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a useless but very expensive waste of time?
Yvette Cooper: Certainly, Which? wanted us to go further and to introduce a home condition report. We agree with Which? that the home condition report could be valuable and could have a big impact on the housing market. It was not practical to introduce home condition reports this summer, but we are continuing trials so that we can support their roll-out as they are valuable. Members need to recognise that energy performance certificates are valuable. They do not exist at the moment, and it is right to include them in estate agents particulars. The energy ratings on homes should be displayed in estate agents windows, just as the energy ratings of white goods are displayed in Comet.
Robert Neill: So why does the Better Regulation Commission point out that the EU directive on which the Minister has relied refers only to the need for a certificate at the point of sale or letting rather than marketing, and that the Government have produced no evidence to justify going beyond the requirements of the directive, adding costs to the housing market? Why do the Government seem to know better than the Better Regulation Commission?
Yvette Cooper: The Better Regulation Commission wants to water down energy performance certificates. It takes the view that less information should be provided. The information should be provided, however, as part of estate agents particulars. Just as it is provided for people who browse around fridge shops, it should be provided for people browsing around estate agents. People ought to have such important information at a time when it will make a difference to them.
Dr. Andrew Murrison (Westbury) (Con): Can the Minister not understand the big difference between a fridge and some of the ancient housing stock that characterises constituencies such as mine? Such homes do not have cavity wall insulation. What will she say to my constituents who simply do not understand how the tick-box EPCs will help them?
The hon. Gentleman is right: there is a big difference between a fridge and a house. Homes are responsible for 27 per cent. of our carbon emissions. They are the biggest investment that most of us will make in our lives; their running costs are considerably higher than those of fridges; and if the information is provided for a fridge, it ought to be
provided for a home. The issue is a basic one of giving proper information that will help consumers to take decisions to improve the energy efficiency of their homes, and help them cut carbon emissions and their fuel bills.
According to the Energy Saving Trust, homeowners could save up to £300 on their fuel bills every year if they act on basic recommendations about their homes. Many will also be able to get grants of £100 to £300 from their new energy supplier, linked to the measures in the energy performance certificate. Some will be able to get much larger grants through other programmes. Companies are now developing green loans and mortgages to be linked to EPCs. The measures in the EPCs could help to cut carbon emissions by nearly 1 million tonnes a year. That is why WWF, Friends of the Earth, the Campaign to Protect Rural England and a series of different organisations are supporting those measures.
The remaining elements of HIPs are the legal and search documents that one already needs when buying and selling a home, but they will be gathered at the beginning rather than the end of the process, to speed things up and improve competition. For many of us, buying and selling a home is a baffling process. There can be huge delays between offer and exchange. In complex chains, that can mean that sales fall through. Most people will struggle to keep track of what services they are getting and paying for. HIPs will make the process much clearer and faster. In many other industries, competition, new technology and rising customer expectations have lowered prices, increased transparency and speeded up transactions. Importantly, however, that has not happened to the process of buying and selling a home. In fact, the move from offer to exchange takes longer even than 10 years ago, and in many areas where house prices have doubled, for example, so have estate agents fees.
Paul Farrelly: I accept that HIPs might bring some extra upfront costs, particularly with regard to producing the energy performance certificate, but that might lead to savings and people might think it a price worth paying, given our commitments on climate change. Does my hon. Friend agree, however, that the rest of the packs will result in savings through the elimination of duplication? Those savings will be shared with sellers, because most sellers are buyers, too. That point is ably made today in The Guardian, by my former colleague, Julia Finch, who presents a much more balanced opinion than the Johnny-come-later from Surrey, the hon. Member for Surrey Heath (Michael Gove), who used to pontificateand still doesfor The Times.
My hon. Friend is right to say that there will be savings throughout the process. He also refers to upfront costs, and many providers are already saying that they would charge at the end of the process, not at the beginning, and that they would offer no-sale, no-fee deals. A couple have said that they would provide HIPs for free. As he is right to point out, most of us buy and sell a home at the same time, so the transfer of costs from the buyer to the seller will not make any odds to us. The people who will really gain will be first-time buyers. Currently, if a sale falls
through, they might have to pay for searches on a series of different properties. In future, they will get that information for free. It is right that we should help first-time buyers in that way.
Anne Main: On costs and savings for sellers and buyers, does the Minister agree that the cost for sellers of part-equity in a house is disproportionate? According to the HIP providers to whom I have spoken, sellers will have to pay 100 per cent. of the HIPs cost even though they are perhaps selling only 50 per cent. of the equity in a house.
Yvette Cooper: People buying or selling shared equity properties already have to pay transaction costs, estate agents fees and search fees. All that we are doing is transferring the cost from the buyer to the seller in a way that introduces greater transparency and competition. That competition is already having an impact in bringing costs down. We have seen the cost of searches come down in a series of local authorities 25 local authorities have cut their costs in anticipation of HIPs because they know that, for the first time, the charges and the length of time taken will be transparent to the consumer and to HIP providers. There will be much greater pressure to provide a good service.
Mr. Redwood: Does the Minister not see that if HIPs are so wonderfulif they lead to people making savings on their energy account and speed up transactionsthey will take off naturally, given all this publicity? Why do we not withdraw the mandatory element, and see whether she is right to say that they are helpful? I think that they are unhelpfulthe market will dry up, and they are another tax to go with the swingeing stamp duty and the penal council tax.
Yvette Cooper: The right hon. Gentleman must recognise that the home buying and selling process has not changed properly for a generation. It has not reformed in response to new technology or responded effectively to competition. The Office of Fair Trading, for example, pointed out areas in which price competition was not effective. There is such a lack of transparency and so much complexity that it can be difficult for consumers to be clear about what they are paying for at which stage in the process. HIPs introduce greater transparency and new providers into the market, which is why many current providers are feeling a little anxious and threatened. We take that competition seriously. We want to monitor it and ensure that it is promoted and that it increases, and that consumers see the benefits. I will now take an intervention from the hon. Member for South Holland and The Deepings (Mr. Hayes) and then I want to make progress.
Mr. Hayes: When the hon. Lady debated these matters with us alongside the then Minister for Housing and Planning, the right hon. Member for Streatham (Keith Hill), the plan was altogether more ambitious. Now she tells us that home buyers will not receive information on a number of salient issues. Does she not recognise that people will want to know about flood risk, a history of land contamination, electrical safety and risk of subsidence? There will no reduction in the number of extra surveys that people commission when they buy their homes, because mortgage companies will insist on them. Will the hon. Lady acknowledge that the packs will not improve the lot of buyers, but will clog up the system and will be entirely unhelpful to those who want to purchase homes?
Yvette Cooper: Opposition Members keep contradicting themselves. One minute they want bigger HIPs; the next minute they want no HIPs at all. [Laughter.] Perhaps some Opposition Members are seeking bigger HIPs.
We have always said that we think home condition reports will be very valuable. We have also said that we do not think it practicable to introduce them on a mandatory basis this summer, but because we think that they will be valuable we are conducting trials. We have made amendments to HIPs in response to consultation and the results of trials, and we will continue to work on their implementation with stakeholders across the industry.
Mr. David Drew (Stroud) (Lab/Co-op): I must declare an interest. I have just sold my fathers house, because he has gone into care. He has the good fortune to live in the Bristol area, where a pilot scheme has operated for some time, and I was offered the opportunity to use a home information pack. The process was very transparent, and led to the early sale of my fathers house. I do not understand why the experiment is not more widely known about, and why the advantages that the estate agent made so clear to me have not been translated to the rest of the profession. I think that it is very sad. Can my hon. Friend elucidate?
Yvette Cooper: My hon. Friend is right. Advocates of the home information packs that are currently in the market have not often been heard. Their voices have been drowned out by those of a number of organisations representing people in the industry who are anxious about and resistant to change, which is unfortunate. Another hon. Member gave me an e-mail that he was sent by one of his constituents, who has been an estate agent for many years. He wrote that, having spoken to virtually every solicitor and estate agent in Reading and Wokingham, he found they were all ready to proceed with gusto. I believe that many people in the industry expect considerable benefits.
It is true that there has been opposition from some representative bodiesthe hon. Member for Surrey Heath quoted a fewand that the Royal Institution of Chartered Surveyors is launching a judicial review. However, we consider the review to be completely groundless, and in any event it concerns energy performance certificates: the institution thinks that the information in them should be provided when it
is up to 10 years old. We disagree. The Council of Mortgage Lenders published a detailed report this week containing its assessment of the future of the housing market. So concerned is the council about the impact of HIPs that it does not even mention them. It is also true that other organisations, such as Which?, want to go further, but we think that these are the right measures to introduce this summer.
Opposition Members have had an opportunity to choose between backing the National Association of Estate Agents and backing Friends of the Earth. They have chosen, and we have seen which side they are really on.
Energy performance certificates are central to home information packs. We have stressed the importance of energy assessors because we take it very seriously. According to the latest estimates, 2,000 energy assessors will be needed at the beginning of June, rising to 2,500 by the end of the month. More than 2,200 have passed their examinations, and over 3,000 more are in training. Of those, around 1,100 are accredited or their accreditation is currently being processed.
Angela Watkinson (Upminster) (Con): As the Minister may know, the Daily Mail website claims today that the only reason we have been granted the debate is that the Minister threatened to resign over HIPs. Would she care to comment?
Yvette Cooper: I would caution the hon. Lady over what she should believe in the Daily Mail. I did not read the Daily Mail today, but I can assure her that that report is not correct. However, I will go and check. Heaven forbid that I forgot to read the Daily Mail this morning!
Jessica Morden (Newport, East) (Lab): I welcome the Ministers comments. Will she ensure that the many people, including constituents of mine, who answered the Governments call for people to train to become self-employed home inspectors and domestic energy assessorsat great expense to themselves, in some casesare not driven out of the market by the dominance of a small number of large HIP providers who are working with estate agents on larger contracts?
Yvette Cooper: We think that competition is very important. Part of the intention behind the reforms is to improve information and transparency and support competition. I assure my hon. Friend that we will closely monitor competition in the market, and think about whether further steps are necessary.
As for the impact on the housing market, of course it is true that some estate agents have been using the advent of HIPs as a marketing strategy to try to drum up business and increase their share in a tight housing market in May. It would not be surprising if that had an impact on the timing of listings in both May and June, and it may take time for people to get used to the new system. However, listings fluctuate substantially from month to month. A million houses are sold every year, at an average cost of £200,000. Estate agents fees alone can amount to an average of between £2,000 and £4,000. We do not think it plausible that people will decide not to move house because of an energy performance certificate. That is an absurd assertion by Opposition Members who simply want to cause alarm and convey misinformation that scares people.
Paul Farrelly: We have not only seen such misinformation in the pressas my hon. Friend says, it has been used as a marketing ploy by some of the more unscrupulous agentsbut heard it from Opposition Members. The cries that we hear about the housing market drying up are absurd. That is not constructive opposition; it is merely hysterical opportunism.
Yvette Cooper: My hon. Friend makes an important point. We must look for the real dividing lines in the argument. The central element is the energy performance certificate, which includes additional measures to help improve the way in which the housing market operates.
The Opposition seek to overturn the HIP regulations, and they seek to stop the introduction of HIPs and energy performance certificates this summer. They say that they support EPCs and measures to improve the energy efficiency of peoples homes, but if that is the case, why did the hon. Members for Surrey Heath and for Meriden (Mrs. Spelman) and the right hon. Member for Witney (Mr. Cameron) sign early-day motion 1264, which calls for the overturning of the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007? Those regulations do not contain measures relating to HIPs, searches or title documents. The only measure that concerns home owners relates to energy performance certificates. The hon. Member for Surrey Heath said that he needed to table the early-day motion to secure the debate. What nonsense! The debate is not about those regulations; it is about the HIP regulations.
Michael Gove: The hon. Lady has been in the House for 10 years. She will be familiar with the workings of the Table Office. We prayed against the Home Information Pack Regulations 2007, which meant that both sets of regulations had to be prayed against. We simply followed the advice of the Table Office to ensure that this debate took place on the Floor of the House.
The hon. Lady knows from our speeches, statements and letters that we are in favour of energy performance certificates. Will she now withdraw the entirely erroneous and misleading assertion that we are opposed to them, or is she prepared to see her credibility diminish as a consequence?
Yvette Cooper: What utter nonsense. The hon. Gentleman asks for evidence of his opposition to energy performance certificates, and I must tell him that there is plenty of it. The hon. Member for Meriden rose early this morningeven earlier than I didto make clear her hostility to energy performance certificates on GMTV. She objects to them because she does not like the fact that someone will have to carry out energy ratings of peoples homes. She said
the new feature is having energy performance assessors come round and actually look at how your house is put together... so its a very intrusive measure.
Perhaps the hon. Lady will explain how she can support energy ratings of homes if she opposes the idea of people going round to those homes to carry them out. How does she think that energy ratings on homes will be done? That provides more evidence of Conservative Members opposing energy performance certificates.
The hon. Member for Surrey Heath takes a different line. His objection is that we are gold-plating EU regulations. That is true; we are going beyond the minimum requirements for energy performance certificates set out in the EU directive. However, that is not gold-plating; it is green-plating, and we make no apology for that. The European minimum that the hon. Gentleman advocates is that people should be able to use an energy performance certificate if it is up to 10 years old. Well, it is a fat lot of use to a new home buyer to have information on a homes fuel costs and running costs that could be up to eight or nine years old. There will not be a huge impact in respect of how people respond to energy performance certificates if they know that the energy information in them is out of date.
The fact is that Opposition Members are trying to block energy performance certificates; they are trying to delay them and to water down the information. They are also telling different things to different audiences. On 1 May, the hon. Member for Surrey Heath told the Daily Express:
If we can stop them we will.
we shall not use our vote to impede prompt and effective EPC implementation.
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