Examination of Witnesses (Question 160-179)
RT HON
HAZEL BLEARS
MP, RT HON
YVETTE COOPER
MP AND JOHN
HEALEY MP
29 OCTOBER 2007
Q160 Chair: Just before we move on
to home information packs can I go into reverse? Mr Healey, when
you were answering Martin, I think, there was a question which
I do not want you to answer now (I would like it in writing afterwards
if possible) about specific examples of powers or areas which
might be devolved from the regional level to local authorities.
Perhaps you could undertake to drop us a note: that would be helpful.
John Healey: I certainly can.
Q161 Anne Main: Minister, we had
a very interesting conversation last week with the Permanent Secretary.
I believe £40 million has been spent trialling home information
packs, and apparently the data was going to be shared as to the
impact of them. Where is that data and when will it be shared
with us?
Yvette Cooper: We are still waiting
to find out the results of the trials. The process of the trials
obviously began in November of last year and the requirement we
set was that they needed to follow the entire chain all the way
through in order to find out what the impact was. What the trial
specifically looked at was home condition reports, which are not
a compulsory part of the pack at this stage, and they have been
looking therefore at the impact of the home condition report as
to whether or not it speeds up sales and all of that process.
In order to do that you do have to follow the transaction all
the way through and you also have to get information from buyers.
What is taking time as part of the trials is getting the information
from buyers. They have information from sellers; they do not have
information from buyers.
Q162 Anne Main: We have not got a
predicted date when we will get that information?
Yvette Cooper: It is an independent
evaluation. It is being done by Ipsos MORI and so once we have
that full completed report we will send a copy to the Committee.
We will publish the report.
Q163 Anne Main: In which case, given
that it is the home condition pack information that you are seeking,
last week the Permanent Secretary—and I quote his words—said
there were three tests. The first was about the total number of
the assessors, the second was about the regional split, and the
third, that I felt most interesting, was about the operation of
the home information packs and general conditions: "I think
that it is the third one that has held ministers back". When
I pressed him on this particular suggestion I said, logically,
then, if you are assessing the impact of the home information
packs on the housing market, if you believe that it is an adverse
effect, you would be thinking that possibly you would not continue
rolling out the home information packs. He felt that that was
something you were assessing. Are you assessing the impact on
the housing market? Given the market's volatility how will you
make that assessment, and if it is having a negative or zero impact
on the housing market does that mean you are considering not continuing
with HIPs?
Yvette Cooper: Our policy continues
to be what it has always been and we do think that the energy
performance certificates in particular have huge benefits right
across the housing market. That includes the one-bedroom and two-bedroom
properties. We also think that there are advantages in terms of
the searches that we have already seen because we have already
seen as a result of the HIPs programme cuts in the cost of searches
right across the country, including in my local authority, very
substantial cuts in the cost of searches as a result of the HIPs
programme. There are issues, however, about the timing of the
rollout that we do have to take very seriously. The Permanent
Secretary, I think, talked to you about the three conditions that
Ruth Kelly set out in the announcement back in May that we would
use in terms of determining the timing of the rollout. The first
of those was around the overall number of assessors. That condition
is now met. We have enough assessors across the country to deliver
all energy performance certificates.
Q164 Anne Main: In the right places?
Yvette Cooper: The second test
was around regions.
Q165 Anne Main: Excuse me—can
I just ask whether the assessment was in the right places?
Yvette Cooper: Yes. The second
test was around the regional spread to make sure that there were
enough energy assessors in place in each region. London has been
the one region that has lagged in terms of having enough energy
assessors in place to meet all of the requirements. We do now
believe that there are enough assessors, only just over the last
few weeks, in terms of the demand in London for the whole market
if you look right across the market. The third condition was around
looking at the experience of the implementation and the rollout
so far, and that is the one we are continuing to monitor at the
moment because it is right that we make sure the timing of the
rollout properly reflects the lessons from the rollout so far,
and the added factor that we are just looking at very carefully
and taking additional advice on at the moment is issues around
timing, given the additional uncertainty in the housing market
that there has been over the last few months. The housing market
is in a different position compared to the housing market back
in the spring in terms of—
Q166 Anne Main: I am sorry, Minister,
I find that somewhat—
Yvette Cooper: --- in terms of
the greater uncertainty around what has happened with Northern
Rock and the quietness of the market overall.
Q167 Anne Main: Given your confidence,
which you have just restated again, about the total benefit of
having home information packs, speeding up the market, all the
other things that are constantly said even now, what is it about
the housing market then that is going to change your mind? A dip
in prices?
Yvette Cooper: No. I think it
is right that we continue with what has in fact been a very smooth
rollout since the beginning of August to the four-bedroom and
three-bedroom properties, that in order to make sure that continues
we do monitor it properly and we do make sure that we look at
the wider overall position of the housing market before taking
decisions on the timing of rollouts. I think that is a responsible
thing for us to do.
Q168 Anne Main: I am sorry; I really
do not understand what you mean by "look at the wider overall
position of the housing market". Do you mean if the market
starts falling, for whatever other pressures, you will not be
rolling out HIPs? That is what Mr Housden seemed to suggest to
us last time.
Yvette Cooper: No. What it means
is that we are just monitoring very carefully the impact of the
rollout so far and the way it has taken place around four-bedroom
properties, around three-bedroom properties and the impact in
different regions. As I have said, the impact so far is that we
are obviously seeing very beneficial energy information in place.
We are also seeing drops in costs, particularly around searches,
and information being provided much more quickly than we had previously
done. We are also seeing transitional short-term impacts on the
listings and the timings of listings. Again, that is to be expected
but it is important that we monitor that through before we take
a final decision.
Mr Hands: The question was about—
Chair: Greg, would you please not interrupt?
Q169 Mr Hands: Okay, but the question
that I think Ms Main has been asking is about the general conditions
of the housing market. Peter Housden told us last week, and I
quote from what he said last week, "and the third was about
the operation of home information packs and general conditions.
I think it is the third one"—ie, general conditions—"that
has held ministers back" from rolling out the scheme. What
is it in the general conditions? Is it the price or is it supply
or is it something else in the operation of the market that was
holding it back?
Yvette Cooper: If you will see,
what he was referring to was the third condition as set out by
Ruth Kelly—
Q170 Mr Hands: The general conditions.
Yvette Cooper:— earlier
this year when she made her statement to Parliament. At that point
we did say that we would look at the overall implementation experience
so far. We are looking at that in the context of the wider housing
market and the circumstances in the housing market. Of course
it is right that we should simply take time to look at that carefully
before coming to a final decision.
Q171 Mr Hands: But it is a specific
phrase about the general conditions of the market. What is it
in those general conditions? Is it the price? Is it the supply?
Is it the number of transactions? What is it that you are looking
at?
Yvette Cooper: The fact that we
had a very quiet August, for example, meant that we needed to
take time to ensure that the implications and the impact and the
rollout throughout August and September were operating as we expected.
Obviously, the quietness of the market is something that you have
to take into account. We also simply need to make sure that we
have taken full advice from all appropriate areas to make sure
that we are taking the right decision at the right time. I do
not think there is anything particularly mysterious about this.
It is simply to say that had the housing market been operating
last year continually in the way that it was, had we not had the
greater uncertainty, you can come to decisions much more quickly.
Where you have greater uncertainty in the market—
Q172 Mr Hands: That is very important
here though.
Yvette Cooper: It is important
that you take time to make sure that all the implications are
worked through.
Q173 Anne Main: Can I just say that
I had not really finished my question. Given that you are looking
at the impact on the housing market, something that I raised on
several occasions when I met the home information pack providers,
a home information pack is disproportionately most expensive for
those who have shared equity inasmuch that they have to pay the
entire cost of the pack. Are you doing any assessment in terms
of the effect of home information packs on people who have a share
in a house rather than a whole house? Is it a disincentive to
buy or is it making things more difficult?
Yvette Cooper: Certainly what
we are trying to do is monitor the overall implications for every
different group of home sellers and buyers. I am very happy to
look further at the issue around those who particularly have shared
equity. At the moment the operation is around the three- and four-bedroom
properties and, as you appreciate, many of the shared equity homes
tend to be smaller properties as well for first-time buyers, but
I am certainly very happy to look at that further.
Q174 Anne Main: My final question,
if you could write to the Committee please, is that you did say
you were taking advice from all other sources to help the formal
decision as to whether or not or when the rollout should be. Would
you let us have a list of the people you are consulting?
Yvette Cooper: Sure. We have a
stakeholder group that we set up that we have taken advice from
and taken their views and so on. We are also just looking more
widely across the Department at different issues and different
impacts. I am very happy to let you know the names of all of the
organisations on the stakeholder group.
Chair: That would be very helpful.
Q175 Mr Betts: Staying with the issue
of energy performance certificates, while the Government might
want to take a wider view of the housing market conditions in
terms of HIPs, we actually have an obligation, do we not, in terms
of EU directives to deliver on energy performance certificates
and ensure that they are rolled out as quickly as possible? As
I understand it, the only reason for not fully implementing the
European Directive is a shortage of inspectors, but we have not
got a shortage of inspectors now.
Yvette Cooper: We also have to
make sure that the implementation is smooth, and so therefore
the timing of the introduction needs to make sure that it is practical
and smooth and that we take other factors into account. It is
certainly the case that our intention remains to roll out the
energy performance certificates as quickly as we can as part of
the HIPs programme.
Q176 Mr Betts: Just moving away from
HIPs and looking at the issue of rented accommodation, which is
also covered by the European Directive, at this stage we have
not got any implementation of energy performance certificates,
yet, taking the private rented sector, those are perhaps some
of the least energy efficient houses of all where landlords have
historically done very little to bring them up to a modern standard.
How quickly are we going to be able to roll out certificates in
the rented sector as well?
Yvette Cooper: We do not have
an assessment yet as to exactly how quickly we can do it and we
need to make sure the systems are in place for it, but I think
the fact of the energy assessors now being in place and the fact
that there are now energy assessors in place in every region and
growing numbers in place in every region does mean that we need
to look again at whether or not we can introduce the private rented
sector energy performance certificates more swiftly than we might
otherwise have been able to do. What I cannot give you at this
stage is a precise timetable. I am happy to write to the Committee
further on that one. January 2009 we have to get it in by, so
we have a clear timetable over the next few months to be able
to accelerate the process.
Q177 Mr Betts: I think that would
be helpful because that is an important sector as well. Can I
come back and clarify one point which I thought I heard you answer
earlier but was something we could not get an answer on last week?
There is a small percentage of transactions going through with
HIPs where the seller is volunteering to do a home condition report.
Are we going to have an analysis done of the difference in those
sorts of transactions and whether we have fewer failures with
an HCR combined in the HIP than where there is not an HCR? Last
week we asked the Permanent Secretary and he said he was not aware
of any research or analysis being done on that.
Yvette Cooper: We are trying to
get that information from the area trials, so rather than try
to track a kind of continuous, ongoing monitoring process of identifying
those properties where sellers are voluntarily getting home condition
reports now, which would be difficult to do across the wider market,
what we are trying to do is get precisely that kind of information
from the area trials.
Q178 Mr Betts: When will that be
available?
Yvette Cooper: It is taking longer
than we had hoped. The time constraint is for the researchers
to be able to track and interview the buyers. Obviously, the tracking
and interviewing process for the sellers was relatively easy at
the beginning of the process, but it is taking longer than the
research company and we had previously anticipated in order to
track and interview the buyers, but it is being done independently,
so we do hope to get the information shortly.
Q179 Mr Betts: Will we track and
interview people who would have been buyers but dropped out for
some reason in the chain? If we are going to do anything to improve
the whole process of buying and selling houses we have to stop
the situations of people making offers and then withdrawing them.
Are we going to interview them as well, because it is a very important
part of the research to do so?
Yvette Cooper: I can try and send
you some more information on it, but certainly the intention behind
the trials was to look at issues around failed transactions. What
I am not sure is how much individual or qualitative data they
have gathered for those kinds of cases and interviews with buyers
to provide more information.
Mr Betts: That would be very useful.
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