The
Committee consisted of the following
Members:
Bottomley,
Peter
(Worthing, West)
(Con)
Clapham,
Mr. Michael
(Barnsley, West and Penistone)
(Lab)
Crabb,
Mr. Stephen
(Preseli Pembrokeshire)
(Con)
Flello,
Mr. Robert
(Stoke-on-Trent, South)
(Lab)
Goldsworthy,
Julia
(Falmouth and Camborne)
(LD)
Harris,
Mr. Tom
(Glasgow, South)
(Lab)
Holloway,
Mr. Adam
(Gravesham)
(Con)
Jackson,
Glenda
(Hampstead and Highgate)
(Lab)
Ladyman,
Dr. Stephen
(South Thanet)
(Lab)
Lloyd,
Tony
(Manchester, Central)
(Lab)
Riordan,
Mrs. Linda
(Halifax)
(Lab/Co-op)
Shapps,
Grant
(Welwyn Hatfield)
(Con)
Teather,
Sarah
(Brent, East)
(LD)
Watts,
Mr. Dave
(Lord Commissioner of Her Majesty's
Treasury)
Wright,
Mr. Iain
(Parliamentary Under-Secretary of State for
Communities and Local
Government)
Yeo,
Mr. Tim
(South Suffolk)
(Con)
Gosia McBride, Committee
Clerk
attended the
Committee
Third
Delegated Legislation
Committee
Monday 26
January
2009
[Joan
Walley in the
Chair]
Home
Information Pack (Amendment) (No.3) Regulations
2008
4.30
pm
Grant
Shapps (Welwyn Hatfield) (Con): I beg to
move,
That
the Committee has considered the Home Information Pack (Amendment)
(No.3) Regulations 2008 (S.I. 2008, No.
3107).
Being
back in the room is almost like being in a recurring bad dream. That is
not because of your chairmanship, Ms Walley, but because we are once
again debating regulations relating to home information packs with the
same Minister. On each occasion, he does his best to explain why the
next piece of creeping HIPs legislation, which will make it harder for
people to put their homes on the market and sell them, is, in fact, not
bad for us or the market place.
The
Ministers latest bossthe third in a yearthe new
Minister for Housing, before being indoctrinated into the views of her
predecessors, perhaps got it right when, just after taking over the
post, she said to the Communities and Local Government Committee:
I fully accept that
HIPs
are
perhaps not the perfect vehicle one might wish to
see.
While
she made it clear that HIPs have many shortcomings, she did not include
among them the fact that they do not involve questionnaires for the
seller, so why have the Government changed their view to see that as a
sudden problem?
The
Governments research, which was commissioned by the Department
for Communities and Local Government and slipped out last October on a
Friday afternoon, concluded that there was a very limited
understanding of the purposes of HIPs and that there was a
low level of knowledge about them among the public. The
report
stated:
A
large proportion of participants stated that the requirement of HIPs
made the buying and selling process more complicated.
Despite that, these
latest regulations seem to show that the Under-Secretary of State for
Communities and Local Government, the hon. Member for Hartlepool, and
the Minister for Housing have decided that the problem with HIPs is
that they are not cumbersome enough and that the way to make them work
is to put yet more bureaucracy and red tape in the way of someone
wishing to sell their
home.
I
ask the Minister to address that point directly and to explain how, in
a housing market that is struggling more than any on record and when
house prices are falling quickly like rocks to the bottom of the ocean,
the solution can possibly be to make the process yet more cumbersome by
introducing yet more bureaucracy that makes it harder rather than
easier to sell ones home. That belief is not some obsession of
Conservative Front Benchers, as he might try to describe it, but
almost universally held. Almost no one out there, as far as I can tell,
thinks that HIPs are useful or that introducing additional HIPs
legislation will make it easier for people to buy and sell their
homes.
The
independent Carlsberg review, which reported last year, stated that
HIPs were the worst of both worlds and specifically
warned against the kind of gold-plating that the regulations implement.
It has been widely reported that buyers have shown little interest in
HIPs and that sellers find it frustrating that, in a slowing market in
which fewer homes are being sold, the same information has to be
repeated by way of searches when the previous searches become out of
date. The Council of Mortgage Lenders recommends to lenders that no
search should be more than six months out of date.
Will the
Minister tell us how a questionnaire for the seller, which will also be
liable to become out of date due to the time it is taking to sell homes
in the current market, will be of any assistance to anyone whatsoever?
It is a tragic irony that at the exact time when a Government should be
making it easier for people to sell their homes in this dire market by
removing bureaucracy, this Government think that the answer is to make
the process still more
complicated.
4.35
pm
The
Parliamentary Under-Secretary of State for Communities and Local
Government (Mr. Iain Wright): It is a pleasure
to serve under your chairmanship, Ms
Walley.
I
have a sense of dÃ(c)jà vu when I debate home information
packs with the hon. Member for Welwyn Hatfield. We have been here a
number of times before. He has prayed against the regulations, and this
is about the seventh or eighth time we have debated the concept of
HIPs. However, perhaps we should concentrate on the regulations under
discussion
today.
The
regulations will implement changes that were announced on 8 December by
the Minister for Housing. I believe strongly that they will enhance the
content and quality of HIPs for consumers and ensure that they can be
seen at the start of the home buying and selling process. The hon.
Member for Welwyn Hatfield will be delighted to hear that
the changes finalise the implementation of HIPs, thus providing the
industry and consumers with clarity and certainty. That will help to
build much-needed confidence into the operation of the housing market.
The hon. Gentleman talked about the current state of the housing
market.
Peter
Bottomley (Worthing, West) (Con): Will the Minister
pretend that he has written his speech and use the word
purchaser rather than
consumer?
Mr.
Wright: What an interesting point. It is important that
purchasers, consumers, house buyers or whatever we call them would like
to see relevant information up front when buying a home, which is the
biggest single investment that most people are likely to make. That
will allow them to weed out the properties that they do not wish to
consider, and the process will provide further information on those
that they wish to take forward as part of the house buying and selling
process. In a nutshell, that is what the HIP provides.
I am
disappointed and bemused that the hon. Member for Welwyn Hatfield
opposes an approach that I think is sensible although, to be fair to
him, he has at least been consistent. It is perfectly rational and
sensible to ask whether we can provide information up front to house
buyers. House buying and selling has involved far too much delay and
procrastination, and that has cost consumers millions if not billions
of pounds. We must do something about that and HIPs are an important
part of our
approach.
Mr.
Tom Harris (Glasgow, South) (Lab): If I am out of order by
broadening this debate too far, I am sure that you will let me know, Ms
Walley.
In
the time that my hon. Friend has occupied his office, has he given any
thought to the alternative system that has run well in Scotland for
many years? Simply put, before buying, the buyeror the
purchaserforks out money for a full survey from a surveying
company. That seems to have worked extremely well. Was that considered
before HIPs were
introduced?
Mr.
Wright: When we were bringing forward reforms to the house
buying and selling process, we considered what my hon. Friend suggests.
There are radically different processes for buying and selling homes in
Scotland and in England and Wales. It was decided that HIPs were more
consistent with the culture in England and Wales. Taking the different
cultures into account, HIPs are a good
compromise.
Home
information packs have been operational for a number of years. They are
beginning to produce real benefits for house buyers and sellers.
Despite a slowing market, HIPs are speeding up transactions. A recent
survey of 16,000 transactions showed that when a HIP was available,
exchanges were completed, on average, six days
earlier.
Mr.
Adam Holloway (Gravesham) (Con): If HIPs are so
marvellous, why do we not see widespread support for them among house
buyers?
Mr.
Wright: There has been widespread support among house
buyers who have seen HIPs. With the regulations introduced by the
Minister for Housing, we are trying to improve the situation. The key
point is that estate agents often provide the HIP and it goes into a
drawer. Once we provide information to the house buyer up front, we
will see the
benefits.
The
energy performance certificate is a key aspect of the HIP. People are
concerned about high energy bills at the moment. The energy performance
certificate can give real practical solutions on how to cut energy
bills and ensure energy
efficiency.
Mr.
Michael Clapham (Barnsley, West and Penistone) (Lab)
rose
Mr.
Wright: I will give way to the hon. Member for Welwyn
Hatfield and then to a great advocate of energy efficiency: my hon.
Friend the Member for Barnsley, West and
Penistone.
Grant
Shapps: I absolutely agree with the Minister about energy
performance certificates, but I cannot understand why they could not
have been introduced here, as they have been in Northern Ireland,
without the need for a HIP. Incredibly, the Minister claims that
consumers, as I think he now calls them, are pleased with HIPs, yet
page 9 of the Governments research, which slipped out last
year,
says:
A
large proportion of participants stated that the implementation of HIPs
made buying and selling more
complicated.
Will
the Minister explain how they have made things
easier?
Mr.
Wright: Will the hon. Gentleman intervene to tell
me the proportion of people who have said that? While he tries to find
that information, I give way to my hon. Friend the Member for Barnsley,
West and
Penistone.
Mr.
Clapham: I want to raise an issue that was brought up in a
letter that appeared on my desk a few weeks ago. As the Minister knows,
before a property can be sold, an energy evaluation is required for the
HIP, but the type of energy installation does not need to be listed.
This case relates to what the Minister said about the increased cost of
energy. A chap was about to sign the contract and had not been told by
the estate agent or his solicitor that the installation in the property
used liquid petroleum for heating, which is extremely costly. Many
villagers in my constituency use liquid gas. A villager in Hood Green
who wrote to me recently said that he expected his energy costs to be
in the region of £1,400 this year. Given that situation and the
increasing cost of energy, will the Minister consider whether we ought
to list the type of energy
installation?
The
Chairman: Order. To remain strictly in order, I hope that
the Minister will keep his comments to the regulations before
us.
Mr.
Wright: Thank you for keeping me in order,
Ms
Walley.
My
hon. Friend makes a valid point. Ensuring that consumers have relevant
information to help them to make informed choices on whether to take a
transaction forward or whether to make energy improvements is a key
issue. The energy performance certificate provides that information at
the moment. A household could save an average of £300 a year on
its energy bills.
Grant
Shapps: The Minister is being very kind by giving way
again. He is introducing a range of measures to toughen up HIPs, and he
was rightly interested about the proportion of people who thought that
they were a good idea in the first place. I have found independent
YouGov research, which was commissioned last year, showing that only 5
per cent. of those surveyed said that HIPs had delivered
benefits.
Mr.
Wright: I completely and utterly disagree with what
the hon. Gentleman says. All the evidence suggests that when consumers
actually see the HIPseeing it is keythey recognise that
it can provide the relevant, up-front information that they need to
make the biggest financial decision of their lives: whether to purchase
a home. Some 18 months ago, the hon. Member for Welwyn Hatfield said
that HIPs were bringing down the property market, but in times of
rising house pricesand,
frankly, falling house pricesHIPs have had no impact on
transactions. There are wider considerations than the introduction of
HIPs. The HIP is an extremely important first step towards achieving
our objective of having better informed buyers within a buying and
selling process in which consumers can expect to receive a consistent,
good-quality service from property professionals and better value for
money.
The hon.
Gentleman says that no one is in favour, but key stakeholders, such as
the Royal Institute of Chartered Surveyors and Which?, have welcomed
the work underway across Government on how to ensure that the consumer
gets a fair deal when buying and selling a home and the commitment to
look further at how the content of the HIP can be expanded or improved
to benefit consumers. The steps that we are taking, which were
announced my right hon. Friend the Minister for Housing on 8 December,
will make a huge difference. However, if consumers are to benefit
fully, it is vitalI cannot stress this enoughthat they
see and use the HIP early in the process. To allow that to happen, my
right hon. Friend announced that the existing temporary regulations
that allow for a delay in providing a HIPthe first-day
marketing provisionand the use of insurance cover for property
searches, which we discussed in Committee last month and were
originally due to expire at the end of December, will be extended until
only 6 April
2009.