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I can confirm that £1 million a day is wasted in failed transactions; that is a well worked figure. Secondly, I confirm that the scheme has friends, certainly in this House, I am delighted to say, and in environmental groups which see the huge benefit of confronting as fast as we can the waste that we subscribe to by not being serious about saving carbon and not knowing how our houses use heat and how we can save on costs and energy. My noble friend is right on both counts, and I look forward to what I think will be a splendid speech shortly.
Baroness Hamwee: My Lords, the Minister talked about being open and frank. With a view to achieving that, can she tell the House when the Government will publish the results of the pilots and studies that have been running? They must not merely take those results on board but share them with the rest of the House, stakeholders and the public generally. When will the Government publish a full response to the report of the Merits of Statutory Instruments Committee, which dealt not only with home information packs but with the energy performance of buildings regulations? I guess that it will be delayed in a similar manner, although I am not sure that I have heard that. The Minister will be aware that many noble Lords on this side are keen to see energy performance certificates introduced in an effective manner that is acceptable to the public.
Baroness Andrews: My Lords, we will certainly publish the results of the pilots at the end of the research cycle. Because of the length of transactions—we must look at the impact of home condition reports on them—that will be in the autumn. We put two full documents in the Library in response to the Merits Committee, including the RIA in which the costs and benefits were worked out. I will see what else we can do in response to that.
Baroness Gardner of Parkes: My Lords, why are the Government talking about four-bedroom houses if they want to be forward looking? We have heard from the noble Baroness, Lady Scott, and my noble friend Lord Tebbit that this definition is not firm at all. The Minister has replied that she is sure that the Government can look at something firm. Everyone who now buys a property does so according to square footage. The district valuer works on both square footage and square metreage of a property. Surely that is the clear-cut definition of how to determine the size of a property, rather than saying how many bedrooms it has. I reinforce the points of the noble Baroness, Lady Scott, and my noble friend Lord Tebbit.
Baroness Andrews: My Lords, I am listening closely to what noble Lords are saying about this. There will be a chance to look at the revised regulations when they are introduced. I will provide the House with as much information as possible before then.
Lord Berkeley: My Lords, what will happen if people who own properties with fewer than four bedrooms—three, three and a half, or whatever it is in square metres—believe it is in their interest to produce HIPs with energy performance certificates after 1 August but before the end of the year when the full scheme comes into operation? Many of them, possibly first-time buyers, may think that it is a selling point. They will save an average of four buyers commissioning surveys, environmental reports, searches and everything else in the intervening period. This would be on a voluntary basis, but would the Minister consider including that in the new regulations?
Baroness Andrews: My Lords, I will certainly take away what the noble Lord says. On the fascinating subject of the four-bedroom house, I argue that there would be a financial disincentive to market a property on the basis that it has fewer bedrooms than it has. I cannot see the logic of noble Lords’ concerns about that. We will certainly ensure that we have the number of assessors needed to bring smaller properties with fewer bedrooms on to the market as we proceed.
Lord Redesdale: My Lords, does the Minister take heart from the fact that, in a debate on home improvement packs in another place, both opposition parties gave a great deal of support to EPCs? I hope that we would not now bury this valuable aspect of the report, which is supported by all sides of the House. I find it distressing that they are not being brought in as quickly as possible. Those of us worried about climate change realise that some of the most wasteful properties are old ones that must be improved and insulated. EPCs are one way that that could happen. Although there has been a great deal of disquiet and justifiable anxiety about how this process has been brought to this point, I hope that the Government will implement EPCs at the earliest opportunity. They have the support of all parties, as I am sure will be confirmed by all those speaking. It is therefore unfortunate that, by the Government’s figures, if we are to save 1 million tonnes of carbon a year, we will probably lose about 250,000 tonnes of carbon dioxide into the atmosphere during this delay.
Baroness Andrews: My Lords, the noble Lord makes an important new point about the unfortunate but inevitable implications of delay. He is absolutely right: we are not going to renege on EPCs. They are an extremely important part of our national policy for carbon reduction and of what people can do for themselves in cutting energy and bills. We will continue to consult closely with the environmental groups to ensure that we do this in the best way. We must now look at some of the issues raised by stakeholders during the consultation.
The Earl of Caithness: My Lords, I declare an interest as a surveyor and a member of the Royal Institution of Chartered Surveyors. I congratulate the Government on alienating the institution—the one body that was behind them throughout the legislation—which tells me that it cannot have any reasonable dialogue with the Government and has not been given answers to lots of questions. It is not surprising that it took the Government to judicial review.
The Minister is aware that I am included in her statistics about those training to be assessors, but she is not aware that I have refused to get fully qualified because of the waste of money that the Government have put me and hundreds of other people to. We spent a lot of money getting qualified for a new career that the Government have now taken away from us. A lot of surveyors who were on the course that I was on have decided not to become assessors for EPCs by themselves because it is not a sensible thing for a surveyor to undertake, particularly in a small practice.
The Minister said that the kits are useful; nobody is denying that. However, the market has taken care of improvements to the buying and selling process without central dictatorship from government. Lawyers have instituted better conveyancing—there is now e-conveyancing—and surveyors are getting more information upfront. The Government do not need to tell us to do that; everybody wants to do it.
The introduction of four-bedroom houses will give us surveyors such fun. We are going to have really good details from now on. My noble friend Lady Gardner of Parkes mentioned houses being sold by square footage. That might be the case in central London but not so much in the country. We are going to have real joy with three, four, five and six-bedroom houses. The poor trading standards officers, who are pushed for time now as there are not enough of them in local government, will come scurrying round. It is a mess. Please, just drop it.
Baroness Andrews: My Lords, I hope the noble Earl completes the accreditation course, as the process is obviously going to be so much fun. I imagine that he will find it a better possibility.
As I said in the Statement, we are pleased that we have arrived at an accommodation with RICS. That takes us forward. The noble Earl said that he is not going to complete his accreditation course. We think that one of the reasons why people were slow to finalise their accreditation after they passed their exams, probably after they had done their five practical EPCs, was that they were uncertain what was going to happen. That uncertainty was wound up in different ways, not least by some of the newspapers, and we are sure that removing it will help. That is the only explanation we have for why so many people in training were being so slow to pay their final fees.
The noble Earl’s second argument was that the market will do its own job and regulate itself. We have not seen evidence of that, and the noble Lord, Lord Elystan-Morgan, made that point. However, where HIPs have been introduced—on a voluntary basis or in the trial areas—there has already been a shift in the market that is driving up competition. Local authorities could charge variable fees for searches, but 25 local authorities have already lowered their fees. We are not relying simply on HIPs to improve the process. We think they will provide a platform for the market to improve its own processes through introducing competition—noble Lords opposite are surely in favour of that. That will make a difference to the way things are done, which has not changed for at least a generation.
Lord Brooke of Sutton Mandeville: My Lords—
Baroness Morgan of Drefelin: My Lords, it is the turn of the Cross Benches.
Lord Cobbold: My Lords, cannot the EPC be disassociated from the sales process and, like an MoT certificate, be valid for 10 years, as suggested in the European directive?
Baroness Andrews: My Lords, we do not believe that is the right thing to do. EPCs and HIPs together make up a coherent and effective package. If they were split, both would be weaker. We have a delivery mechanism with HIPs to develop the EPCs. Because they are inter-related, the regulations reflect that interdependence.
Baroness Maddock: My Lords, I think it is our turn. Will the Minister give us any further information about large-scale voluntary transfer? I declare an interest in Berwick borough council. We are half way through LSVT. She will know that I support measures to try to reduce emissions from housing; that is important. I am also aware of the very difficult process councils go through with LSVT. It would be much appreciated if the Minister could give concrete information as early as possible about how the provisions will affect that process. Can she indicate when she will be able to do that?
Baroness Andrews: My Lords, I cannot, I am afraid. It is something that we need to get absolutely right. We need to have discussions with individual RSLs to know what is possible at what pace and with what implications. It would be wrong of us to try to collapse that process in any way. I am afraid that it will take time, but I will try to keep the noble Baroness fully informed about our progress.
Home Information Pack Regulations 2007
5.06 pm
Baroness Hanham rose to move, That this House calls on Her Majesty’s Government to revoke the Home Information Pack Regulations 2007 (SI 2007/992), to take account of the report on the regulations by the Merits of Statutory Instruments Committee and not to lay further regulations concerning home information packs until after full consideration by the Government and Parliament of the pilot schemes and of the representations of stakeholders and consumers.
The noble Baroness said: My Lords, we seamlessly move on in this debate. Noble Lords will share with me an overwhelming sense of déjà vu as we debate again these infamous home information packs. I tabled this Motion in response to the Government’s intention to introduce the Home Information Pack Regulations from 1 June. They have rightly now changed their position—all in the blink of an eye. Still, the Government intend to reintroduce these regulations despite extensive and authoritative objection to them from all sections of the housing industry, strong opposition in another place and the highly critical assessment from the Merits of Statutory Instruments Committee in its 18th report. Its thorough investigation and informative findings were backed up by evidence from professionals from all aspects of the housing industry.
Feeling among professionals and consumers on these regulations is unanimous: they are unnecessary and cannot work. The Motion today reflects that view. It tells the Government to take the regulations away and to think long and hard again. This has been a fiasco from start to finish. I remind noble Lords that the original intention was that each home information pack should contain a home condition report. Those had to be abandoned last year when it became apparent that there was no confidence that they could be relied on. Mortgage companies were not happy that they would contain sufficient information on which they could base mortgage offers. Potential buyers did not feel that they would provide sufficient information about the condition of the property. And, in any event, there were insufficient trained home inspectors to undertake the work involved.
Therefore, the proposals were jettisoned in favour of some “dry runs”—pilots to you and me—reports of which have still not been made available. I am glad to hear from the Minister today that we are likely to see some results in July, although some seem to be being delayed until August, which is after the new start date of these new regulations.
Not to be put off, the Government then turned the tables and decided that the main ingredient of a home information pack would not be a home condition survey but an energy efficiency report, which—as Yvette Cooper, the Minister in another place, said—one would give to a property rather as one would to a fridge. This would take pride of place in the pack. Domestic energy assessors had to be recruited and trained to perform this tick-box exercise. To date, although some have been trained, few, as the Minister has already told us, have been accredited or cleared by the Criminal Records Bureau, so they are not in a position to do the assessments, which must be done before a property can be put on the market. In short, there are simply not enough assessors to cover even a small proportion of the properties that will require an energy report from, we understand, 1 August. The Minister accepted that in the Statement today. Yet the department did not see fit to inform the House or the public until the last possible moment.
I am bemused by the fact that the Government delayed these regulations without waiting for the pilot schemes to conclude or having enough assessors in place, and for no other reason than a last-minute panic attack as a result of poorly thought-through policy brought on by poorly planned administration. The Minister told us in a reply to a question earlier this afternoon that there are 2,000 trained inspectors and 3,500 inspectors in training, but that only 500 inspectors are actually accredited. The Royal Institution of Chartered Surveyors was so concerned about the lack of consultation on the home information packs that it initiated the judicial review proceedings against the Government, which have brought this whole thing to a grinding halt. The stark truth is that the Government have made a complete mess of this, because they did not, and still do not, have sufficient inspectors to carry out the assessments. In any event, they have gold-plated the EU directives by making them a condition for the sale of a house, rather than as part of a 10-yearly inspection. Despite endless questions from this House, it is now apparent that the energy performance certificates were not in a state fit for implementation.
Like the Royal Institution of Chartered Surveyors, we are not against energy performance certificates per se. Indeed, we see room for them in a properly thought-through standalone energy policy, but not as one of the few elements of a home information pack. Those elements are indeed few, as the Government, as well as throwing out the mandatory home condition report, made it clear earlier this year that local authority searches and leasehold information would not now need to be included in the home information pack at the outset. My party has offered over and again to work with the Government, if they so wish, to produce a serious and effective energy policy for fairer and more effective use of energy performance certificates in accordance with the EU directive.
Perhaps I should remind noble Lords of the real effect of home information packs, even without the energy performance certificate. Buying a house will not be quicker; it will be slower. Slow progress in preparation and the exclusion of the home condition report have seen to that. Home information packs will amount to reams of red tape with no return. The regulations are a poor imitation of where this all started. Despite what the Government hope, valuations and surveys will still be needed, and there is no guarantee that home information packs will provide adequate searches, if they provide searches at all. Indeed, two-thirds of lawyers have said that they would advise clients to supplement home information packs with their own legal documentation. There are many and intricate criticisms to be levied against the regulations, but we have come to a point where the analysis is unquestionable.
Responses from the industry are staggering. The Law Society has said that home information packs will,
- “make the process more difficult, much more expensive and remove existing transparency from the market place”.
The Royal Institution of Chartered Surveyors has called the Government’s approach to these regulations “cavalier”. In particular, it envisages,
one of the reasons given for the home information packs was to help those people—
5.15 pm
The National Association of Estate Agents told the Merits Committee that home information packs are now purely an administrative burden to the home buying and selling process. The Better Regulation Commission considers that the use of energy performance certificates in the home information packs is gold-plating the EU directive, which will require energy ratings for properties for sale and rent by 2010.
I am baffled that unanimous opposition from the industry and the strictures of the Merits Committee have apparently fallen on deaf ears about the value of this whole process. I urge the Government to take the proper course of action, to take account of the 18th report of the Merits of Statutory Instruments Committee, to wait for the completion of the pilot schemes and the reports from them and, most importantly, to give full and adequate consideration to the representations of all the people who gave evidence to the Merits Committee who were so wholeheartedly against this whole process.
The Government have no defence for these measures now and will have no defence for them in August. It is irrefutable that they will freeze the housing market at a time when it needs liberation. Whether these regulations are delayed or not, this miserable pack will contain only an energy performance certificate, if you can get one; the title deeds of the property, which the owner should have anyway; a sales statement; and the pack index. All that will cost several hundred pounds of the seller’s money, which will almost inevitably be added to the cost of the property, so it will be the buyer’s money. And all for what? Valuations and surveys will still be needed. There is no guarantee that home information packs will provide timely or adequate searches. Two-thirds of lawyers have said that they would advise clients to supplement home information packs with their own legal documentation, which will be another expense.
It is my sincere hope that the Minister will accept the reasonable tones of this Motion and will, once and for all, bury the plans for a proposal that is hurtling towards failure. All along this House has been right about home information packs—when it voted against them in 2004, when it warned over the regulations last year and when, in the brilliant report from the noble Lord, Lord Filkin, the Merits Committee shredded the idea. Is it not high time that the Government listened to this House, to those in the other place and to those in the housing professions? Would they not be far better served if they did? I beg to move.
Moved, That this House calls on Her Majesty’s Government to revoke the Home Information Pack Regulations 2007 (SI 2007/992), to take account of the report on the regulations by the Merits of Statutory Instruments Committee and not to lay further regulations concerning home information packs until after full consideration by the Government and Parliament of the pilot schemes and of the representations of stakeholders and consumers.—(Baroness Hanham.)
Lord Richard: My Lords, I had hoped to speak before the noble Baroness sat down, but since I am on my feet I shall say two things. I have been looking hard at the terms of the noble Baroness’s Motion on the Order Paper. I also heard the Statement read by my noble friend Lady Andrews. As I understand it, the regulations have been withdrawn. The Government have said that they will reintroduce them to take effect from 1 August. As of this moment, the regulations have ceased to be. They are no more. They have gone. They are not technically in front of the House. In those circumstances, how on earth can the noble Baroness move to revoke regulations which have already gone?
If ever there was a case when the self-regulatory mechanisms of this House may not be appropriate, this is it. Anyone who has been in the other place will know that faced with this procedural situation, there would have been a ruling from the Speaker of the House of Commons that the Motion was out of order. I make the point; I cannot enforce the point; there is no way that one could. But for the life of me, for now to spend two hours or whatever it will be on a Motion to revoke regulations that have ceased to exist is, it seems, even for this House, a waste of time.
Baroness Scott of Needham Market: My Lords, I have some sympathy with the noble Lord who has just spoken. However, here we are and since the only alternative is to take my bat and go home, I prefer to participate in the debate. In fact, there is some merit in doing so because the Government now have an opportunity to pause for breath, take stock, and perhaps think again.
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