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What have been the effects of HIPs so far? With regard to speeding up the process, we have no evidence at all. In fact, we are building up quite a caseload of work imposed by the purchasers’ solicitors, asking for far more details in the searches and not accepting the vendors’ searches. Few buyers read HIPs or even ask for them. In our firm we have not had a single prospective purchaser even asking for a home information pack. I thought I had better widen the range, so I rang a number of estate agents around the country. I have not found one that has said a prospective purchaser has asked for a home information pack. One prospective purchaser asked for an EPC but none for a home information pack.

There has been a reduction in the number of properties coming to the market. Whether this can be blamed entirely on HIPs is debatable and I am not going to make judgment at the moment, but it is sad at a time when we clearly need more housing. There is a reduction in land coming on the market for new build and there is also a reduction in new stock coming on the market. That is going to restrict mobility and changing jobs, and it is going to add to the general economic decline and depression that is beginning to affect us. In the research we have been doing—and I have talked to other agents about this—we have also found that no action is being taken on the EPC. People will look at the EPC but they have got their own ideas for the house. Very little action is being taken as a consequence of having that certificate.



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What are the consequences of these regulations? We come back to something that I have been stressing all the way through our discussions on home information packs and that is first-day marketing. I ask the Minister, please, to think again. In many cases, it is taking well over two weeks to get a home information pack. There are still delays and there are going to continue to be delays. Please do not distort the market any more by withdrawing the ability to market on the first day that one gets the instructions. It is a very important part of how the property market works and is used by so many agents, particularly in the south-east where the market tends to be bigger and stronger than elsewhere. To take that away would be really detrimental, and I mean that. It would be utterly detrimental. I ask the noble Baroness to think again and let us continue to market at day one. I know of no evidence of agents deliberately flouting HIPs, so could she just leave that provision? I again raise the point of my noble friend Lord Dixon-Smith about the results for the pre-implementation trials of HIPs. It is quite wrong that the Government have not published these. It was a pity that the Liberal Democrat Party was taken in by the Government’s promises on pre-implementation trials but the results should have been published by now.

Let me quickly move on to the leasehold market. The plans for this are vague and the regulatory impact assessment is based on assumptions about consumer behaviour rather than evidence. One particular concern is that the impact assessment fails to take into consideration the carbon cost of preparing an EPC. Will a new EPC be required with every lease? If so, how does that comply with the rules from Brussels that tell us that an EPC is valid for 10 years? If you have to have an EPC only every 10 years, the letting market is being treated differently to the sales market. That leads to all sorts of further complications. What the Government still have not addressed with regard to letting is the problem of getting information out of managing agents. As far as the regulations are concerned, all one now needs to produce is the lease, but as from 1 June one is going to have to produce all the details and we are going to be back in the hands of managing agents who have no incentive at all to provide that information to vendors. That is going to mean a further delay in bringing property to the market. I hope the Minister will think on that again.

Lord Graham of Edmonton: My Lords, listening to the noble Lord, Lord Dixon-Smith, and the noble Earl, Lord Caithness, it seems to me that there has been a continuous and sustained undermining by people with vested professional interests who see HIPs as an unwelcome intrusion in their hitherto unchallenged stranglehold over both buyers and sellers in the domestic housing market. They resent the fact that the consumer is getting a better deal via HIPs. This is a small part of the major drive by the Government both to improve the buying and selling of houses and to stimulate the housing market.

I do not take kindly to people who are given evidence from the department and stand up here and ignore it in their debate. Last December, I wrote to the department

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and asked for an update on the HIPs saga. I was told by the department that an announcement which addressed the points was going to be made, and I got a copy of it. That information—which is public information and I cannot believe that the noble Lord, Lord Dixon-Smith, who is very good at his homework, is not in possession of it—answers a number of queries. When we have previously debated this subject, one of the main arguments has been the inaccessibility or unavailability of qualified people to carry out the surveys. I was told in December that 5,794 people are now accredited to provide energy performance certificates. When the figure was 2,000 it was derided, but at that time the figure of 2,000 was adequate. As the programme has been rolled out with more and more properties from four-bedroom down to one-bedroom properties, more and more people are required. But the evidence is that they have not only been found and trained but also accredited as worthy of carrying out these inspections. I cannot understand the point that is being made.

Another point made was about cost. We were told that HIPs would cost the consumer £600. The figures I have from the department show that the cost has been between £300 and £350 over a period of six months. That was the figure that we were given nine months ago, and Members opposite should reflect on the cavalier way in which they are treating the information that is available to them.

8 pm

I am told that HIPs are taking on average seven to 10 days to prepare. Either I can take the shaking of his head by the noble Earl, Lord Caithness, whose professionalism I respect, or I can take the evidence from the department, which must be based on the information that it has. I am told that for the majority of property, drainage and water searches are being delivered within five days. If that is the position, it knocks skew-whiff the evidence that this is somehow a drag on these matters. Energy performance certificates are being prepared on average within two to four days. Let us be reasonable. The noble Earl, Lord Caithness, said that this will not be a panacea. It was never expected to be a panacea; it is a genuine attempt to deal with something that has been more than a niggle, not only for first-time buyers but for others. What was a cosy relationship—one might call it a closed shop—has now been impinged on by this new arrangement.

As far as I am concerned, the consumer—the person who is buying and selling—is king, not the professionals involved. The consumer is very important and needs to be taken into account. I therefore say to the Government that I look to the evidence from the Europe Economics report, to which the noble Lord, Lord Greaves, referred. The report finds no evidence of any impact on transactions or prices, although there is a predicted short-term impact on new listings. You either accept the professional integrity of people who supply the department with evidence of how this is working or you do not. I happen to accept it. I congratulate the Minister, who, as the noble Lord, Lord Greaves, has said, has invested a certain amount of personal endeavour in this matter from the very beginning, and her colleagues on sticking to their guns. The problem that they have sought to solve will not be solved overnight, or even for years,

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but the absence of their measure would have meant a continual nag and niggle for the buying public. I say all power to the Minister and her colleagues and I wish this well. To annul the regulations would not only do nothing at all; it would simply add to problems that exist.

Lord Berkeley: My Lords, I very much welcome the statement made by my noble friend Lord Graham of Edmonton, with which I entirely agree. I felt that the noble Lord, Lord Dixon-Smith, and the noble Earl, Lord Caithness, were the mouthpiece of the Royal Institution of Chartered Surveyors. They did not like it, so the thing should be cancelled. HIPs are being blamed for the downturn in the housing market, based on anecdotal evidence. We were told that the Government need to agree this with the property industry. This is my interpretation. The property industry needs to engage with the Government. My understanding is that the Government tried very hard to engage with the property industry. Negotiations went on for some time, and in the end the property industry said, “We don’t like it”.

My noble friend talked about the consumer. This is where we should start. I am told that having a HIP has stopped quite a few vendors, or so-called vendors, putting their house on the market and simply testing how much they will get for it. If they actually have to spend money on a HIP, they might think twice before doing that, which is not very good for people who want to buy it. The other thing is that if there are three or four people competing to buy a house or a flat, you could end up with three or four surveys of the same house or flat, which is great for the surveying industry but a complete waste of money. The HIP is a way out of this.

Ditto with the energy performance certificates, Yes, people might not want them, surveyors might not want to know about them, and they might not be perfect, but they will provide information to people who can then take action or not. I suggest that, as the price of gas, electricity and everything goes up, more and more purchasers, when taking the decision whether to buy, will welcome them as providing information so that they can decide whether they will buy a place, whether it needs more insulation and how much it will cost.

The noble Lord, Lord Dixon-Smith, seemed to like the idea of the energy performance certificates, but did not want them to be part of the home improvement pack. I do not know how one could become obligatory without the other.

The Earl of Caithness: My Lords, I wish it was a home improvement pack. It is only a home information pack.

Lord Berkeley: My Lords, I am very sorry. I simply reflect on the Motion tonight. Basically, it would throw the baby out with the bathwater. Yes, there have been problems, but they are largely solved, in my opinion. Are we really going to accept a Motion on behalf of one professional organisation? I am a member the Institution of Civil Engineers. It certainly does not go around praying like this against what I think is a

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very good regulation on the basis that, “We don’t like it, therefore the Government should not push it forward”. I look forward to hearing the Minister’s response.

Lord Elystan-Morgan: My Lords, I apologise for the fact that I have been in Grand Committee on the Children and Young Persons Bill and have therefore missed a substantial part of this debate. I believe that I have made the general salient points on earlier occasions. If the regulations are to be judged on the basis of whether the Government have produced a panacea for the massive problem that existed—the gap between the agreement, or the meeting of the minds between two parties on a real property sale, and the exchange of a concluded contract—the answer must clearly be no. They have not done so. Nor will they, and nor will any other Government anywhere in the world, within the system of English law. They have tried hard. Their efforts go back some 10 years, and in so far as the home information pack and the energy performance certificate are concerned, they have tried honourably and properly to bring about some amelioration of the problem between purchaser and vendor. They have also brought about some amelioration of the environmental problems that this generation must face.

Baroness Andrews: My Lords, the last time we debated HIPs, I began by saying how grateful I was for the opportunity to tell the House what progress we have been making. That was greeted by hollow laughter around the Chamber, but I can honestly say this evening that I am grateful for the opportunity that the noble Lord, Lord Dixon-Smith, has created. We have a good story to tell and I want to bring the House up to date and to welcome members of a new cast. It is nice to see the noble Lord, Lord Greaves, on the Front Bench—I am grateful for his kind words—and the noble Lord, Lord Dixon-Smith. I am also grateful for the support of my own Back-Benchers and for the welcome of other noble Lords, including the noble Lord, Lord Elystan-Morgan.

We have, over the past 18 months to two years, had an extended debate on home information packs. It has sometimes not been easy for the Government, but we have listened closely to what has been said. Noble Lords will know the unfolding narrative. We debated HIPs on a number of occasions last year, and noble Lords rightly asked us to keep their introduction and operation under close review. We have done just that. We particularly took into account the number of energy inspectors and how HIPs have been operating in the market. I will address some of those issues a little later.

I shall give a little chronology and say where we are. HIPs started to be rolled out on 1 August 2007, when we rolled them out to properties with four or more bedrooms. That was closely followed by the roll-out to properties with three bedrooms. On 14 December, we rolled them out to the remaining sizes of property, thus completing the process.

Over the past months, as HIPs have been introduced, we have been conscious at each stage of the need to take account of the responses of stakeholders. On the last occasion we debated HIPs, my noble friend asked

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specifically that the dialogue with stakeholders should be kept open, especially while the scheme is being implemented. We have done just that, and indeed the very sensible transitional measures we are now bringing forward are informed by and reflect what stakeholders have said about how to improve the experience for the consumer and the industry operating in the marketplace.

The measures do two things. They further extend the temporary first day marketing period until 1 June 2008 and remove the requirement to obtain leasehold documents except the lease itself until the same date. During this period, we have commissioned further work to assess how leasehold documents can be most effectively provided. I shall come back to that point in the light of what has been said by the noble Earl, Lord Caithness. We believe that these measures will help consumers as HIPs continue to bed in.

The first measure means that for the next five months, until June, anyone looking to sell their home can do so immediately, provided that they have commissioned a home information pack and they expect it to arrive within 28 days. Why did we extend the transitional arrangement? We did so because of a later than expected commencement of the final stages of HIPs and in light of the need to produce guidance for local authorities dealing with access to and charging for search information. I can tell the House that the access and search guidance will be published this Friday, which will be helpful to everyone involved.

Of course there have been unexpected changes in the market, and I shall say more about that later, but we also received strong representations from stakeholders who have emphasised that an extension would greatly assist our joint objective of a smooth implementation. We have listened to what they had to say. We believe that this extra time benefits buyers, sellers, estate agents and solicitors as HIPs bed in and become part of the familiar landscape of buying and selling.

The second decision, to remove the requirement to provide leasehold information other than the lease until June, was also driven by what the industry told us would help HIPs to be delivered smoothly and effectively. We had previously made changes to allow 28 days for the provision of leasehold documents, and that was based on earlier evidence from the area trials. But let me say that it has never been the case that we have been waiting for a final, cliffhanging result from those area trials. We have tried to use the information coming in to us over the past months to inform what we can as we change the processes, and thus the leasehold documents were given the extended period of 28 days.

However, uncertainty remains in the ability of the system to cope with the requirement for additional leasehold information upfront—the sort of leasehold information set out in Schedule 5 to the original regulations. It became apparent that more information on the leasehold system was necessary if we were going to make it a more useful process. Early feedback from the industry showed us that while the lease could be produced at low cost without too much difficulty,

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providing additional documents containing information about, for example, major works on the property was more likely to cause delays and hold up production of the packs. However, we have turned this into an opportunity. Having discovered that—and to be frank, we were working on the basis of anecdotal evidence because there were virtually no systematic accounts in the field about this—we have taken the opportunity to establish not just how we can overcome the problem, but what else we can do to provide leasehold information in other ways. To that end, we have commissioned Ted Beardsall, deputy chief executive of the Land Registry, who is a member of our Home Buying and Selling Stakeholder Panel—which I am sure noble Lords will be delighted to know exists—to advise us on what else can be done to improve the provision of leasehold information alongside further consideration of the search process. So this amendment allows time for that work to be undertaken and to inform the way that leasehold information is included in the pack. That is, I think, a very prudent step.

8.15 pm

Over the past six months we have been looking at a sensible, pragmatic and responsive process. What has happened is that between 1 August 2007 and 10 January 2008, we have seen 260,740 EPCs and 188,899 HIPs launched. I think that that is a very creditable result. The difference between the two figures is simply that in the beginning, because we were conscious that we had energy inspectors without work, local authorities got them to do EPCs for some council social housing.

The noble Lord, Lord Dixon-Smith, who I know is very committed to the energy and carbon reduction agenda, asked why we cannot go faster. From 1 October 2008, EPCs will be required, in addition to all residential property sales, for private and social rented properties upon a change of tenancy; and commencing 6 April this year, for the sale, lease and construction of commercial property. DEAs who already have their core skills will have the option of acquiring the extra skills needed to carry out non-domestic EPC work if they wish to do so. We are looking at an expansion of the volume of work into these other areas.

I am afraid that I cannot answer the question raised by the noble Earl, Lord Caithness, about leasehold in relation to EPCs, but I am happy to make a commitment to write to him. We will discuss it in the department.

We know that the pragmatic approach has worked, not least because of our own monitoring, which is done in many different ways from regional monitoring to spot checks with estate agents at the local level. Information is coming to us from all directions. The sort of thing we have noted as it comes to the office is as follows; I quote from estate agent Tim Barton at Dreweatt Neate:



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That is exactly the sort of thing that we discussed in the abstract when trying to anticipate problems which can and do frustrate sales, generating much wastage in the system. Conveyancer Lisa Shenton of Irwin Mitchell said:

That underlines how we are being asked for clarity and certainty all the time.

Obviously I have to address the comments of the Merits Committee. The noble Lord pointed out that there are still divergent views on HIPs, and the Merits Committee has rightly pointed to them. But I have to say that there is now far more understanding of and confidence in HIPs and the process around them than there was the last time we debated this issue. It is a measure of the fact that they are becoming a familiar part of the landscape and are bedding in.

Let me take this opportunity to address the issue raised by the area trials, because again it is something that the Merits Committee referred to. It is not true that the area trials have not been used to inform the development of HIPs, and I have to take issue with the noble Lord because it is not a question of not having dared to come forward with the evidence. We have always said that we will use the evidence wherever possible. But it was a measure of the protracted nature of the system that the average time needed for a home sale is over six months, and sometimes much longer. It was not until the end of last year that we had gathered a sufficient set of transactions to study in order to make proper judgments about it. Those are now with the independent researchers who are compiling the evidence. Believe me, we will bring it forward as soon as possible.

The noble Earl, Lord Caithness, is quite right: one of the issues we face is that we have discovered that many buyers are not seeing HIPs, and that this may come out at the area trials as well. There is no justification for it and I do not think it should be up to the buyer to have to prod and push and search for their HIP; it is for the estate agent to do so. He should be saying, “Here is the HIP. This is what we may be able to make use of because it contains important and valuable information”. I say that particularly because the regulations provide buyers with a legal right to rely on the information provided in the pack. We are therefore discussing with the National Association of Estate Agents what more can be done to increase awareness of the energy certificate. We have also responded to that discovery by committing to a systematic communications strategy, which is aimed at all the people who should be making sure that HIPs are at the front of their mind, because of the valuable information that they bring forward. We want to start that campaign quickly; its essential message will be, “If you’re buying a home, make sure that you see the information pack”.


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