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“being rated lower than is actually the case. Further information can be obtained from the Agents and detailed literature is included within the Home Information Pack appertaining to this property.”
In other words, through his persistence, Mr. Dyke managed to get NHER to admit in writing that there is a defect in the process.
The point that I want to make strongly to the Under-Secretary is that what applies to Mr. Dyke’s property surely must apply to thousands of other older homes throughout the country. The lady with the solar panels that were not noticed asked whether I could bring the matter to the attention of the relevant authorities, because trading standards should have an interest in it. That is a pertinent point. If the Government are forcing people to pay money not only for a flawed process but for the unsatisfactory standards applied by those who undertake it, and those people consequently suffer material loss, I hope that every trading standards department in the country will take an interest.
The Under-Secretary may wish to consult NHER on this matter, because if it has put such a statement in writing for one property, that must apply to others. I would like a written response from the Under-Secretary about how he evaluates that damning report that my constituent managed to get.
I tabled written questions on this subject, and I was horrified by, for example, the fact that—unless the Under-Secretary tells me differently—the Government have no plan for people who have paid for the energy performance certificate to receive a copy, so that they can identify the problems early. Why can they not be given a copy if they have paid for one?
I have other questions, which I shall not go into because of the lack of time, but I am sure that the Minister’s Department has done its homework and identified the fact that I tabled some written questions earlier in the year. The Department seems to have put the scheme in place long before it had worked through the models that would work, and before it had a system in place that would work for all properties. That is a shambles. Those reports—independent reports, from professionals and consumers—deserve the Department’s attention. I hope that the Minister will tell me that the Government were hasty and ill-prepared, that they got this wrong, and that they are now going to do something about it.
7.55 pm
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr. Iain Wright): I congratulate the hon. Member for Tiverton and Honiton (Angela Browning) on securing this debate. I know that she takes a close interest in home information packs and energy performance certificates. She has mentioned her contributions to debates in the House on the subject, and I have seen recent written parliamentary questions to my right hon. Friend the Minister for Housing that demonstrate her commitment to her constituency.
I am grateful to the hon. Lady for giving me the opportunity to deal with her concerns tonight. I understand from her contribution that she is concerned with three broad aspects of HIPs and EPCs: the value of HIPs and the policy framework; buyers not being interested in HIPs; and—the key part of her contribution—poor quality HIPs, HIP providers and EPCs. Let me take each of those in turn.
On the value of HIPs, I am not convinced—in fact, quite the reverse—that the current house buying and selling process has so far provided clear, transparent information for people who are undertaking probably their biggest financial transaction. It is not right, for example, that people in this country have to wait the longest time in Europe to buy or sell a house. The introduction of HIPs has helped to start to address those problems.
Hon. Members in all parts of the House recognise that the EPC can play a vital role in helping us to achieve our carbon emissions objectives, as well as helping consumers to save money on their fuel bills, which is something to which I shall return later in my contribution. It is vital that the EPC provides information of genuine value and is appropriate to the property being reported on. It is equally important that the people who produce the report are competent. Again, I shall come to that in a moment.
I am sure that the hon. Lady will agree, however, that we are seeing value in HIPs. On average, there have been savings of around £30 on property search costs, which in some areas have fallen by £120 since the introduction of HIPs. Important information on energy efficiency is now being delivered to consumers as part of HIPs.
More than 750,000 HIPs have now been produced, with EPCs providing information to sellers and prospective buyers alike on measures to improve the energy efficiency of their homes. According to the Energy Saving Trust, consumers can save on average £300 a year on their fuel bills if owners follow the improvements recommended by the EPC. Throughout the country, that could produce £100 million of savings on energy bills.
Angela Browning: But surely the report by the consortium of Leeds lawyers shows that the issue is not about reducing conveyancing costs, but about whether people feel that the HIP is a reliable substitute for the normal paperwork that would be involved in conveyancing a property. The fact of the matter is that it is not. If we are talking about a modern property that is still under an NHER 10-year guarantee, one can understand people not bothering too much about the HIP, which means that such transactions are therefore pretty straightforward. However, for all those pre-1960 properties, some of which will be hundreds of years old, the conveyancing is quite complex. If the lawyers are telling the Minister that people are not relying on HIPs, he should really take notice of that.
Mr. Wright: I will come on to that point, but let me turn to the second point that the hon. Lady made, which she touched on in her intervention, too, about buyers simply not being interested in HIPs. I disagree with her quite fundamentally about that. When consumers see HIPs, they see their benefits and they see real cost savings that help to improve the decision-making process for them. However, I think that there is a problem at the moment with estate agents not showing HIPs. We need to do more to encourage estate agents and others to show HIPs to home buyers and sellers, as well as encouraging consumers to ask for them when they are interested in a particular property. All the indications are that HIPs improve the home buying and selling process. Having said that, I take the hon. Lady’s point that home buyers are not being shown the HIP at present.
My officials are currently drafting correspondence to estate agent bodies, saying they should be more proactive in making buyers aware of the HIP and the EPC as early as possible. The correspondence will remind them of their statutory duties with regard to the timely provision of an HIP and an EPC. It will also point out that agents who fail to make an EPC available risk making the owner of the property liable to pay a financial penalty imposed by the local trading standards officer.
Mr. Wright: I will give way again, but I am keen to get to the meat of my contribution.
Angela Browning: I would like the Minister to comment on the fact that some people are having to pay to receive a copy of the HIP when they want to buy a property.
Mr. Wright: I will certainly look into the point that the hon. Lady raises. We are keen to make it as quick as possible for home buyers and sellers to access the relevant information, and one of the ways of doing that is through online and e-conveyancing. I suggest that, if an estate agent is charging a fee for a hard copy, there is nothing to stop buyers printing a copy at home, if they so choose and if that option is available to them. The whole point is to try to rationalise the costs as much as possible.
I want to move on to the central point of the hon. Lady’s contribution, namely, the poor quality of HIPs and HIP providers. Given the policy objectives for HIPs—a greater degree of transparency in the home buying and selling process, more appropriate and up-front information, and higher levels of confidence—it is
important for consumers to have clear routes to complain and obtain redress when standards have not been as high as they should have been.
Most HIP providers subscribe to the HIP code. The HIP code provides protection for home buyers, sellers, estate agents, conveyancers and mortgage lenders who rely on the information included in a HIP provided on residential property in England and Wales. It sets out minimum standards which HIP providers have to meet. As part of the code, there is a formal written complaints procedure for handling complaints in a fair and prompt manner. The complaints procedure promises that complaints will be acknowledged within five working days of receipt, and normally dealt with fully within four weeks. If the consumer remains unsatisfied, they have the right to refer the complaint to the independent property codes adjudication scheme. The HIP code states that all providers who subscribe will fully co-operate fully with the independent adjudicator and comply with any decision reached.
In addition, all HIPs and their providers who comply with the code will display the HIP code logo prominently on their literature and on the HIP itself. It is also possible for consumers to check whether a specific HIP provider subscribes to the code by contacting the Property Codes Compliance Board. In this way, reassurance should be provided to home buyers and sellers regarding the quality of the product that they are using and the professionalism of the firm that is providing it.
Let me move on to the key point. Now that HIPs and EPCs have been up and running for 12 months, we can look at certain difficulties that we have encountered, particularly in relation to non-standard buildings. As the hon. Lady suggested, buildings in this country span a period from the middle ages to the modern day. Given the wide range of ages, spanning perhaps 700 years, it is perhaps understandable that we have had some degree of difficulty in regard to the operation of EPCs and HIPs.
The software used to produce the EPC is called the reduced data standard assessment procedure—RDSAP—and it takes account of a wide range of features in a property, including its age and dimensions, the material used to construct it and whether there is cavity wall insulation, double glazing and so on. To keep the costs reasonable, the software has been developed to be simple enough to achieve consistency and to avoid requiring energy assessors to spend an unnecessarily long time on site. Since August 2007, something like 860,000 EPCs have been produced using this software, and the accuracy of the vast majority of these has achieved the agreed professional level.
I am sure the hon. Lady would acknowledge that a balance must be struck between the time spent assessing a building, the associated costs of producing the HIP and the EPC, and ensuring that all appropriate features should be taken into account. As she mentioned, at present the software cannot take into account every possible feature in the insulation, the heating system controls and so on that a homeowner may have provided, and to input that at the start would have caused immense costs, making HIPs and EPCs uneconomic and counter-productive.
It is also important to point out that an EPC is designed to be a description of the energy performance of the building rather than a description of the building per se. Nevertheless, we recognise that in a small number of cases, the RDSAP may not reflect the full complexity of a property. We will therefore update the software in September to allow additional data input where it is considered appropriate by the energy assessor.
The hon. Lady will recall that on 14 January, when my right hon. Friend the Member for Pontefract and Castleford (Yvette Cooper) was the Minister for Housing and Planning, she wrote to her and addressed Mr. Dyke’s specific point about cob construction. In that letter, she said:
“This issue has been recognised by my Department, and the software will be amended to include cob construction, although using the sandstone descriptor is not likely to impact the rating significantly.”
I hope that that reassures the hon. Lady. In addition, if an owner wants unusual features to be taken into account, a full SAP calculation can be undertaken, but I am sure that the hon. Lady would recognise that that would need much more time and a more highly qualified assessor, so it would be likely to come in at greater cost.
In conclusion, I hope that I have reassured the hon. Lady in respect of the three points she made. She mentioned that she is unhappy with the performance of HIPs and EPCs. In the light of current economic difficulties and particularly the drying up of mortgage finance, I would suggest that the last thing required in the housing market is needless tinkering. In the current climate, the industry and consumers want as much certainty of information as possible. As regards escalating fuel bills, for example, which were caused by a trebling of oil prices on the world markets, the importance of information about energy performance has never been so timely. In such a turbulent time as we are experiencing, I believe that HIPs and EPCs are an important and stable part of rationalising the home buying and selling process.
Adjourned accordingly at seven minutes past Eight o’clock.
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