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The cost of an HIP, which can be deferred until the property sale is completed, represents a tiny fraction of the cost of moving home. A very good friend of mine has just experienced three abortive sales because his property was outside the scope of HIPs when he put it on the market. The simple fact was that in the 25 years he had owned the property lawyers standards of due diligence had risen, and more and more queries were being raised about matters that used to be taken for granted. He has ended up with a problem resulting from a document that may not have been as strong legally as it should have been, but the sale of the property was delayed simply because of the way markets work. Had the HIP been in place and had he
been required to arrange a survey in advance, he would have confronted the problem before the property went on the market.
The simple reality is that the RICS and the Law Society want to protect the financial interests of their members. They want to keep conveyancing costs high and to exclude any other type of professional from inspecting properties. Their thinly veiled attempts to protect their own members luxurious lifestyles ought to be resisted. We must proceed to a full roll-out of HIPs as soon as possible. Those who will gain most will be first-time buyers: they will begin to benefit, and we shall then be able to get down to the important business of improving energy efficiency.
The housing market varies tremendously up and down the country. The hon. Member for Poole (Mr. Syms) mentioned flats over shops. In my constituency, excellent work by the Methodist Homes Housing Association in partnership with the local authority and shop owners has produced solutions, but such interventions make very small contributions to the market. There are many such small interventions, and I agree with the hon. Gentleman that we should give incentives to housing associations and local authorities.
My hon. Friend the Under-Secretary should maximise the flexibility that he gives local authorities to develop schemes that suit the needs of their communities, each of which has a slightly different pattern. There cannot be a one-size-fits-all solution. What applies to the constituency of my right hon. Friend the Member for Greenwich and Woolwich will certainly not apply to my constituency in Ellesmere Port, although the two constituencies contain a proportionately similar number of people at the disadvantaged end of the spectrum. Our housing markets are quite different.
I ask for flexibility and an early roll-out. We should be confident. I agree with the hon. Member for Chesterfield that we should monitor the situation and that there should be transparency, but we should also stop listening to the weasel words of those Opposition Members who are simply singing the song of vested interest, and instead get on and do the job.
Mr. Charles Walker (Broxbourne) (Con): We have just returned after an extremely long summer recess, but when those of us who have been Members for at least two and a half yearsand have therefore been involved in the whole home information pack fiascosit through debates such as this one, we realise that the summer recess is in fact not long enough. It should instead be about 11 months long, because when Members are away from the House they do not come up with hare-brained schemes such as the home information pack, which is just yet another tax on home owners.
This Government clearly do not have a great love for home owners, because on top of massive increases in stamp duties over the past 10 years and the recent Northern Rock fiascowhich has led to interest rate rises for home ownersthey want to bring in yet another cost in the form of home information packs. It is all very well for the Minister, who clearly does not
believe in them any more either, to say that a HIP will cost only £350 or £400that it amounts to merely a marginal increase in the cost of buying a housebut £350 or £400 is a lot of money for many people. I have not met anyone in my constituency or anywhere else who has said, Actually, I think home information packs are a very good idea.
In his speech, the hon. Member for Ellesmere Port and Neston (Andrew Miller) expressed faux compassion for LMS, one of the largest HIP providers. It is clear that LMS wrote his speech for himand it is also clear that it managed to get it to him only a couple of hours ago, because it was not well rehearsed.
The situation is bizarre: our country has a good housing market that works fairly wellin fact, it is one of the best-working housing marketsbut this Government have decided in their wisdom to gum it up. Of course, major transactions such as buying or selling a house do not always proceed as smoothly as one would like. They can come undone; people can pull out of a sale or purchase, or raise or drop the price. That is the nature of the market; and I wish this Government truly understood the market, because then they would not spend so much time interfering in its workings and making things all the more difficult for the many hundreds of thousands, if not millions, of people who want to buy homes each year.
Mr. Geoffrey Clifton-Brown (Cotswold) (Con): I apologise for not having been present for the entire debate. During the recess, I bought a house and sold a house, and my sale took longer as a result of the pack because the searches are limited and the purchasers solicitor insisted on doing his own full searches, which he had relied on in the past. I also think that the energy performance certificates are suspect and cannot be relied upon; I thought my house was extremely well insulatedit is double glazed throughout and the roof and tank are insulatedyet it got a relatively low score.
Mr. Walker: My hon. Friend makes an excellent point. If I wish to buy a house in the future, I will not take the word of someone acting on behalf of the vendor. I will want to have a good look at the house for myself. Therefore, I will still pay my solicitor to do my searches. It is a little like buying a car. When we buy a car, the seller says, Ive got the service history, but we reply, Thats very useful, but Im still going to get the guy from the AA to come along and have a look under the hood.
Many of the people I talk to about this measure are concerned that it is just yet another excuse to have more people working in a quasi-governmental role snooping round their homes. They say, There will be yet more people Ive got to have in my home looking behind the curtains, looking under the bed, telling me what I should be doing. There is not a huge appetite for that.
Again, we can ask: what will happen to the information once it has been secured? Will the Government take ownership of it and use it at a later date to raise our council tax bands, or use it as an excuse to increase stamp duty? We do not know with this Government, because any excuse is always grabbed to put up the cost of things such as buying homes or to increase taxes. That is the way this Government work.
If this Government were an honest Government, they would have had an election last weekbut setting that aside, they would also realise that this measure has been an unmitigated disaster. It is so boring to come to the Chamber and hear former Ministers justify what they did before they were removed from office. The right hon. Member for Greenwich and Woolwich (Mr. Raynsford) gave a lengthy exposition of why the HIPs idea was so reasonable and good, but it is neither. Seven years have passed since he introduced it, but the faces of the few Labour Members still attending the debate make it clear that they know in their hearts that it is a disaster. Why do they not have the courage to say, Look, we got it wrong. Lets get rid of this nonsense. Were very sorry weve wasted so many peoples time, and that weve conned those poor men and women into giving up their jobs and spending £4,500 on training to become inspectors.
Opposition Members are nothing but fair. We recognise that those people must be compensated, even though taxpayers money would have to be used. We hate to see people disadvantagedunlike the lot over there, who are quite happy to see millions of home owners every year disadvantaged by yet another tax. That is pretty thin gruel. Whenever the Prime Minister calls a general election, I think that people will let him know as much.
Mr. Clive Betts (Sheffield, Attercliffe) (Lab): I do not usually start a speech by agreeing with the Liberal Democrats, but the hon. Member for Chesterfield (Paul Holmes) made a very succinct and accurate analysis of Conservative proposals to reduce stamp duty. I also agree with him that it would be better if we could eventually move to a graduated stamp duty, instead of the stepped approach that we have at present, as that causes particular problems. The hon. Gentleman also offered a balanced and fair analysis of where we have got to with HIPs. He gave general support for what the Government are trying to achieve, but set out some criticism of the approach that has been adopted. I might disagree with the hon. Gentleman about other matters to do with general housing policy, but I accept what he said on those points.
I first began to consider HIPs when the Select Committee covering the work of the former Office of the Deputy Prime Minister held an inquiry into the draft Housing Bill in the previous Parliament. We had lots of questions about the impact that HIPs would have on the market, especially in respect of low-value homes, and we were also concerned about the process and the costs that would be involved. Like me, the hon. Member for Poole (Mr. Syms) was a member of the Standing Committee considering the Bill, and he has already described the further discussions that took place. A lot of analysis was done, but I am not sure that sufficient account was taken of all the concerns expressed about the process that needed to be gone through before HIPs were introduced.
I shall say a little more about that in a minute, but I was eventually persuaded that something needed to be done when I examined the system that we have now. Does anyone here really mean to suggest that the current process for buying and selling homes in this country is
perfect, ideal, satisfactory and incapable of reform? The hon. Member for Broxbourne (Mr. Walker), who has just spoken, seemed to come close to doing so. The trouble is that the Opposition oppose the introduction of HIPs but, as far as I can see, do not have any policy to improve and reform the process of buying and selling homes.
The Opposition appear to be satisfied with the current arrangements, but anyone who has gone through the process of buying and selling a home will describe all the flaws and frustrations in the system. Lots of elements in the process do not work, and I am not talking about the frustrations caused by lumping furniture around during the removals stage. It is the process of buying and selling that makes people so frustrated that they say, Well never do this again!
A few minutes ago, the hon. Member for Broxbourne almost got as far as describing the fundamental flaw in the process, which is that people making the most important purchase in their lives make an offer on a property without all the essential knowledge that they need. They do not know the propertys true condition, or its energy performance. They do not always know whether the people selling the property actually own it, yet still they make an offer.
Mr. Betts: Of course, that is exactly right, but would it not be an awful lot better to make an offer once the survey had been done? Only three out of four offers made go through to conclusion, which means that one in four is dropped. Those prospective purchasers who, once the relevant information is made available, decide to withdraw their offer and not complete, discover that they have wasted the money that they have already spent. The process is nonsense. The hon. Gentleman is absolutely right: he would not make an offer on a car without getting it tested by a qualified person. He would not hand over £10,000 for a car until a survey had been carried out. That shows what nonsense the process of buying and selling property is and why we need reform.
I have a criticism of the Government. I agree with my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) that it is a great shame that they dropped the home condition reports from HIPs and made them voluntary. The reports will not work on that basis and will eventually have to become a proper part of HIPs, so that everyone produces a home condition report before they put a property on the market. People will then be able to see what they are buying.
Members say that they would not trust a survey or search commissioned by someone else. We explored that issue in detail in the Housing Bill Committee. We asked what would happen if a survey was found to be faulty and the condition of the property was not as described. Would a third partythe buyer who had not commissioned the surveyhave the right to sue the surveyor if the job had not been done properly? The answer is yes; they would have that right. It is clearly on the record in Hansard.
I am content with that position. If people can sue the surveyor for doing his or her job improperly there is no problem in trusting a survey commissioned by the seller. If the buyer goes through with the purchase and the survey is found to be faulty, they will have a right in law to take action. That is a satisfactory position.
I accept that the implementation of HIPs has been far from perfect. As I have already said, it was not the happiest episode in the Governments life. The process was too slow, the direction was not clear and we should have had pilots. We have not got it right in a number of respects.
Mr. Clifton-Brown: The hon. Gentleman always follows these debates with great care, so will he take on board my practical example of what happened to me when I tried to sell a house? The standard survey included in the pack was not trusted by the purchasers solicitors. The same thing would apply to surveys and everything else. In this country, we have the principle of caveat emptorthe buyer must satisfy himself as to the information he is given. If he is not given sufficient information he will have to do the whole thing all over again.
Mr. Betts: I think the hon. Gentleman is referring not to surveys but to searches and my right hon. Friend the Minister dealt with that point. As HIPs come into effect and are more common and people understand them, the problem of buyers wanting second searches or second surveys will not arise. People will come to accept HIPs as a legitimate part of the process.
There have been temporary hiccups in the introduction of the new scheme, but they are minor compared with what the Conservatives told us would happen. They said there would be Armageddon in the housing market; the market would collapse, no one would put their house up for sale and if they did it would take weeks to get the packs produced. No energy surveyors would be available and delays would result from the shortage. The cost would be £1,000 a time. That is what we were told over and over again, but what actually happened?
My right hon. Friend the Member for Greenwich and Woolwich demolished the argument that houses would not come on to the market because of the introduction of HIPs. There is no evidence for that. The cost is not £1,000 but between £300 and £350 on average, including the energy performance certificates, which were not part of the original process. I hope that most people welcome the fact that we have those certificates even if they cannot agree that they should be part of the HIP process.
There have not been long delays. There are plenty of energy surveyors able to do the work. All the disasters we were told would befall us when HIPs were introduced have not happened. There is not a shred of evidence.
I have not had a single complaint from a constituent buying a house or from an estate agent since HIPs were introduced. I guess that is the case for most Members. We have had no complaints because the process was introduced far more smoothly than even I as a supporter of HIPs believed possible. That is the real situation.
The hon. Member for Poole made a reasonable speech. He talked about energy performance certificates. It is right that they should be part of HIPs. We have at least introduced them, and an increasing number of houses will get them as buying and selling with HIPs proceeds. However, I agree with him that we have to consider what more we can do to roll out energy performance certificates for houses that probably will not come on to the market for a number of years. The Communities and Local Government Committee will hold an inquiry on energy conservation for existing homes; that is one of the issues that we want to take up. It was a reasonable point, and the Government ought to think about it.
I agree with the hon. Gentleman that HIPs will not operate properly if they are used for only some houses. My solution is to get one and two-bedroom properties into the HIP process as quickly as possible, not to scrap the process for properties with three or more bedrooms. However, he made a reasonable point, and the Government have to think about how quickly we can introduce the process, so that we can get more sense into the market. Of course, introducing HIPs for one and two-bedroom properties is most likely to help first-time buyers, who tend to buy such properties, as there will be a transfer of cost from the people buying properties to people selling. So first-time buyers will benefit far more once smaller properties are brought into the system. My question for the Government is: how quickly can we get that done? We need it done as quickly as possible.
Finally, I come back to home condition reports. I still believe that one of the fundamental problems with buying and selling a home in this country is that people not only make offers without knowing the condition of a property, but often buy it with only a minimal survey having been done. Such a survey will not reveal potential fundamental flaws with the property. [Interruption.] Okay, we can all shout out, buyer beware, but I believe that the Government have a responsibility to try to make sure that there are safeguards for people undertaking the most important purchase of their life. That is a different approach; Opposition Members are happy to leave it to the market, but I believe that we Members have a responsibility to our constituents in that process. We have a responsibility to bring in appropriate safeguards. Integrating home condition reports in the HIP process would achieve that, and I hope that the Government will eventually come to that point of view.
Mr. Ian Liddell-Grainger (Bridgwater) (Con): I am staggered by some of the speeches that we have heard from Labour Members, and I am perturbed by the lack of a sense of reality that is coming through loud and clear. I want to put on record the situation in Bristol, which the Government have talked about.
There were 15,000 voluntary packs
only 250 of which had a home condition element.[ Official Report, House of Lords, 11 October 2006; Vol. 685, c. 336.]
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