Previous Section Back to Table of Contents Lords Hansard Home Page

On Question, amendment agreed to.

Clause 275, as amended, agreed to.

Clause 276 [Consequential amendments]:

Baroness Andrews moved Amendment No. 112ZB:

The noble Baroness said: These are consequential amendments to other legislation. I do not intend to speak to them in detail, but I shall outline their main effects. They fall into three groups. The first group ensures that the regulator is included in various legislation, including the Public Records Act, the Freedom of

18 Jun 2008 : Column GC436

Information Act and the Race Relations Act, applying to all NDPBs. The second group makes consequential amendments to housing legislation, particularly the Housing Associations Act 1985, to update references to the Housing Corporation in relation to the regulator. Those amendments make no policy changes, but simply ensure that existing systems and processes continue to function properly under the new regime. The third group makes consequential amendments to the Audit Commission Act 1998 to reflect the new role of the regulator in commissioning and specifying inspections of registered providers. I beg to move.

On Question, amendment agreed to.

Clause 276, as amended, agreed to.

Clause 277 agreed to.

Lord Dixon-Smith moved Amendment No. 112ZC:

The noble Lord said: Home information packs were introduced under the Government’s Housing Act 2004 and came into operation last autumn. The Government had run pilot schemes, but they were somewhat reluctant to publish the results. We finally got those results published in March this year. The main findings of that research, undertaken by Ipsos MORI, on the area trials was not very encouraging on the effect of the information packs. After sales, eight out of 10 sellers did not think that the HIP had helped to sell the property; more than 70 per cent of sellers did not think that HIPs made the selling process more efficient; 55 per cent of buyers did not think that the HIP had speeded up the homebuying process; and one-third of the sellers said that it was taking too long—more than three weeks—to get their home information pack. That is hardly an enviable record and I suspect that if that information had been published before the information packs were introduced, there might have been considerably more hesitation about the introduction.

Following the introduction of HIPs, the National Association of Estate Agents conducted a survey of its members in August 2007 to see what was happening. Interestingly, but perhaps unsurprisingly, the number of four-bedroom properties, which was the first category of home to be affected, on the market was dramatically reduced: 63 per cent of agents reported decreases in the number of larger properties on the books. That was greater than the normal reduction at that time of year. On average, agents reported drops of 37 per cent. Homeowners staying out of the market to avoid home information packs was cited as the main reason for the decrease.That survey revealed that the average price being paid for a home information pack was around the £350 mark. Although the information in the pack

18 Jun 2008 : Column GC437

is somewhat circumscribed compared to what was originally intended, the cost has not dropped commensurately.

The killer blow has occurred with the report published only a couple of days ago by Sir Bryan Carsberg who, in July last year, was commissioned by the Royal Institute of Chartered Surveyors, the National Association of Estate Agents and the Association of Residential Letting Agents to carry out a review of the residential property sector. His specific comments on the home information pack were that it has been watered down and now appears to consist of very little information, yet there has been no commensurate reduction in the price of the document. He concluded that the usefulness of the pack is demonstrated by the fact that few buyers have shown any interest in it, and a substantial number of conveyancers ignore its existence and recommission searches on reading instructions from their buying clients. That suggests that the home information pack is not fulfilling the role for which it was intended.

In Sir Bryan’s opinion, the cost of the home information pack seems to be greater than its benefit. He summarised the position by saying that,

He raised a more fundamental objection, saying that consumer well-being, in matters like property transactions, is best secured by operation of the market. The imposition of constraints by central decision makers is not likely to serve consumers well because it cannot take account of consumers’ wishes in the way that the market does. The market is better at producing customer satisfaction than legislation can be.

7.30 pm

His recommendation was that the Government should amend legislation and make home information packs voluntary. That would be the end of home information packs and a clean kill is perhaps better than a slow death by starvation. The Bill gives us an opportunity to make a clean kill. We recognise that we will have to keep the energy performance certificate, which has a useful function. Given that the ultimate requirement is that all homes will require an energy performance certificate, tying it to the home information pack is the slowest possible way of getting it round the housing circuit. Moving home is expensive and stressful—I am in the process of doing so and I declare an interest—but this particular red tape makes it worse, not better; it increases costs without producing a commensurate benefit.

We would not wish to prevent home sellers paying for a home condition report if they genuinely believe it would help, but that should be a matter for them and not for legislation and compulsion. That is the gist of what Sir Bryan Carsberg has been saying. The present regime is unwanted by most people and is unproductive in the market. This is an appropriate time to say goodbye to it. I beg to move.

The Earl of Caithness: We can have nothing but sympathy for the Minister as she gets another battering over these ghastly and hated information packs. She is

18 Jun 2008 : Column GC438

very brave—she puts on a smiling face and says that they are all wonderful and it is all going well—but in reality the truth is very different. I declare an interest as a consultant to an estate agency in London, an interest I have declared on many occasions.

My noble friend Lord Dixon-Smith referred to the Sir Bryan Carsberg report which has recently been published. It confirms what many of us said when the legislation was being rammed through Parliament against better judgment. The result of the HIP legislation has been to delay property coming on to the market in some parts of the country; there is absolutely no doubt about that. I agree that that has not happened as much in central London, but in less expensive areas of the country, where people do not have the same capital value in the house and, in many cases, have less income, the extra cost of a HIP obviously defers property from coming onto the market. That in turn restricts the free flow and operation of the market. I said at the time of the housing boom that that was going to happen.

In times of boom one does not think that things can go bad, but we have seen housing declines in the past and we are facing another one at the moment. Any extra expense such as this will delay property coming on to the market because many people are not prepared to pay for the home information pack. The Minister may reply that many agents are absorbing the cost—which is true in some parts of the country—but the corollary is that they are not negotiating on fees. So what the vendor might win on the swings, he is losing on the roundabouts.

There is clear evidence from all the investigations I have done, and from talking to the various purchasers and vendors that we deal with, that the home information pack is not providing any useful service to either the vendor or the purchaser. There is evidence that it is delaying the whole property procedure, as my noble friend Lord Dixon-Smith said, and it is not actually reducing the costs.

Let us take the question of searches. I remember the Minister trumpeting how nice it was that we were going to get searches up front. A lot of us agents had been doing that before, because it seemed to be a sensible way to market property. In a declining and difficult market, however, property can stay on the books for a long time. Let us say that you are a solicitor acting for a purchaser. If the search is more than three months old, you will require the purchaser to get their own new search. The purchaser’s solicitor has a liability and a duty of care towards the lender, and no bank or building society is going to lend unless the searches are more recent than three months. So the great idea that it will be a wonderful thing to get searches up front is not proving at all effective because more and more, as the housing market becomes more difficult, the purchasers are having to fund their own searches, just as they always did in the past.

If I were to summarise the reaction from all the vendors and purchasers, it would be, “This is just another government tax on property. It’s one of the things we have to put up with, but it’s really not helping the procedure at all”.

18 Jun 2008 : Column GC439

Baroness Andrews: I did not think I would get away without having a debate on HIPs in the course of a Housing Bill. I am not surprised, but if the Committee will forgive me, I will not rehearse the full story of the introduction and management of HIPs over the past year, because it would take a long time. What I will say is very simple. There can be no doubt that the current home-buying and selling process needed to change. I think we would all agree on that. It is protracted, confusing, opaque and stressful, and the biggest losers have been first-time buyers, who are already at a disadvantage.

Over the past year we have seen HIPs bed down. Around 700,000 HIPs have been produced along with energy performance certificates. We have seen the market adapt. Consumers are beginning to see the benefits. There has been a reduction in the cost of local property searches by an average of £30. We said that HIPs would stimulate and help the market, and they have.

I hear what the noble Earl, Lord Caithness, says about the way they are affecting the market. We have commissioned substantial research on this, and we have no such evidence. Given what else is happening in the housing market in terms of ability to borrow and buy, I would be very surprised if HIPs made any difference, but I will send the noble Earl the current research we have.

To maintain confidence among all those involved and to make the benefits of HIPs evident and useful, we should ensure that we build on what is working. That is what we intend to do, and we are doing it with the industry. We have a much closer and better relationship with stakeholders, and we are working with consumers. We are doing our best to make a real benefit of this. We recognise from the area trials and our early operations that more needs to be done to facilitate and support the take-up, and we are working with the industry to ensure that consumers can benefit fully from HIPs.

We are reflecting on the recommendations in the Carsberg report, but in the mean time we will continue to work with the industry to improve information for the consumer in this process. Given where we are with the energy companies, we are also making the most of EPCs. The committee will know that we are phasing in EPCs across all sectors of buildings. All homes marketed for sale in England and Wales since December 2007 have required an EPC to be available to prospective buyers.

HIPs are an important issue that we have addressed many times in this House. Frankly, however, I cannot add a great deal to what I have just said. I hope the Committee will understand that I listen to noble Lords, and I appreciate the opportunity once again to update the Committee on where we are.

Lord Dixon-Smith: I sometimes wonder what it will take to get the Government to admit that perhaps they were wrong. I think that it will happen only when they hit the ground at the bottom of the cliff on a date in the future that we cannot predict. I am not particularly surprised at the noble Baroness’s response. I am marginally pleased that she is concerned about the Carsberg report, given the cautious nature in which reports of that kind are couched. I regard the wording as

18 Jun 2008 : Column GC440

considerably, if not completely, damning. Therefore, I think that there is an issue here that we will need to pursue further but, for now, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 278 and 279 agreed to.

Clause 280 [Authorised assessors]:

The Earl of Caithness moved Amendment No. 112A:

The noble Earl said: We move on to Part 3 proper of the Bill and the subject of certificates for new homes. The mandatory rating of homes against the code for sustainable homes is already being introduced via secondary legislation relating to the home information packs, which we have just discussed and which, sadly, will continue for a bit longer. Although homes have to be rated, they do not have to be assessed. Where an assessment does not occur, the new home receives a zero rating. The Bill allows for a more comprehensive legislative framework for these arrangements. It also allows for the code to be extended to existing properties and non-residential properties.

Under the current arrangements for accreditation schemes, the Building Research Establishment trust, a non-governmental body, is given the sole right to sub-license accreditation schemes for assessors of homes against the code. It is granted a licence to provide accreditation of code assessors itself. In effect, therefore, the BRE has a monopolistic position in regard to the accreditation of code assessors. This resulted from the arrangements made by the Department for Communities and Local Government to utilise the intellectual property of the BRE within the technical requirements of the code.

My amendment would remove any potential for the furthering of the monopolistic position of a single body, the BRE, in regard to the accreditation of assessors for the code for sustainable homes. However, since tabling the amendment, I have had a very nice letter from the Minister saying that she understands the point that I made, and for that I am extremely grateful. However, perhaps I may ask her the following questions. How long is the current arrangement with the BRE? Are the Government going to publish the contract with the BRE? What further safeguards are there that this will not become a monopolistic position in the future? Finally, what is the current level of fees that the BRE charges? There has been considerable complaint about the level of fees because the BRE is in this very strong position. Indeed, an article in Building magazine, which I am sure the Minister has read, referred to this very problem. I am sure that it has been on her desk and that she has read it with great interest.

There is one point in the Minister’s letter that I must raise because she needs to kick her department very hard. On the last amendment, she said that she has a better relationship with the stakeholders, yet in her letter she refers to the “Royal Institute of Chartered Surveyors”. I belong to an institution, not an institute. I beg to move.

18 Jun 2008 : Column GC441

Lord Bassam of Brighton: Obviously we welcome the competitive sentiment behind the noble Earl’s amendment, but ultimately we disagree and part company with him in what it seeks to achieve.

For the benefit of noble Lords who are not familiar with the area, I ought to begin by explaining what an accreditation scheme is. It provides for assessor certification by the training and licensing of people who will carry out assessments. We currently have schemes in place through contractual arrangements but in due course we will replace them with schemes set up under the powers conferred by the Bill. We are committed to ensuring that there are transparent and open processes for the selection of any accreditation scheme or schemes and for the establishment of a competitive market for accreditation schemes and assessor services. However, as I am sure the noble Earl will agree, it would be highly unusual to have this level of detail set out in primary legislation. It could fetter the Secretary of State in acting in the best interests of the public.

More pragmatically, we are also considering a number of different models for setting up accreditation schemes and may want to adopt the approach used in energy assessor schemes for issuing energy performance certificates. The approach adopted in this instance does not limit the number of such schemes and therefore there is no competition between organisations to set up accreditation schemes. Such competition as there is will be in the marketplace for accreditation services, to the ultimate benefit of the consumer. Accordingly, we believe that the amendment, well intentioned as it is, would not have the desired effect of ensuring that the Secretary of State’s discretion is exercised in the public interest. Moreover, it would be undesirable to stipulate how the Secretary of State is to exercise discretion in this matter. I can assure the Committee that the principles of transparency and openness, and the harnessing of competition for the public good will remain the basis for any selection process when it is taken forward. As a result, the amendment is not the right way to proceed. Having accepted our commitment to introducing transparent and open selection processes, and to promoting competition, I hope the noble Earl will feel able to withdraw his amendment.

He asked for some precise information. With regard to the publication of the contract, it is in the public domain and I shall send him a copy. The contract expires in 2013. I apologise for getting the institution name wrong but these things do happen, as I am sure they did when the noble Earl was in government. As to the value of the contract, I am more than happy to write to the noble Earl about that.

The Earl of Caithness: I am grateful to the Minister for his reply. He seems to agree that it is in the interests of the environment, home buyers and the housing industry that there should be competition for both the provision of assessors and their accreditation. It is a pity that we have to wait five years but it is perhaps better to continue with the Bill than to upset the process in the mean time because the Government seem to have their heart in the right place on this issue. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

18 Jun 2008 : Column GC442

[Amendment No. 112B had been withdrawn from the Marshalled List.]

Clause 280 agreed to.

Next Section Back to Table of Contents Lords Hansard Home Page