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Session 2006 - 07
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Public Bill Committee Debates

Home Information Pack (No. 2) Regulations 2007



The Committee consisted of the following Members:

Chairman: Mr. Bill Olner
Byers, Mr. Stephen (North Tyneside) (Lab)
Cawsey, Mr. Ian (Brigg and Goole) (Lab)
Hesford, Stephen (Wirral, West) (Lab)
Holmes, Paul (Chesterfield) (LD)
Howarth, Mr. George (Knowsley, North and Sefton, East) (Lab)
Hurd, Mr. Nick (Ruislip-Northwood) (Con)
Jones, Mr. Kevan (North Durham) (Lab)
Moran, Margaret (Luton, South) (Lab)
Scott, Mr. Lee (Ilford, North) (Con)
Shapps, Grant (Welwyn Hatfield) (Con)
Smith, Ms Angela C. (Sheffield, Hillsborough) (Lab)
Spellar, Mr. John (Warley) (Lab)
Stuart, Mr. Graham (Beverley and Holderness) (Con)
Stunell, Andrew (Hazel Grove) (LD)
Walker, Mr. Charles (Broxbourne) (Con)
Watts, Mr. Dave (Lord Commissioner of Her Majesty's Treasury)
Wright, Mr. Iain (Parliamentary Under-Secretary of State for Communities and Local Government)
Sara Howe, Committee Clerk
† attended the Committee
The following also attended, pursuant to Standing Order No. 118 (2):
Jackson, Mr. Stewart (Peterborough) (Con)

Third Delegated Legislation Committee

Thursday 18 October 2007

[Mr. Bill Olner in the Chair]

Home Information Pack (No. 2) Regulations 2007

2.30 pm
Grant Shapps (Welwyn Hatfield) (Con): I beg to move,
That the Committee has considered the Home Information Pack (No.2) Regulations 2007 (S.I. 2007, No. 1667).
The Chairman: With this it will be convenient to consider the Housing Act 2004 (Commencement No. 8) (England and Wales) Order 2007 (S.I. 2007, No. 1668), and the Housing Act 2004 (Commencement No. 9) (England and Wales) Order 2007 (S.I. 2007, No. 2471).
Grant Shapps: That home buying and selling could be a lot easier is beyond doubt, but that is not the subject of today’s debate. The real question is whether home information packs—HIPs—make it easier. Our argument is that that is certainly not the case, and that it is leading us down the garden path into more bureaucracy and more red tape than the housing market requires or can stand.
The Government are fond of telling us that we need HIPs to protect the energy performance certificate element. That, however, is a red herring. The point of energy performance certificates, a mandatory function resulting from an EU directive, is to give home buyers an idea of the energy performance of prospective purchases. We believe that that could be implemented far more easily, more cost effectively, and more cheaply and quickly, through the simple process of requiring energy performance certificates to be provided before a house is put on the market. That could be easily achieved—it would not require the wrap-around of the home information pack. The pack has become nothing more than a fig leaf with which to cover the embarrassment of Ministers, who have taken us a long way down that route but who now realise that there is little or no point in it.
It is not only we who think that. As recently as last year, through the Northern Ireland Office, the Government said:
“we do not believe that a home information pack is necessary to ensure compliance with the Directive.”
For some reason, therefore, it is not required in Northern Ireland. But it is required here.
I have been wondering about that £4 million. The Government have a partner in those trials—the Association of Home Information Pack Providers. Yesterday, at a meeting in the House, I asked the association whether it could tell us the outcome—information that we had not been able to extract from the Government, despite asking parliamentary questions. I asked how the trials had worked out but, interestingly, the association did not know. The message this morning from the association is this:
“Part of the agreement with the Government was that they would share the independent research by MORI from the 6 locations with us. They have not done so.”
The Government have kept their partners in the trial in the dark, yet they have seen fit to introduce HIPs. It simply does not make sense to deny the public, Parliament and even their partners information from the trials, and then to introduce the packs. Fortunately, I suppose, we know how HIPs have been operating in the marketplace. We have evidence from their first two months of operation. The Government are keen to tell us, when we cite pretty authoritative sources such as the Royal Institution of Chartered Surveyors, that we are citing only one industry body. However, RICS has done research showing, for example, that the number of three and four-bedroom homes coming on to the market is down by 37 per cent.
In order to help address Ministers’ concerns, I shall quote from some other leading industry bodies. For example, the Council of Mortgage Lenders says,
“We are disappointed that as yet the Government has done little to simulate the potential impact of HIPs, and we urge them to do so urgently.”
They are wrong, of course. The Government have tried to judge the impact of HIPs—they have done the work—but they will not release the data.
The National Association of Estate Agents says,
“We have consistently stated that the Government’s, and our, desire to improve the Home buying and selling process will not be improved by the introduction of HIPs.”
The Law Society warned that HIPs
“could skew the conveyancing market and could encourage the improper use of referral fees, possibly creating a lack of transparency and choice for consumers.”
If the Law Society is against it, what do the Government say? One arm of government, the Better Regulation Commission, warned that the new regulations would impose
“additional administrative burdens without adequate justification”.
The industry is pretty conclusive in its damning indictment of HIPs, but what do the people who are operating them say? A HIPs provider, who stands to gain financially from the system, sent me an e-mail yesterday. It stated:
“Whilst we always knew what a complete waste of time these were I would like to briefly make my point...We have had HIPs for nearly 3 months now and I do not believe one applicant has asked to see a HIP or EPC or shown any interest in one whatsoever. Vendors couldn’t give”—
the next phrase may be unparliamentary, so I shall leave it out. However, people are obviously not that interested, they do not understand them and they do not want to pay for them. The e-mail continues:
“Therefore as we have always known it does absolutely fail to speed up the house sale process. All it does is cost vendors money and cause confusion. If they bring it in for all properties soon and impose the ‘must have it before marketing rule’—
that will not come into effect until the end of this year—
“we will all grind to a halt!”
That is straight from the horse’s mouth—from only one of the companies that has an interest in supplying HIPs. Even those people think that the system is not working.
The only people who now think that HIPs are working are the Government and the Association of Home Information Pack Providers. The industry thinks that they do not work at all. As we debate the introduction of regulations for three and four-bedroom houses, one overarching question remains completely unanswered. Why have the Government failed to come forward with a date for the introduction of HIPs on one and two-bedroom houses? If the system is so genuinely wonderful, surely it should be introduced with the greatest possible haste.
Is there not a contradiction at the very heart of the Government’s claims for HIPs?
Mr. Kevan Jones (North Durham) (Lab): On a point of order, Mr. Olner. I am listening carefully to the hon. Gentleman’s speech. Is this an Adjournment debate, or are we debating the detail of the regulations before the Committee—which I believe to be the job of Standing Committees?
The Chairman: The regulations are being debated under the negative procedure. I shall therefore give the Committee some leeway, and not accept that as a point of order.
Grant Shapps: Thank you, Mr. Olner, but I am speaking on the specific point of one and two-bedroom houses, as well as about the commencement orders on three and four-bedroom houses.
On Tuesday night, the Minister for Housing failed to show up for a long-standing engagement at the annual conference of the Association of Home Information Pack Providers, sending her junior instead. When I asked AHIPP what had been said, it kindly provided the text of the junior Minister’s speech, in which he makes it clear that volatility and uncertainty in the marketplace, combined with unusual market conditions, means that this is not the time to announce the introduction of one and two-bedroom HIPs. If that is true, and if the Government accept that introducing HIPs introduces volatility to the market or creates additional volatility, how can it make sense today to vote through legislation for three and four-bedroom HIPs? The situation is clearly contradictory.
On the other side, the Government always claim that they have been consistent, so if they honestly believe that HIPs will somehow improve the operation of the marketplace, making home buying and selling easier, surely they should not only approve three and four-bedroom HIPs, but introduce one and two-bedroom HIPs. Will the Minister—finally—tell us, the industry and home buyers and sellers when the Government intend to introduce one and two-bedroom HIPs? I suspect that he will say that the market is volatile. But if it is volatile for one and two-bedroom homes, it must be for three and four-bedroom homes, so there is no reason why the legislation should be passed today.
2.41 pm
Paul Holmes (Chesterfield) (LD): When Lewis Carroll wrote “Alice’s Adventures in Wonderland”, many people speculated on how he came up with the ideas. Was he taking substances that were then legal but are today illegal? I favour the theory that he spent some time studying the workings of Parliament. I understand that he spent some time observing and reporting the work of Parliament in Victorian times, and clearly he got some of his crazy ideas from the procedures of this place. Here we are today, on 18 October, considering three pieces of delegated legislation that variously came into effect on 2 July, 1 August and 10 September. Today, three months, two months and one month after those dates, we are debating that legislation. To a member of the public, it must seem a crazy way to proceed when something of such importance, because it is either successful or a flop, is not debated until well after it has come into force.
Debating this legislation long after it has been introduced epitomises, as we said in a debate on the Floor of the House a couple of weeks ago, the rushed and chaotic process by which the Government introduced HIPs, with frequent changes of content, delays and, finally, HIPs’ application to four-bedroomed and then three-bedroomed homes.
There are two documents on introducing these measures, first to four-bedroomed homes and then to three-bedroomed homes in September, but they do not specify what constitutes a four-bedroomed or three-bedroomed home. When HIPs came into effect, there was much speculation that, in order to avoid a HIPs package, people with a four-bedroomed home might say that it was a three-bedroomed home with a study, and that those with a three-bedroomed home might say, after 10 September, that it was two-bedroomed home with a study. One flaw in the legislation is that it does not cover such an obvious way in which a seller, if they wanted to avoid HIPs, could do so simply by changing the name of a room and saying that it was used for some other purpose.
One important issue that emerged in the first two weeks after the introduction of HIPs for four-bedroomed homes was that of personal versus official searches. Searches are dealt with in paragraph (j) on page 9 of the regulations. The paragraph explains the different ways in which one would lodge a personal or official search. Only two weeks after HIPs came into use—about the second week of August—there were already cries from people involved in some sections of the market, saying that personal searches were no longer being accepted. Mortgage lenders were considering HIPs with a personal search, and saying, “No, we don’t accept that. You’ll have to have it done again through an official search.”
For a year or two before HIPs came in, personal searches had become widespread, with people and organisations competing with solicitors to offer a cheaper search. If personal searches were accepted before HIPs came in, why have they not been accepted since? In August, when there was quite a fuss, did the Government undertake any surveys of how such searches worked in practice, and consider how they related the to definitions in the legislation. Was there in fact a problem with personal, as opposed to official, searches? Both are named in the legislation as being equally valid, but apparently they were not being accepted as such in the marketplace. Was that simply a blip, was it a real problem or was it a scare story? Have the Government evaluated the situation? Do they have any hard evidence? If there is evidence that personal searches, having previously been accepted, were being rejected perhaps because of this legislation, will the Government have to come back with revised legislation at a future date?
The general arguments about HIPs we have already heard expounded. We had a long debate on that a couple of weeks ago, and I will not reiterate all the points that were made then. What is the value of HIPs? Potentially, there could be a lot of value in them, as I said before. Everyone agrees on the value of the energy performance certificate, but that could be a free-standing measure, separate from HIPs.
The big argument in favour of HIPs is that if they work properly, they will assist the consumer greatly—a point to which the legislation refers. If HIPs provide simple, clear packages of acceptable statements on the results of searches, and of deeds of ownership, that will speed up the process for the consumer. Inevitably, some of the organisations that make money from repeat searches are not very keen on HIPs. RICS, obviously, is not so keen on HIPs because they could cause its members to lose business. The Law Society also makes money from repeat legal work on houses when sales fall through. The more searches that are done and the more people who go through the process, the more business its members get, so it is obviously not so keen on HIPs.
Equally, the Association of Home Information Pack Providers, which was quoted extensively in the debate a couple of weeks ago, is in favour because it is on that side of the market. Surely the role of the Government, the House and the Committee is to make a more objective assessment of the value, if any, of this process. It is difficult to achieve that, however, when there are so many unanswered questions.
At what point will HIPs, if they are working effectively for three and four-bedroomed houses, be extended to one and two-bedroomed houses? As has been said, if the Government have a particular view on this issue, they should share it with us today. They should explain the rationale for not extending HIPs to one and two-bedroomed houses, and tell us when the scheme will be extended.
How are we going to evaluate the success so far, after two or three months of operation, of HIPs? Will Opposition Members and members of the public have access to an objective evaluation of the information? The Government kindly offered Members one-to-one meetings to discuss the matter during the previous debate. That is very welcome and we will take them up on that offer, but it excludes other people and the public at large. We have not seen the many studies; we have not seen any objective information from the Government on how the regulations are working out in practice. For example, are there problems with personal searches being accepted? What about the definitions of three and four-bedroomed houses? Will the Government commit to a date when they will release all that information, so that we can evaluate whether HIPs, in this partial form, are successful and are speeding up the process and helping consumers? I am not as bothered about the people providing the services as I am about the consumers who are supposed to benefit. When will we have that information, so that we can judge whether the scheme should be extended to one and two-bedroomed houses, whether it is worth including home condition surveys, or whether the whole thing should be scrapped because it is counter-productive and not working?
I do not subscribe to the school of thought that says we should just scrap the scheme on the basis of some newspaper reports during the summer, as that is a flimsy and flawed way to make policy and to implement something that could be so important to the consumer. However, if there is evidence that it is a waste of time, we should know about it, so that we can take action and vote accordingly. We cannot do that unless the evidence is in the public domain. One-to-one talks are not enough; will the Government commit to releasing the information for a proper, public independent analysis by the end of the autumn at the latest?
2.50 pm
Andrew Stunell (Hazel Grove) (LD): I support what my hon. Friend the Member for Chesterfield said. We have raked over this issue many times in the past 18 months and it may be beginning to irritate some on the Government Benches. However, that raking over has been caused by their own performance. Nobody could claim that this project has been the Government’s finest hour, or even their finest two years.
During its rather bumpy progress through the procedure the scheme succeeded in sabotaging the careers of a number of people who were committed to the project and undertook the necessary training. I cannot be the only member of this Committee who has received representation from constituents who invested substantial amounts of their own capital in training to fulfil a business plan that has been wrecked by the delays and mismanagement of this project.
It has not been the Conservative party’s finest hour either. I remember the Conservatives’ first Opposition day motion, which said that they wanted to scrap the lot. It was only during the debate that their Front-Bench team became aware that it was not cool and green to get rid of energy performance certificates. Even so, I noticed in that debate that the Tory Back Benchers whose pagers were not switched on carried on calling for the complete abandonment of the whole scheme.
Despite the train crash that it has become, there is a very important element of the home information packs: providing consumers with the information that they need to judge the environmental performance of their homes and prospective homes. The concept is right, but it started to go wrong when, for no reason that anyone has explained, the Government delayed publication of the draft regulations. Because they delayed that publication time after time it was impossible to make a timely start to the pilot studies, which could be based only on the propositions contained in those draft regulations.
The scheme has come off the rails, too, because the conclusions and the analysis from those pilot studies have never been brought to bear on the regulations that we have now. One would have supposed that the right process to follow was to have the pilot studies, to bring them to a conclusion, to analyse the results, to notice what needed fixing, to fix it in the revised regulations, to ensure that the training programme was in place and that sufficient people were trained to implement it and then to launch the full scheme. Yet practically none of that has happened in the way that it should have done.
We know that the partial pilot studies—the initial results from the first bit of the pilot studies—produced some amendments. Indeed, that evidence was given to the House of Lords Merits of Statutory Instruments Select Committee by the civil servant from the Department, who said that the preliminary results from the early pilot studies had led to changes in the regulations that have come forward. That is in the information notes that were provided for this Committee. In other words, a partial analysis produced a partial reform and change to the regulations. Most of us, logically, would expect that further amendments to the regulations would present themselves as necessary when the full pilots were completed.
I looked at paragraph 7.23 of the explanatory notes, which states:
“Close attention was also paid to the progress of the national voluntary dry run and area trials of home information packs...Over 4,000 packs were produced as part of the trials which are looking particularly at”
what they describe as hone information reports. “Honed” is the last thing that this is. It is perhaps a characteristic typographic error. The results of the trials are being independently assessed by MORI. That is in the explanatory notes provided for the Committee today, when we are being invited to sign off the regulations. That is a clear statement that the area trials independent assessment has not yet been completed or is in any way in the course of action. Of course, that might be a coded way of saying, “We have got the report, but we do not want to tell you.” If that is the case, I invite the Minister to come clean with the Committee and say so clearly.
Rather than the logical process of testing, revision, training and launching, we have had the blundering into the three and four-bedroomed house situation. My hon. Friend the Member for Chesterfield has already asked the key question about the one and two-bedroomed houses and when they will be considered. If the Minister cannot give us a date and is not prepared to concede the Conservatives’ rather partisan point that the Labour Government have perhaps wrecked the housing market, can he at least tell us what criteria he and the Department will take into account before they bring forward the plans for one and two-bedroomed homes? What are going to be the criteria when they sit around the table and ask, “Shall we go on 1 December or shall we not?” It is entirely proper for the Minister to tell the Committee what is going to happen.
I have some questions for the Minister. Have those pilot studies officially ended, now that we are into the compulsory three and four-bedroomed stage? Have the full results been written up and is everything in the hands of MORI, or has MORI told the Government what the outcome of that assessment is? Will he give an undertaking that, whatever else happens, he will publish those results before we are presented with the statutory instrument for one and two-bedroomed homes? In other words, at least part of the process ought to be informed by the results for the whole of the pilot study.
In conclusion, it seems that the project would make an admirable case study on the implementation of Government policy—not. I hope that, when the Communities and Local Government Committee considers the Department’s annual report, it will give some consideration to investigating what has happened—I understand that it will consider that report at one of its forthcoming sittings. I was going to say that it should investigate what has gone right and what has gone wrong, but the first part of such a report would be comparatively short.
Even for those of us who started off simply as critical friends of a bright idea, there is the utmost difficulty in giving wholehearted support to the Government’s scheme as they have managed to bungle and mismanage it today. The Minister owes the Committee some serious answers to the genuine criticisms that abound.
3pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): May I say what a privilege it is to serve under your chairmanship for the first time on the Front Bench, Mr. Olner? We share a birthday, I believe.
The Chairman: Not the same year though, unfortunately.
Mr. Wright: I do not think so.
This has been an interesting debate. I do not want to start on a negative tack, but I am bemused at the timing of the debate.
Grant Shapps: It should have been several months ago.
Mr. Wright: The hon. Gentleman says from a sedentary position says that it should have been a few months ago. That is exactly right, because there should have been some degree of discussion and debate about this. However, the Opposition Front Benchers chose not to do that. In her statement to Parliament on 22 May, when she was Secretary of State for Communities and Local Government, my right hon. Friend the Member for Bolton, West (Ruth Kelly) announced to the House that the start date for home information packs for properties of four bedrooms and above would be 1 August. She said:
“We will extend to smaller properties as rapidly as possible, as sufficient energy assessors become ready to work. As we see the number of accredited assessors rise, so more properties will be included in the system.”—[Official Report, 22 May 2007; Vol. 460, c. 1108.]
So the decisions set out in August, when we rolled the scheme out to houses of four bedrooms and above, implemented that parliamentary announcement.
To clarify, revised regulations were laid before Parliament on 11 June, following the commencement order for four-bedroomed property sales on 8 June. We also published a statement on 11 June, “Home Information Packs Implementation Update”, which set out the details of the implementation proposals. So the Opposition had that opportunity to hold a debate in the House on the regulations and our proposals for a phased implementation. I understand that the other place had a debate on this, but a debate did not take place in the House of Commons. Opposition Front Benchers could have had something like 40 days between when the commencement order was produced, and the regulations laid, and when we broke up for recess at the end of July, but they chose not to do it. However, now that we have come back and we have seen four and three-bedroomed properties rolled out as part of the HIPs process, and all the indications are that it has been as smooth as can be expected, we are having a debate. That shows tactical errors and hopeless misjudgment on the part of the Opposition parties.
Members of the Committee have mentioned various things, and I would like to cover all of them in detail. May I say what a pleasure it is to debate with the hon. Member for Welwyn Hatfield? I enjoyed the HIPs debate on 10 October and I have enjoyed his contribution today. I completely disagree with everything that he has said; it showed a great deal of misjudgment on his part, but I greatly enjoyed it. I do not think that he is taking his party with him on this issue. I will give him the benefit of the doubt and accept that he genuinely thinks that energy performance certificates are appropriate, in contrast to many eminent members of his party. I believe that the hon. Member for Meriden (Mrs Spelman) is still party chairman, although I may be wrong on that. It could be Lord Ashcroft—I am genuinely uncertain about that.
It is important to roll out EPCs because they will have a real impact in setting the challenge of tackling climate change. Carbon emissions from our homes contribute about 27 per cent. of our CO2 emissions, and we need to tackle that as rapidly and as dramatically as possible. EPCs are a way of doing that, the management structure and the architecture are helped through HIPs, and it would be wrong to separate out EPCs and HIPs, so I am confused about the Conservative party’s view.
Mr. Graham Stuart (Beverley and Holderness) (Con): Why then did the Government believe that they could be separated in Northern Ireland without any ill effect?
Mr. Wright: The hon. Member for Welwyn Hatfield mentioned Northern Ireland and I will come to that, but it is important to point out that HIPs and EPCs together can have tangible benefits. They will help to lower family fuel bills by hundreds of pounds, cut millions of tonnes of carbon that are being pumped out into the atmosphere and help reduce the millions of pounds that consumers waste, both in buying and selling homes and in having energy efficient homes. That is so important, and I do not think that the Opposition are taking it into account.
Mr. Stuart: I am grateful to the Minister for giving way again. He is always a stylish speaker and enjoyable to listen to, as is my hon. Friend the Member for Welwyn Hatfield. However, it is with some desperation that the Minister is trying to tie the environmental benefits of a European Union directive-driven measure which no Member of the House can stop with that of HIPs—a failed concept, as my hon. Friend has pointed out, and one that no longer delivers the basic function that it originally set out to deliver.
Mr. Wright: I am happy to allow the hon. Gentleman to intervene on me again, but I wonder whether he agrees with the idea that, for the past generation or so, the process of buying and selling houses has been opaque and stressful and has cost consumers millions, if not billions, of pounds. HIPs is a great way forward in helping to reform that process. EPCs are an essential part of HIPs to encourage a greater level of information and transparency and, equally important, to ensure that climate change is addressed. If those principles are not correct and the hon. Gentleman does not agree with them, I am more than happy to give way. He chooses not to intervene. I hope that that is recorded.
Over the past few weeks and months we have seen a relatively smooth implementation of HIPs and EPCs for properties of three or four bedrooms or more. I will come to that, and to the state of the housing market, at some length later on.
A number of hon. Members have mentioned area trials. That is an important point. I want to be very clear. It is important that we get the findings from the area trials, but as yet we have had only preliminary findings. We are at a very early stage in the house buying and selling process. Full conclusions from the area trials will be available, but only once transaction completions occur. I suggest that it is only at that stage that we can measure the impact on buyers.
Trials ended in April and a transaction completion could be completed some months after. That is one of the things that we are trying to tackle as part of the HIPs process. We expect to receive a report by the end of the year, but that will only be when transactions are completed. There is always a lag between marketing a property and transaction completion. I am sure that Opposition Members can recognise that.
Andrew Stunell: I gather that, according to Rightmove, the average number of days of transaction time is now 85. Counting on from April, a very high proportion of those would now be completed, and obviously they will all be completed by the end of the year. Is the Minister undertaking to produce that information prior to coming back to the House to talk about two and one-bedroomed homes?
Mr. Wright: I will come to one and two-bedroomed homes later on. There is varying information. The average time from marketing to the completion of a transaction could be as much as six and a half months. Sometimes it is nine months. It is important that we get the full range of information before we go to publication.
Grant Shapps: I am still confused about the point of commissioning six different trials of home information packs if the original intention was not to release the results before introducing the packs to the entire nation. What is the point in wasting £4 million of taxpayers’ money if there was never any intention of releasing the results?
Mr. Wright: The hon. Gentleman knows that that is completely false. We are going to publish the findings, but we have only emerging findings at the moment because the process has not been completed. That is fairly obvious.
Let me move on to the central point: the state of the housing market, which the hon. Member for Welwyn Hatfield mentioned when he was talking about my contribution to the AHIPP conference earlier this week, and the subsequent roll-out to one and two-bedroomed properties. Listening to him reminded my of an old Woody Allen gag in which two ladies are in a restaurant. One says, “What terrible food,” and the other says, “Yes, and such small portions.” He criticises the legislation on HIPs as being appalling and also criticises us for not rolling them out completely. He holds an erroneous and illogical position.
The housing market was volatile over the summer. There was the sub-prime mortgage crisis in the United States, and there were interest rate changes and the unusual phenomenon that many mortgage holders are coming to the end of a two-year fixed period and are now going to remortgage, which will have an impact on mortgage costs. There was also the Northern Rock issue—the first run on a bank in 150 years. It is perfectly reasonable to monitor the situation extremely closely in those incredibly unusual circumstances. There was an extremely interesting article by Alex Barker in the Financial Times this week about the state of the UK housing market, which I urge all hon. Members to read. It says:
“Few have forgotten that the country’s last housing boom, in the 1980s, ended in tears, with a crash in home prices and two years of wider recession. Unemployment doubled in 1990-92 from 1.5m to 3m. At the worst point, in 1991, one in 130 people lost their home. The big difference between then and now, however, is inflation. Inflation today is around the 2 per cent. target set for the Bank of England. But in the 1980s it was out of control and, within the space of a year, the government had doubled interest rates from 7.5 per cent. to 15 per cent.—where they remained for a year—after inflation almost trebled from 3.4 per cent. in 1986 to 9.5 per cent. in 1990.”
It is not responsible government to play fast and loose with the housing market. It is absolutely essential that anything that might have an adverse impact is considered with the gravest degree of consideration. I do not want to go back to the situation in the 1990s, when people were losing their homes because of the gross economic incompetence of the Conservative party.
Grant Shapps: Is not the Minister’s argument completely inconsistent? He tries to argue that HIPs for one and two-bedroomed homes and HIPs in general will make home buying and selling more simple and therefore more effective and streamlined. Surely, in his view, that is exactly what is required in an unstable housing market, so why are not we bringing them in?
Mr. Wright: I am saying that the roll-out of HIPs for three and four-bedroomed homes has worked extremely well and has been handled by domestic energy assessors and HIP assessors extraordinarily well, but that we do not want to do anything in this extremely unusual market. We now have 60 per cent. of the market provided for by HIPs. That is working well, but we want to ensure that we have all the relevant information before full roll-out. That is extremely responsible government; if the hon. Gentleman disagrees, that shows that the Tories have not moved on from the early 1990s.
The hon. Member for Chesterfield asked about four-bedroomed properties being marketed as being three-bedroomed plus, which is quite an old issue. In south London, which I know is not reflective of the entire country, but the principle is the same, an average four-bedroomed property goes on the market for around £620,000, and a three-bedroomed property goes on the market for £460,000. There is a substantial increase in price between three and four-bedroomed homes and I do not think that a £300 HIP is going to stop someone from marketing a property as four-bedroomed. That certainly has not been the case.
Paul Holmes: The Minister says that he does not think that has been the case, but we have had three months to judge it on. According to all the surveys and statistics that I am sure the Government must be collecting, what is the evidence?
Mr. Wright: We are looking at that now to make sure, but all the evidence shows that people are not marketing their properties as three-bedroomed plus. We have not seen any evidence of that. If the hon. Gentleman has anecdotal evidence, I am more than happy to listen.
Mr. Lee Scott (Ilford, North) (Con): The Minister spoke earlier about responsible Government. Surely a responsible Government would have looked at the pilot results and studied those before ever introducing the measure in the first place.
Mr. Wright: It is extremely wrong of the hon. Gentleman to say that we are not looking at this closely: we are. Area trials are going on, but we have not completed the full process.
Let me move on to deal with two fundamental points. First, on personal searches, which the hon. Member for Chesterfield mentioned, 27 out of the top 30 mortgage lenders—around 88 per cent. of the market—accept them. Solicitors accepted more than 650,000 personal searches on behalf of their clients, which is about 40 per cent. of the market, in 2006 alone.
It is a fundamental point that HIPs are helping to reduce costs and create a more transparent housing market for consumers. As I have mentioned already, about 85 local authorities have already reduced their search costs, some by £100. Personal searches are allowable.
Paul Holmes: The figures that the Minister has just given refer to 2006. However, we are talking about the introduction of HIPs, just in the last two or three months in 2007. Was there any evidence at all during the summer that, as part of HIPS, mortgage lenders were now more likely to say, “We are not accepting personal searches,” or was that just a scare story in the media?
Mr. Wright: It is a scare story. Forgive me for not being completely clear about that. The latest edition of the Council of Mortgage Lenders handbook in June 2007 shows that 27 out of the 30 top lenders—the 88 per cent. I mentioned—accepted personal searches.
HIPs are working smoothly: they are going out into the field and ensuring that we have greater transparency and they are cutting costs and helping climate change. I would have thought that all hon. Members would agree and support such a move. I cannot believe that the hon. Member for Welwyn Hatfield and his party have brought this matter to the Committee today. I find it odd, tactically inept and not in the best interests of home buyers and sellers.
Grant Shapps rose—
The Chairman: You started so you can finish.
Grant Shapps: I was confused by the Minister’s last statement, which suggested that we are the ones moving the Government’s statutory instruments. The fact is that the other place voted against HIPs, but that did not stop this Government from trying to bring them forward. They failed to introduce the statutory instruments as they could have done for three and four-bedroomed houses, because they did not want to submit themselves to the scrutiny. For obvious reasons—it transpires that full research costing millions of pounds in taxpayers’ money has never been released, even to the Government’s own partners in this exercise—it is hardly surprising that we have, as the Minister describes it, dragged them here kicking and screaming to debate this proposed legislation.
It is now beyond any reasonable doubt that every expert in this field has ridiculed HIPs. The industry does not want them and the market does not need them. That is why we will scrap them. I call on the Minister to do the same thing and get rid of this appalling piece of legislation.
Question put:—
The Committee divided: Ayes 10, Noes 5.
Division No. 1 ]
AYES
Byers, rh Mr. Stephen
Cawsey, Mr. Ian
Hesford, Stephen
Holmes, Paul
Jones, Mr. Kevan
Smith, Ms Angela C. (Sheffield, Hillsborough)
Spellar, rh Mr. John
Stunell, Andrew
Watts, Mr. Dave
Wright, Mr. Iain
NOES
Hurd, Mr. Nick
Scott, Mr. Lee
Shapps, Grant
Stuart, Mr. Graham
Walker, Mr. Charles
Question accordingly agreed to.
Resolved,
That the Committee has considered the Home Information Pack (No.2) Regulations 2007 (S.I. 2007, No. 1667).

HOUSING ACT 2004 (COMMENCEMENT NO. 8) (ENGLAND AND WALES) ORDER 2007

Motion made, and Question put,
That the Committee has considered the Housing Act 2004 (Commencement No. 8) (England and Wales) Order 2007 (S.I. 2007, No. 1668).—[Grant Shapps.]
The Committee divided: Ayes 10, Noes 5.
Division No. 2 ]
AYES
Byers, rh Mr. Stephen
Cawsey, Mr. Ian
Hesford, Stephen
Holmes, Paul
Jones, Mr. Kevan
Smith, Ms Angela C. (Sheffield, Hillsborough)
Spellar, rh Mr. John
Stunell, Andrew
Watts, Mr. Dave
Wright, Mr. Iain
NOES
Hurd, Mr. Nick
Scott, Mr. Lee
Shapps, Grant
Stuart, Mr. Graham
Walker, Mr. Charles
Question accordingly agreed to.

HOUSING ACT 2004 (COMMENCEMENT NO. 9) (ENGLAND AND WALES) ORDER 2007

Motion made, and Question put,
That the Committee has considered the Housing Act 2004 (Commencement No. 9) (England and Wales) Order 2007 (S.I. 2007, No. 2471).—[Grant Shapps.]
The Committee divided: Ayes 10, Noes 5.
Division No. 3 ]
AYES
Byers, rh Mr. Stephen
Cawsey, Mr. Ian
Hesford, Stephen
Holmes, Paul
Jones, Mr. Kevan
Smith, Ms Angela C. (Sheffield, Hillsborough)
Spellar, rh Mr. John
Stunell, Andrew
Watts, Mr. Dave
Wright, Mr. Iain
NOES
Hurd, Mr. Nick
Scott, Mr. Lee
Shapps, Grant
Stuart, Mr. Graham
Walker, Mr. Charles
Question accordingly agreed to.
Committee rose at twenty-four minutes past Three o’clock.
 
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