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The inclusion of energy efficiency information for prospective buyers will influence builders. When they are thinking about how to market their properties and steal a march on their competitors, they will give much more consideration to including features that enable them to boast of excellent energy efficiency ratings. That could have a significant impact on their choice of materials, the design of the layout of the house to make the best use of sunlight and the microgeneration equipment that could be included. If we are going to be serious about tackling climate change, it is no good just
making grand speeches. It is a concern that should be addressed by all Departments across Government, not just by the Department for Environment, Food and Rural Affairs and the Department of Trade and Industry.
I welcome the inclusion in home information packs of energy efficiency as a significant step forward in increasing awareness of what we can do to make our homes more energy efficient. I hope that the inclusion of energy efficiency in HIPs will serve as an excellent example to all Departments of how measures to encourage energy efficiency can and should be included in all areas where the Government have influence.
4.30 pm
Angela Watkinson (Upminster) (Con): In the few moments that remain, I wonder whether I could reduce my speech to a few questions to the Minister, which I hope he will be able to deal with in his summing-up. They relate in particular to the home condition reports, which I assume from the statement yesterday that the Government will press ahead with and endeavour to make mandatory in due course.
For how long would the information in home condition reports remain valid? Would the vendor have to renew the information at, say, three-monthly intervals? If the property is taken off the market for more than 28 days, the pack has to be renewed. If the details are deemed to need updating when the property is off the market for a month, for how long are they deemed not to have changed while it is on the market? For example, would a two-year-old home condition report still be valid if the property had remained on the market during that entire period? What buyer could trust it? What seller would volunteer that information if it were not mandatory?
That could mean that the price of the property would have to be increased periodically to absorb the recurring cost of updated home condition reports. It is clear that the Government still intend to introduce home condition reports, but not yet. The usual strategy to make a house more attractive for sale is to reduce the price. Far from ensuring that the home buying and selling process becomes more certain, transparent and consumer friendly, while reducing stress and the number of failed transactions, that will create an additional complication.
How many of the idiosyncrasies that all homes have would a seller be required to declare? Should there be caveats such as the fact that television reception on Five is poor because the house is in a bit of a valley, the radiator in bedroom 2 does not work unless it is given a kick, or the oven is slow? Every home has a multitude of idiosyncrasies. Into what detail does a home condition report have to go? What about things such as squirrels, birds or even bats in the loft, or foxes under the garden shed?
More important, what would happen if that information were omitted? Who will verify the information that is provided? What will be the status of the information and what if there is a dispute between the seller and the inspector as to the content of the report? What obligation is there on a buyer to have their finances in order and to be in a position to exchange contracts when an offer is accepted? What
bar is there to prevent a seller from accepting a different offer while the sale to the first buyer is still in progress? What redress will a buyer have if a HIP is found to have been seriously misleading? Many people would be unable to afford to risk legal action when they have just incurred the considerable costs of moving home, but if the HIPs are not binding in law and caveat emptor still applies, there seems to be little point in them.
The Department's statement says that the third aim of the HIP programme is
“to encourage and support long term transformation of the home buying and selling industry by introducing greater transparency and competition to drive down costs and incentivise better service and clearer redress for customers.”
It is gobbledegook and I urge the Minister to abandon the entire scheme.
4.33 pm
Mr. Robert Syms (Poole) (Con): First, I draw Members’ attention to my interests in the Register of Members' Interests. I do not think that I have an interest, but given the way that interventions go in such debates one is never quite sure, so I think I had better declare it.
I warmly congratulate my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) on an impressive maiden speech. It included some fond stories of Eric Forth and Robin Cook, and a tour of his constituency, which, as he said, we have all got to know over recent weeks in this hot weather. I am sure that we all look forward to hearing a lot more from my hon. Friend, who I am sure will make a great contribution in future years in this House.
We have had an interesting debate. Some of us have lived with the issue of HIPs for a considerable time, and we sometimes wake up in the middle of the night in a cold sweat, thinking about the consequences of the measure. The Opposition’s position has been entirely consistent for the past half dozen years. [ Interruption. ] Of course, that is a great relief. As my hon. Friend the Member for Cotswold (Mr. Clifton-Brown) said, if one compares the costs for the 1 million to 1.5 million houses that are sold every year with the costs of the current system, one can see that the sums do not add up. Under the current system, someone can market their house or test the market at no cost to themselves. Under the Government proposals, however, there will be a substantial cost. Indeed, there will be a cost even if someone does not sell their home. Some people, of course, are unable to do so. We discussed all those matters when the Housing Bill was in Committee, and I am sure that we are on the right side of the argument.
I am a little confused about the Government’s thinking. I listened carefully, as I always do, to the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), who made a good case for the Government’s proposals. The Government are in a pickle, because if they want home condition reports to be successful they must build sufficient capacity. They will only do so if they make the scheme compulsory and specify a date for its introduction. Essentially, 7,000 surveyors must be trained, so there is a long lead-in time. If the system is voluntary, as many hon. Members have said, most people will not be prepared
to pay extra. Why would someone leave their job and spend £8,000, £9,000 or £10,000 on training if they are not sure of their prospects?
The Government have reduced capacity, because people who were thinking about training have realised that what seemed like a good career a few days ago no longer seems as good. The scheme proposed to include home condition reports in a computerised system or databank. Who will operate such a system if there is only a small number of such reports? Once again, capacity will be reduced. When my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) argued in Committee that if the scheme were worth while it should be voluntary, the right hon. Member for Streatham (Keith Hill), the then Housing Minister, said that housing is largely about chains, so HIPs would work only if the home condition report were compulsory for everyone. The moment that compulsion was removed, he argued, the benefits of HIPs would end and the system would fail to speed up. There will be problems in June 2007, because there are not sufficient surveyors to administer a new system introduced in a peak period for the housing market. The Government therefore decided to make the scheme voluntary, thus reducing capacity and probably preventing home condition reports from working.
Mr. John Gummer (Suffolk, Coastal) (Con): Was not all that information available to the Government from the outset? Experts warned of problems, and many of us wrote to them again and again to explain the facts. What has changed to make them introduce a voluntary scheme when they believed that it was manifestly wrong to do so at the outset?
Mr. Syms: I can only speculate about the reasons for the change. Third-term Governments in difficulty start to look for snags ahead. The housing market is important for growth, and I am sure that the Treasury has taken a view about the benefits and disbenefits of the initiative. Decisions have been made on other issues, and I suspect that they, too, are part of the reason. The rationale of HIPs, with which I disagree, has been destroyed to some extent by the removal of compulsion from a large part of the pack. The right hon. Member for Greenwich and Woolwich made an important point. He said that if an inspector is going to a home to prepare a home condition report, he can do the energy performance certificate at the same time. If the procedures are separated, the cost of the energy performance certificate increases, so the benefits of the scheme are reduced. The Government have some more serious thinking to do about whether to proceed with the other elements. My hon. Friend the Member for Surrey Heath (Michael Gove) posed many sensible questions about whether the remaining elements of the HIP would stand without the home condition report.
Returning to the point about the people who have trained, my hon. Friend the Member for Arundel and South Downs (Nick Herbert), who had to leave the Chamber earlier, gave me an e-mail that he had received, which provides the perfect example. Guy Frazier of West Sussex has been doing a course with SAVA college, which I think is associated with Reading university. He says he has spent almost £10,000 on the course and on travelling backwards and forwards. He is
£10,000 in debt and is very concerned about what that investment will bring him. I therefore make a plea to the Government. Instead of being spent on publicity, perhaps some money should go to supporting those who have taken the Government at face value, undertaken training and put themselves in debt. We heard earlier that although only 230-odd people have qualified, there are about 3,000 people under training. Unless they have some measure of certainty, they may feel that they have lost their money.
We have had an interesting debate, with good contributions from several hon. Members. The right hon. Member for Greenwich and Woolwich set out what he saw as the rationale for the scheme. My hon. Friend the Member for Bridgwater (Mr. Liddell-Grainger) reminded us of the good sense of the people of Minehead and his various surveys in his constituency. The hon. Member for Sheffield, Attercliffe (Mr. Betts) argued the case for the scheme. I believe that he also served on the Committee that considered the Bill which resulted in the Housing Act 2004, so he is a veteran of such debates.
The hon. Member for Crosby (Mrs. Curtis-Thomas) spoke passionately about her concerns and about safety in the home. The House listened carefully, particularly to her CV and all her qualifications and engineering experience. My hon. Friend the Member for Cotswold, who is a veteran of the 2000 Bill, presented some compelling figures. The debate continued with the hon. Member for Llanelli (Nia Griffith) setting out her views, and my hon. Friend the Member for Upminster (Angela Watkinson) articulating some important questions, which I hope the Minister is able to answer.
The rushed decision, just before the recess, to change the nature of the game has probably raised more questions than it has provided answers, especially for many of those who are training in the hope of becoming home inspectors. I hope that when the Minister winds up the debate, he can flesh out the Government’s thinking. It is clear that the scheme as it is constructed at present will not work. At the beginning of the debate, we heard from the Minister for Housing and Planning about trials in areas, but home condition reports cannot be compulsory in some areas but not in others.
Mr. Syms: Because people do not buy homes in regions. They buy homes on a national basis. The scheme will not work without a national chain.
Rob Marris: May I point out to the hon. Gentleman that under the Law of Property Act 1925 covering England and Wales, which came into effect on 1 January 1926, not all areas were areas of compulsory registration? It varied round the country for the following 70 years. We had a differential system then.
Mr. Syms: The hon. Gentleman has waited years to make that intervention in the House. I am glad I gave him the opportunity to do so, which he did very speedily. I will read it carefully tomorrow and perhaps give him a more considered reply.
Home information packs are an important matter that will impact on all home buyers and sellers. I do not think the Government have got it right. We were right in our initial opposition. The Government have moved away from their original proposals and will have to think carefully about the viability of the whole scheme. We have had an interesting debate in an interesting week, and I look forward to the Minister’s remarks.
4.44 pm
The Minister for Local Government (Mr. Phil Woolas): This has been a fascinating debate, because it has flushed out the three types of Conservative Member in this Chamber. First, there are real “conservatives”, who oppose change because they oppose change. That position is not intellectually coherent, but it is at least understandable and consistent. Secondly, there are those who want the status quo because their mates have told them that it is best. Again, that is not intellectually coherent, but I suppose that it is at least politically consistent. Finally, there are those who frighten me, and they want the unfettered free market. As my hon. Friend the Member for Crosby (Mrs. Curtis-Thomas) has pointed out, one would not buy a car without an MOT or a service logbook, but one would sell a car without an MOT or a service logbook if the market regulation allowed. The Conservatives who frighten me are like Del Boy’s friend Boycie, who would sell a car without that guarantee.
The hon. Member for Surrey Heath (Michael Gove), whom I welcomed into this House—not least because it got him off the airwaves—falls into the last category of the unfettered free marketeer. Perhaps we should not be surprised. One amusing thing to do in the evening when waiting for a vote is to read the writings of the hon. Member for Surrey Heath, who has worked for the BBC—as did I—and still writes for The Times. This is what he said about the housing market in 2002:
“the housing market is a high stakes poker game”.
With great enthusiasm, he advocated approaching home selling and buying like a gambler with a hand of cards:
“Nerve shredding as the process can be, poker has proved an invaluable help because it teaches you to wait, as the antes are raked up by the other players and your reserves of patience (and money) dwindle.”
He is consistent in his attitude to the housing market: let the unfettered free market decide.
The hon. Gentleman recently wrote about his 1995 biography of his then hero, Michael Portillo, which was subtitled, “The future of the right”. He wrote that it
“ranks up there with Robert Maxwell’s life of Ceausescu and David Steel’s moving 1985 manifesto for government, Partners in One Nation, as a work whose prescience left just a little to be desired.”
I suggest that his predictions about the future of the housing market under our policy will be just as accurate.
Mr. Hayes: Will the Minister give way?
Mr. Woolas:
When I have finished exposing some more of the points of view of the hon. Member for Surrey Heath—although I will not talk about Europe,
because I have only six minutes and it would take an hour to expose the difficulties on that subject.
Conservative Members have said that the policy is dead, but they have also tried to criticise it. Either it is dead or it is not dead, and I do not think that there is an alternative—if anyone has found an alternative, I would be grateful to hear about it. All the evidence suggests that buyers and sellers are unhappy with the way in which properties are bought and sold. In many cases, people lose hundreds of pounds on abortive surveys and searches, and those who are least able to afford such costs often bear the brunt.
The current system is not working and consumers are dissatisfied, which is hardly surprising. There is currently an almost complete lack of transparency. Key information about a property becomes available only after terms have been agreed. In the meantime, people make an offer based on limited information and immediately begin paying out for searches, surveys, legal fees and other documents. If problems then come to light and the transaction fails, those costs are all wasted. The costs are often duplicated, too, when another potential buyer pays out for the same information all over again.
Another cause of transaction failure is the length of time that it takes for the process to go through, and the consequential increased risks of things going wrong. The process in this country takes twice as long as the European average. Delays, which have a knock-on effect through the chain, often result from buyers and sellers up and down the chain asking for and obtaining information on a piecemeal basis. Only when every link of the chain is in place can those involved be confident that their sale or purchase will go through. The Government’s research shows that almost 30 per cent. of transactions fail after terms have been agreed, and more than £350 million a year is wasted in this way. Those costs are extremely serious for the people who bear them—for hard-working families who need to move home and for young people trying to get on to the first rung of the housing ladder. They are also a cost to the economy as a whole and represent a substantial wasted resource.
In those circumstances, no one can seriously argue that the market is working well and should be left alone—but that is what the Opposition want us to do. HIPs will give buyers the information they need in order to make an informed choice about the property before they make an offer, rather than later when large amounts of time and money have been spent trying to get hold of it for a purchase that may ultimately fail. More information up front will reduce delays and failures, cut duplicated costs and help to reduce the number of failed transactions, which cost consumers £1 million a day.
Moreover, as my hon. Friends have said, first-time buyers stand to benefit most from the policy. One of the main benefits of HIPs is that those first-time buyers will not have to spend hundreds of pounds on surveys and searches, and then find that the money that they have struggled to save has been completely wasted when their purchase collapses.
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