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The Earl of Caithness: I am grateful. I will take up that offer. Seldom does one get an offer like that from the Minister and when one does one cannot resist it.
I raised the question of low-value homes on Second Reading of the Homes Bill on 28 March 2001, (col. 351 of Hansard). Could the Minister tell us more about what is in his mind with regard to regulations? He is going to create two tiers of market, anyway. If one has a different set of rules for a property below a certain capital value, one has a two-tier market and stigmatisation for that bottom tier. I agree with him that it is a very difficult problem to get right. The Government have set themselves on this course and they have to get themselves out of this hole.
When the Minister talks about a different set of rules, is he talking about not having a home condition report, or not having a home information pack? Will it be entirely voluntary? Will it be a partial home information pack, or a partial home condition report? We have to look at the situation of not just the low-value home but of a bad market. If it will be difficult to sell a house in good condition in that market, it will be even harder to sell a house of low value that is not in good condition. If that house is not in good condition and there is not a home condition report on it, the problem that the Government are creating gets more intensified and magnified.
I ask the Minister to tell us a little more about this matter as it is an area that we ought to be able to debate. It is fine for the Government to say that they are thinking about the matter and that they will produce regulations, but for people in such a house there is probably another problem: they may be living on very low incomes. If they had a better income they could move. There could be horrendous problems—low capital value, low income, a bad market and a whole lot of costs imposed on them by the Government before they try to sell their house. If the house does not sell, how can they afford to move? There is no way that they can do so; if they could, they would be out of that house. Can the Minister tell us more about that situation?
Lord Greaves: Does the Minister want to answer?
Lord Rooker: No, because I have not got an answer. I invited the thoughts of noble Lords. Some of the issues raised by the noble Earl are the very matters that we will have to consider. We are in listening mode having done some research and consultation. First, we have not said that we will proceed. I said that if we choose to proceed we would probably go for the monetary value rather than a geographical designation because of not wanting to black list an area.
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Secondly, we would come up with some other form, which could be a variation on the home information packs. One can think of several variations, some of which the noble Earl touched on, to lessen the burden so that it is proportionate to the issue relating to someone who has a low-value property to sell.
Lord Greaves: I congratulate my noble friend on raising the issue as it is important, although I am not sure that the amendment is the way to deal with it. Nor am I sure how far areas of disadvantage—I am not certain what they are—coincide with the market renewal Pathfinder areas. There must be some areas of disadvantage and very low house values that have not been designated as part of the Pathfinder areas. That is bound to be the case; it may be pockets here and there, or may be larger areas. If something is to be done, it is important that it not be available only to the Pathfinder areas.
As I said yesterday, I look at the matter from the point of view of the east Lancashire Pathfinder area in particular, which I know quite well. I do not live in it, but I live almost within spitting distance of its boundary. As the Minister said, it is a very important project. Such areas will sink or swim by its success, at least for the next 20 years.
I am not too concerned about stigmatising areas that have already been defined as having a problem of low demand and low prices. An example would be someone who lives in an area such as Burnley Wood in Burnley. I do not know whether the Minister has been there, but some of his colleagues certainly have, and they were all astonished to learn that they could buy whole long streets for five-figure sums—every house in the street. People would have grabbed their hands and said, "Thank you very much", because no one else will pay a penny for them. Such areas are extreme examples of a problem, and extreme within an area such as east Lancashire.
It is clear that, in such areas, the cost of producing the housing information packs could be a bar to even selling a house at all, because it would be a relatively high proportion of the total cost. The matter needs to be looked at. However, particularly in Pathfinder areas throughout the country, if there are to be different rules for cheaper houses, it is important that they be made in a way that is seen as part of the overall package of what is being done in those areas.
By that, I do not only mean the overall programme to stimulate the housing market there; in some of them it is being stimulated already, simply by the fact that they have been declared Pathfinder areas. In some of them at least, including parts of east Lancashire, house prices are going up at an astonishing rate, which appears to be at least in part a response to the fact that they will be such an area. We say that we are going to stimulate a market and—markets are funny things—sometimes that in itself results in the market being stimulated. However, there are still lots of housing problems there, such as the empty and run-down houses and the areas that need refurbishment, into which we hope that the investment will go.
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There would be no harm in tailoring what is done in Pathfinder areas at least as part of the package. I do not know whether we could have different rules for different parts of the country but that might be a good idea in the Pathfinder areas, which are being targeted specifically.
I want to echo what the noble Earl said—people are buying the properties. Perhaps he did not say that; perhaps the Minister did. It is important that those people have the same protection as people in other places. They may buy properties as owner-occupiers, or may take advantage of a new generation of housing grants being made available in some of the areas to revive them. If people are doing that, there will be a lot of investment in those houses. They should be thought of as being potentially higher-value houses, although they might still then be sold for between £40,000 and £70,000. People in London might still think that incredibly cheap, but those of us who know the areas well and see some such prices being achieved think the way that they are going up extraordinary. In order to help the sellers, we should not be forgetting the buyers.
In other cases, where the houses are now being scheduled for demolition, it is important that people from other areas—perhaps from the south of England who think they are dirt cheap—should not be buying them on the Internet or in any other way and ending up with houses which will then be taken off them to be knocked down. Again, it is important to think that the full information is provided as in other areas.
The Minister's comments in relation to this were interesting. They and the Government's approach seemed to me to consist of a great deal of common sense
Lord Rooker: I am grateful to the noble Lord, Lord Greaves. He is right that the mere announcement of a board, the publication of prospectuses and the plans, the injection of the seed-corn or start-up money and the gearing of other moneys has already had an effect. Even people who have speculated would, in the normal course of events, be annoyed. However, it is recreating what disappeared—a functioning housing market.
If one is London or south-east centric, it is difficult to grasp the scale of what is happening—and not only in the Pathfinder areas. Not all the Pathfinder areas are incredibly low-demand and abandoned—there is one in which that is not the case—and the geographical approach would not be the right way forward, for reasons I have given.
I will make a final point. The whole Bill is a consumer protection measure. If we made special reasons or regulations which exempted some or part of the home information pack system, we would not want to reduce the protection for the buyers and the sellers. That would be against the grain and quite unfair. People might be buying a low-value property, but they would be entitled to have the consumer protection back-up in so far as we can provide it so they are not
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materially disadvantaged. That is a point we will take on board and I am grateful for what the noble Lord said.
Baroness Hamwee: I, too, am grateful to my noble friend for his thoughtful contribution. At the beginning of my comments, I mentioned London to see whether I might spark a little recognition from some people. I know they live in the areas that are, as the Minister put it, red-lined for the purposes of stamp duty exemption. We have red-lining and designations for that, for selected licensing—when that is enacted—and for the market renewal Pathfinder barriers.
Not long ago, I, as executor, sold a flat which had belonged to my uncle in Salford. It eventually sold for something like £25,000, but it took about three years. I wonder what I would have done if I had had to produce the home condition survey and so forth and then keep on renewing it. It was enough putting in new carpets, a new kitchen and so forth to make it look more attractive. Commonsense issues are involved.
I might have taken the flat off the market and let it sit empty. But I probably would not have because I would have felt desperately uncomfortable about it. It goes against all my instincts about using property. I am sure that the Minister understands.
When the Minister was talking about the Pathfinder areas, my noble friend Lady Maddock asked whether the Government had considered using Pathfinder money to pay the cost of these packs. That is another comment that the Minister can take back to his right honourable friend. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 144 [Contents of home information packs]:
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