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Baroness Maddock: Earlier on, the Minister used the figure of a 28 per cent failure rate for transactions. He then said that 43 per cent of those were due to the survey going wrong. That is only 12 per cent of the total.

Lord Rooker: So what?

Baroness Maddock: The Minister is accusing noble Lords of talking the figures down yesterday and I think that that is something like the figure that came out yesterday.

Lord Rooker: We have an enormous number of failures. I have broken that figure down and it does vary. That was the claim that we made and our own research showed that only 13 per cent of transaction failures were for that reason. I was not hiding the figure. In fact, I used the figure yesterday of 13 per cent at the same time as I used the figure of 43 per cent. But, taken in the round, we have a major problem of waste of money and distress caused to people in this country.

I want to put seven brief examples on the record because the department receives a steady stream of correspondence from people who have been let down by the current system. These cases show that our estimate of the cost to individuals of failed transactions is vastly underestimated. We have used £350 million, which averages about £600 for buyer and seller together. I want to give some recent examples that have come into the department. They are very brief and there are only seven of them.

The first one relates to a lady in Somerset. Her offer on a property was accepted but the property was then withdrawn from the market by the seller after four months, as planning permission papers for garage access could not be produced. She wasted £730 on valuation and search fees. This is in addition to a previous attempted purchase where the property was withdrawn after three months, due to problems with the property. On that occasion, £680 was wasted on valuation and search fees.

A Brighton pensioner had her offer of the asking price accepted. She then engaged solicitors and had the survey done but days before the contracts were to be drawn up the vendors withdrew, leaving her with a bill of almost £1,000 and nothing to show for it.

A young London couple with a young daughter spent months looking for a property. They then spent months going through the buying process, spending almost £2,000 on fees. They signed contracts to the point of pre-exchange. The sellers pulled out at the last minute. All of those sums are well above the £600 figure that I used.

A vendor in Cardiff accepted a couple's offer on a property. They became nervous when a "To Let" sign was put outside the property, but the vendor assured them that the sale was still on. At the last moment, the property was withdrawn. The couple had spent all their savings—more than £1,000—on surveys, searches and fees, and have absolutely nothing to show for it. Again, that is well over the £600 figure.
 
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In Gateshead, a vendor assured Mr F four times that the property would be his, after agreeing to terms on the house. He paid for the search fees. The vendor then informed him that the property had been sold to another couple. He is afraid that that could happen to him again and again, costing him thousands of pounds before he has even paid his first mortgage instalment.

In the south-west, in Exeter, a lady wrote on behalf of her daughter—a first-time buyer and a nurse—whose offer on a £90,000 flat was accepted. The seller pulled out at the last moment after the writer's daughter had paid for a survey, searches and other items that cost more than £1,000. The final solicitor's bill is yet to come on top of that.

My final example is that of a couple of young architects in London trying to buy a property for some time. Eventually, they had an offer accepted a few months ago. A week before completion the seller pulled out as he wanted more money. They have paid out several thousand pounds on abortive fees with no recourse, plus distress and upset.

Those examples are just a sample of the letters that come into the department. As I have said, 18 months ago I addressed the National Association of Estate Agents. I did not use the prepared speech, I just asked for the last 20 letters that I had signed to Members of the Commons in answer to queries from their constituents. I chose a dozen examples to read out instead of the speech in order to try to explain that there was a problem. I was accused of all kinds of things, but I just said, "Well, this is the people speaking; not me or the Government".

One of the letters did not go down very well because it was from an estate agent who had spent 25 years as a police officer. He had some quite disparaging things to say about buying and selling houses, which were far worse than anything that he had come across when he was a police officer. That did not go down at all well. I really had to ensure that I did not disclose his location in the country.

I am not claiming that the examples I have given are scientific. But, I am saying that our figure of £350 million for the waste is a very conservative figure based on the 30 cases that we had. With a £600 average cost for buyers and sellers—I am quoting only potential buyers here—the costs involved in every one of those examples are well above that figure.

The noble Earl wants to rise and respond. He will be able to explain his own views: he has brought to this debate his personal experience. But on the website of the estate agency where he is a consultant, the average properties for sale are between £500,000 and £2 million. Frankly, that is not the generality of house buying and selling in this country.

The noble Earl is expert in a very atypical part of the country. He is expert in other matters and I have found his contribution extremely valuable. But that is a matter of public record. On the website of said estate agency, the highest value property is £4.6 million; the cheapest is about £300,000 for a studio flat. That is not typical of buying and selling properties for the 40,000 dwellings that are put on the market each week in this
 
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country. Although the noble Earl can bring his technical expertise to our debates—for which I am very grateful—frankly, in terms of his expertise of buying and selling on a daily basis, that is not relevant to the generality of millions of people in this country who are buying and selling houses every day. As he clearly wants to get up, I shall give way to him.

The Earl of Caithness: I am very grateful to the Minister for giving way. Yesterday, I said that I agree that the market in which I work is a specialised sector. But that is part of the housing market. There is no one housing market: every area is specialised. From the bottom end of the housing market with the lowest capital value houses, which will be excluded from the home information pack and the home condition report, right up to the top value houses, they are all part of the housing market. However, the transactions are exactly the same. We have the same problems with people pulling out and potential buyers wasting time that every other market has. All that is different is the price bracket.

Let us look at what the Minister has just read out to us when it comes to failures because of valuation. Nothing in the Bill is going to affect that—there is no change. The home information pack does not contain a valuation. Perhaps it should, but there is nothing that will change the present situation. The vendor's agent will put a price on the property. If the purchaser comes along and the sale falls through because he or his mortgage company has a different valuation, that will be no different. The situation remains the same. The same letters will still come into the department.

The pre-purchase survey will change little. There is going to be a home condition survey. That is not a full structural survey. The Minister has said that all that is required of that survey is that it must be made within three months of the property being marketed. Let us imagine that we are in a poor property market and someone's house has been on the market for nine months. A potential purchaser comes along and asks whether anything has changed since the home condition report. The vendor will then say, "Yes, you look for yourself. That was the home condition report at the date that it was marketed. It was valid at the date of its market. Yes, things have happened, but caveat emptor"—I have the same problem with Latin as the Minister—"it is up to you".

So the buyer has to carry out his own survey at his own cost. There is no change to the current situation; we are back to the same position. The department will still receive letters about pre-purchase surveys. Let us say that the seller pulls out; sellers pull out for all sorts of reasons. In the key research to which the Minister referred sellers pull out because of changes in financial circumstances; because they did not continue the purchase of the house; because they decided to stay where they were—there are all sorts of reasons for pulling out. Nothing in the Bill or the home information pack will alter that in the slightest.
 
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Let us say that the property is sold to another person. That is going to happen. It does not matter whether there is a home information pack. If someone else comes along with a higher offer, the vendor will sell. The agent is duty bound to obtain the best price. The department will still receive letters.

The Minister referred again to sellers pulling out. The one area where there could be a potential change is to have the searches upfront, which might speed up the process. But there is no requirement to keep the searches up to date, so if the property has been on the market for nine months, all that the vendor's agent has to say is, "Yes, the searches were done in accordance with law. It is up to you to check whether it's changed. I am not going to spend any more money. Prescott has made me spend all this money upfront. I'm not going to do a darn thing more. Why should I? It's up to you as the purchaser".

What in reality is going to happen is that there will be a change for properties that can be sold quickly in a good market. In a bad market we will be back to exactly the same position as now. One noticeable thing that will change is that the purchaser will be presented with a home condition report. Most purchasers do not have any survey or condition report undertaken now. They will be handed 20 pages—which are pretty general; we will come to that in a moment. They will ask whether anything has changed. As the agent I will say, "Yes, it is up to you to check what's changed, because it's caveat emptor". They will then in all probability get in a surveyor to carry out another report, which they are not doing at the moment. That pack will lead to more expense.

I understand exactly where the Minister is coming from. But the Bill does not change a single iota of what he said, except possibly for houses that are sold quickly in a bull market.

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