestic householders to consider how they expend energy, thus saving money? Would not the home condition report also accrue a benefit from that in that homeowners would be forced to consider other elements and other expenditure in their homes and try to gain equal cost advantage from improving those, too?
My hon. Friend is experienced in those matters. Indeed, I believe that she is currently training in the process of undertaking home condition reports [Interruption.] She makes the valid point that the reports are about providing additional information
to the public to enable them to make more informed judgments, and the abusive noises from the Opposition Benches imply disrespect towards those who are seriously trying to help the public to be better informed about the most important financial decision that most people will make in their lives.
There is ground for concern about the speed of implementation and the adequacy of the number of home inspectors, but the Governments decision to pull the plug on the mandatory home condition reports is precipitate and wrong. The training of inspectors, although slow to start, has been gathering pace this summer. Indeed, there will be many upset and angry individuals who have invested much time and money in preparation and training for the introduction of the reports. They will feel badly let down. All the evidence that I have gleaned from those with genuine experience of the market shows that the June 2007 date was achievable and that, even if some difficulties had occurred around the start of the new arrangements, they would have been overcome in a relatively short time.
Let me say a brief word about the likely impact on the market. There has probably been more ill-informed speculation, scaremongering and nonsense aired in recent months about that than about any other aspect of the scheme. The suggestion, which has been put about, that HIPs will lead to a massive slump in the market and that 90,000 estate agents will consequently be out of workincidentally, that was seen as a downsideare, frankly, not worth the newspaper on which they are written.
Of course, there may be some short-term reductions in the number of properties put on the market because, as everyone knows, under current arrangements some homeowners put their properties up for sale to get a feel for their value, with no serious intention of proceeding to sell. However, by definition, the vast majority of those speculative sales would never have proceeded. So the idea that their withdrawal from estate agents windows will lead to a collapse of the volume of sales is unconvincing. The report to which the hon. Member for Surrey Heath (Michael Gove) repeatedly referred is a perfect example of that. If one puts rubbish in as ones assumption, one is likely to get rubbish out as ones conclusion.
The factors that determine the overall volume of sales and, indeed, trends in house prices are far more fundamental and reflect wider economic trends. While the Government continue to manage our economy as skilfully as they have done in the past nine years, we should have no reason to fear a serious downturn in the market. On the contrary, the creation of a fairer, better, quicker and more transparent system of buying and selling homes should improve the prospects for a thriving housing market in the years aheadone in which the interest of the public comes first and the professionals involved are genuinely competing for business in a way that delivers best value for money for the citizens.
I greatly regret yesterdays announcement that home condition reports will not be a mandatory component of home information packs when they are introduced next June. The suggestion that they can be introduced on a voluntary basis is wishful thinking. The irony behind all that is that, after years of dragging their feet, many of the vested interests who have done well
financially out of the current arrangements have come round to accepting that a fundamental reform was inevitable. The more progressive elements in the industry were already gearing up to take advantage of a more open and transparent market in a way that would have brought genuine benefits to the public. It is hardly surprising that consumer voices are the most disappointed today and that the backwoods estate agents and the Opposition are crowing.
I am sorry that the Government, whom I support and as part of whom I served for many years, have made such a grievous error of judgment, which will make it much harder to achieve the fundamental reform to the home buying and selling process in England that is so overdue. I hope that my hon. Friend the Minister for Local Government and my hon. Friend the Minister for Housing and Planning will realise before too long that they have made a mistake, which must be reversed, and that they must introduce HIPs, with the full mandatory home condition report, in the lifetime of the Parliament.
Mr. Ian Liddell-Grainger (Bridgwater) (Con): Follow that if one can! I am amazed that we are holding such a debate. Future generations of home sellers and buyers will celebrate the change that has happened, and the Government should designate 18 July a public holiday. Perhaps it could be named Prescott day in memory of a politician who made it possible by cocking it all up. The architect of the scheme is a disaster and the idea was insane. Only the Deputy Prime Minister could have devised it, making even Donald Rumsfeld appear sensible.
I cannot wait to see the back of the dreadful home information packs. It is an appalling scheme. Whatever the Minister claims, hopes and has powers to achieve, I am sorry but the Government are wrong. I agree with the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) that the matter should be examined, but not in the current manner. Change must happen, but let us think it through. There has been too much emotion cast here, there and everywhere, and that should not continue.
The home condition report will also bite the dust. Why is the idea crumbling? Because, again, it was not thought through. However, according to the Minister, HIPs remain top of the pops for the general public. That is not the caseHIPs have gone down like a lead balloon with the general public. If one talks to estate agents, mortgage providers and the Law Society, they will say that the general public do not want HIPs.
The Consumers Association, which unfortunately orchestrated the scheme, asked only 1,000 people what they considered to be the way forward for home improvement. That was two or three years ago. How can one base legislation on a consumer report of three
years ago, with a sample of only 1,000 people? One cannot. Which? is a tremendous publication. It does a good job, but it is produced by a broad-brush organisation, not a forensic organisation.
Of course, the organisations that I have mentioned have a vested interest, and they know what they are talking about. That is what Labour Members cannot accept. A mortgage lender lends money; an estate agent is trained to do that job; and the members of the Law Society are pretty good at the job that they do. I am sorry that the hon. Member for Wolverhampton, South-West (Rob Marris) is not in his place at the moment.
Mr. David Evennett (Bexleyheath and Crayford) (Con): My hon. Friend is making a powerful case. I would like to emphasise that my constituents are also raising these concerns. The general public are worried about the value of these packs and about the increased costs involved. They are also worried about what the packs will be worth if they are not mandatory. My hon. Friends powerful case is backed up not only by the professionals, but by a number of my constituents who have contacted me.
Mr. Liddell-Grainger: I quite agree with my hon. Friend. Is it not the general publicour constituents across the countrywhom we are here to protect, rather than vested interest groups? The Minister is relying on a Consumers Association report based on a survey of 1,000 people. Come on!
My hon. Friend the Member for Surrey Heath (Michael Gove) is aware that we have been running a HIPs survey in my constituency, as he has been extremely helpful in putting it together. Minehead is a town of 10,000 people on Exmoor, with no large towns around it. I went to see Mr. Nick Lacey of Langdons estate agents and asked him to get every estate agent in the town to help with the survey. Every one of them is doing so, including the ones who have signed up to provide HIPs. Over the past month, they have been asking every buyer, seller and renter to fill in a questionnaire, and the responses have been revealing. They show what the publicthe people whom we representthink. I will present the findings to the Minister, even though they will be slightly out of date. Why did we choose an area such as Minehead? Because it is self-contained and populated by predominantly older people with money and common sense. Funnily enough, they are the general public. That might come as a surprise to some people.
The customers were very keen to fill in the questionnaires, which have revealed that they do not understand what they would be getting themselves into. That is the message that is coming back through the estate agents. They are not sure what the packs will entail. They do not know the costs involved or the ramifications of the process. What is an energy report? It is a thing on the fridge that says A or B or C. That is what people think. They do not understand the proposals. Are we going to paint A, B or C on the side of peoples houses? That would be good in areas of outstanding natural beauty such as Exmoor. Oh, sorrythat is the public; we do not talk about them.
Opposition to HIPs is running at an all-time high, with three to one against them. People in the very group
that will allegedly benefit from the scheme were asked whether they thought that HIPs would stop gazumping, and 85 per cent. said no, they would not. Of course they would not. They might help a bit, but they are not going to stop it. We are going to have to do more than that. An even higher proportion of the interim results show that buyers will not trust HIPs because the seller has to pay the bill. Nobody trusts a report that has been paid for by the other sidethey want to find out for themselves. They would be silly not to. However, I suspect that when I present my survey results to the Minister, they will be ignored because they are from the general public.
Mrs. Curtis-Thomas: The individuals who will be charged with undertaking the inspections will not just have been swept up off the road. They will have had to undertake significant training. Many of them will already be chartered surveyors. When they carry out an energy assessment, they will be competent to do so. They will also be bound by professional standards, which will mean that they are impartial and will provide only technical advice. Does the hon. Gentleman think that he is misleading people when he suggests otherwise? Are not the vast majority of people in this country genuinely interested in their energy consumption? Would not they want to find out about that from a qualified individual?
Mr. Liddell-Grainger: Qualified? Reading university? I am told that Rightmove is now training people for free. The Government are so worried that there will not be enough providers that they are now giving cut-price courses. I know who I would depend on. It would be an estate agent, a lawyer or a mortgage lender who will go out and get the relevant information. This is not about telling people, You can have an A rating on your fridge.
This is wrong. People are not going to get a clear understanding of what the energy efficiency of their house is. How long will the scheme last anyway? Until the next lot of European directives comes through and we have to change the process again. Another 300 quid.
The Minister has not mentioned housing associations and I am not sure whether that issue has disappeared. My local housing association in Sedgemoor, SHAL Housing, asked me whether, under the new scheme, it would have to carry out a brand new energy rating every time a property was let. I could not answer that question, but perhaps the Minister will be able to. If that is the case, will the Minister look into the situation as a matter of urgency? I am sure that no one would want housing associations to have to fork out money every time a property was let. I would have thought that that assumption was probably wrong.
The Danish scheme has resulted in a 25 per cent. decrease in the market. If HIPs did not work in Denmark, they will not work here. I am delighted that the Bill has been scrapped and that the Government have seen sense. I am just sorry that £3 million was spent before that happened.
Mr. Clive Betts (Sheffield, Attercliffe) (Lab):
Some years ago, the Government introduced the draft Housing
Bill, which contained the initial proposals for HIPs. I was a member of the then Select Committee on the Office of the Deputy Prime Minister, which considered the proposals. I was also a member of the Standing Committee on the Housing Bill. Other hon. Members who are here today were also part of that process.
I began by making the basic presumption that the present house buying and selling processes in this country were not really adequate or fit for purpose. To begin with, however, I was not convinced that HIPs necessarily represented the right way forward. I therefore asked members of the Select Committee to take part in the discussions on the Housing Bill and to question Ministers and Members on the Opposition Front Bench. Eventually, I came to round to the view that HIPs were an appropriate way forward, although I did have some reservations and wanted to see certain elements of them changed.
There were certain givens involved in the house buying and selling processes that we needed to see incorporated into any system designed to deliver an appropriate process for our constituents. When individuals buy or sell a property, they are embarking on what is, for most of them, the most important financial transaction of their lives. Buyers and sellers are therefore entitled to receive and provide appropriate and adequate information about the property. That is a very simple point.
At the moment, people embark on that process with nothing more than an estate agents guideand we all know what that can mean in practice in many cases. The hon. Member for Bridgwater (Mr. Liddell-Grainger) talked about estate agents. Anyone can set themselves up as an estate agent. In this country, they need no qualifications at all to do so. There are some very good ones on whom I would be very happy to rely, but the reality is that many have no qualifications. The general public ought to be very concerned indeed that all they have to go on when buying a house is a brochure from an estate agent. The principle that the public should be protected by a system in which the seller provides information to the prospective buyer therefore seems a good starting point.
Secondly, whatever process we have, there will be costs. At present, there are search and survey costs and a whole variety of other costs, including estate agency fees. It seems to me to be reasonable that the costs should fall on the vendor rather than the purchaser. That protects first-time buyers who, by their very nature, are not sellers, and will therefore be helped by home information packs and home condition reports as they will not have to bear upfront costs. I shall deal with the point at which costs might be incurred in a moment.
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