Clause 137 — Duty to have a home information pack

Orders of the Day — Housing Bill – in the House of Commons at 6:49 pm on 8th November 2004.

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Votes in this debate

Lords amendment: No. 128.

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister

I beg to move, That this House
disagrees with the Lords in the said amendment.

Photo of Sylvia Heal Sylvia Heal Deputy Speaker

With this we may discuss Lords amendments Nos. 130, 135, 137, 143 and 144 and the Government motions to disagree thereto.

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister

It is a matter of great regret to me that the issue of home information packs has remained so contentious between the parties, especially when there has been such broad consensus about the Bill and we have been able to work so well together. That applies not least to work between the Government and the Liberal Democrats in improving the Bill, especially the provisions on empty homes and tenancy deposits.

The amendments would replace a compulsory home information pack scheme with a voluntary one. The notion of voluntarism is seductive and there was much talk in the other place of the reforms being an unjustified restriction on people's right to buy and sell homes as they please in a market that functions perfectly well as it is. However, those of us who inhabit the real world know that that is not the case. The home buying and selling process does not function properly. Hundreds of thousands of people every year are put through the wringer because of the inadequacies of the current system. Hundreds of millions of pounds are wasted on transactions that get nowhere. That is money that ordinary, hard-working families can ill afford to lose.

Three out of 10 sales fall through between offer acceptance and exchange of contracts and more than half of all sales experience some sort of problem during that period. It is no wonder that, whenever they are asked, people say that they are hugely dissatisfied with the current system. Nine out of 10 people said that in one independent survey last year. That is hardly a ringing endorsement for a system that is supposed to work well.

I do not doubt that some people are doing very nicely out of the system. Every cloud has a silver lining and the abortive costs to consumers from all those failed transactions represent a nice little earner for others. Needless to say, they are not the people for whom the reforms are designed, although many in the industry welcome what we are doing and are keen to get on with it. For them, the reforms are overdue and liberating, enabling them to offer the sort of service that their customers want.

p

In the real world; the bigest problem is the refusal of solicitors to accept that a bank or building society ; having agreed to a mortgage will not pay the money.
This means that the date (and time) of taking possession depends on some layer's lunchtime.
Compare this pathetic way of doing business with buying a car on loan ! And you can't drive a house away; respray it & change the number plates.
The sellers pack fixes a minor problem; it MAY dissuade the "let's see what my house is worth" false offer of sale..

Submitted by pete marrable Read 1 more annotation

Photo of David Kidney David Kidney Labour, Stafford

Will my right hon. Friend give way?

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister

Of course I shall give way to my guru on home information packs and so much else.

Photo of David Kidney David Kidney Labour, Stafford

Surely my right hon. Friend does not suggest that the lawyers and estate agents who object to the home information packs are the ones who benefit from an inefficient system.

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister

As I was wont to say in my previous incarnation as deputy Chief Whip, my hon. Friend may say that but I could not possibly comment.

Opponents of compulsion should recognise that relying on voluntarism would mean things staying much as they are. That is because a voluntary HIP system will not achieve the universal acceptance needed to make it work properly. The amendments are really about removing part 5 from the Bill, thus leaving the housing market unreformed and damaging not only to individual buyers and sellers, but to the national economy. Too many people are disadvantaged for us to ignore the problems and settle for the status quo. We are determined to offer consumers a genuine prospect of change. That cannot be done through relying on voluntarism and good will alone.

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister

I shall, but I have much to say and relatively little time in which to say it. I also want to allow other hon. Members to speak.

Photo of Peter Bottomley Peter Bottomley Conservative, Worthing West

The Minister is trying to reverse a Lords amendment and get the House's approval for that and I am grateful to him for allowing me to ask a question. If I approach someone who is not planning to sell a home and ask them whether they will sell it to me, is it lawful for them to do that without providing a home information pack?

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister

The answer to that is an unqualified yes.

Of course, there are a few agents who have sought to progress on the basis that I have described. They report none of the dire consequences predicted by the Opposition, although they are frustrated that others can reap the benefit of their efforts without having to do very much. In a buoyant housing market, that is not surprising. In a downturn, they might need to work harder, but unless they pull in the same direction, more effort can be ineffective.

All markets work most efficiently when all the parties are well informed, and the housing market is no exception. Nobody disputes that. The home information pack will deliver that for home buyers and sellers. We do not need a Bill just to have a voluntary system of home information packs. Sellers and estate agents are free to provide them now if that is what they want. However, despite the evidence that they can greatly reduce the chances of transaction failure, they have not gained a sizeable foothold in the home buying and selling process. There are very good reasons for that.

The main problem with a voluntary scheme is chains. If any link in the chain is without a pack, the whole chain would suffer if that were to be the cause of problems. If packs are not made compulsory, one individual who decides to opt out can wreck the process for everyone else. We also know that estate agents in the high street are fiercely competitive, and without compulsion, most of them will be tempted to offer the easy option. Without the level playing field that a compulsory scheme will bring about, most estate agents, even those sympathetic to HIPs would look at what their competitors were doing and would not act for the greater good of consumers if they felt that it would put them at a commercial disadvantage.

There have been accusations that the introduction of compulsory HIPs will mean a huge reduction in the number of properties going to the market and that that will result in massive house price inflation. That would be scary if it were true, but it is just the usual scaremongering. The introduction of similar changes in Denmark and New South Wales had no effect on the market. That view is also supported by research commissioned by the UK's largest estate agency group—the Countrywide group—which suggested that there would be little impact on the number of homes sold. The Countrywide study found that, even if sellers had to pay up front for the pack, 87 per cent. would still offer their home for sale. It concluded that the pack would take out of the market only the people who were not serious about selling anyway.

Photo of Mr Simon Thomas Mr Simon Thomas Chief Whip, Spokesperson (Agriculture; Culture; Environment; Heritage; International Development; Sustainable Energy; Transport)

According to my understanding of the proposals, the Minister will decide at what stage to commence this part of the Bill. Will he tell us how he would do that, because that decision would have an impact on the market? Will he introduce the provision throughout the United Kingdom overnight, or will it be piloted in certain areas—perhaps in Wales; why not?—and what ideas does he have about ensuring that it will actually work?

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister

The hon. Gentleman has been a good supporter of this proposal, and he is articulating a reasonable concern about its implementation. After all, there are few things in life more important than a person's home and their acquisition of it. I can give him an absolute assurance that we shall not bring this system in until we are absolutely clear that it is going to work. We envisage various kinds of dry run to ensure that it is working properly and I hope to talk about that in due course, in a way that I hope he will find helpful.

I was saying that there had been accusations that the introduction of compulsory HIPs would mean a huge reduction in the number of properties going to the market, and that the evidence was that there would be no such reduction. Indeed, I pray in aid on this matter no less a figure than Kate Barker of the Bank of England's Monetary Policy Committee, who has spoken about the problems of the current home buying and selling system and about how HIPs will help. In her recent report on housing, she said:

"An efficient housing market depends on buyers and sellers having available to them accurate and comprehensive information about individual properties as early as possible. This is often not the case at present, and as a result many transactions fail or take longer than necessary."

She went on to say that HIPs would address that market failure and should reduce the risk of transaction failure and speed up the buying and selling process, provided that they were properly researched with the industry and consumers. We certainly intend to do that. She finished by saying of HIPs:

"I welcome the greater transparency that they are expected to bring, and would not anticipate that there will be an impact on house prices as a result of their introduction."

Photo of John Butterfill John Butterfill Conservative, Bournemouth West 7:15 pm, 8th November 2004

Will the Minister tell me what particular expertise Kate Barker has in the home buying and selling markets?

Photo of John Butterfill John Butterfill Conservative, Bournemouth West

She is, but I do not know whether she has any great expertise in this area.

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister

If the hon. Gentleman had read Kate Barker's report on housing—he might well have done so—which was commissioned jointly by my Department and the Treasury, he could not have helped being impressed by her deep understanding, the great extent of her expertise and the enormous trouble that she took to analyse the housing market and to get these things right. I do not know which authority the hon. Gentleman wants to promote in opposition to Kate Barker but, frankly, I am content to rest on her judgment that this system would not impact on house prices in any negative sense, and that it would make the housing market more efficient.

The provision of more and better information cannot help but improve the functioning of the housing market, although I do not pretend that it will solve every problem. We accept that our proposals are not a panacea. However, every examination of these problems by Governments over the past 30 years—and there have been a number, in case anyone is labouring under the delusion that these are new problems—has concluded that this would be the most helpful change. My noble Friend Lord Rooker listed some of those conclusions recently in another place. There was the Law Commission report on subject-to-contract agreements, which was laid before Parliament as long ago as January 1975. Then there was the first report of the Conveyancing committee in 1984, better known as the Farrand report. The previous Conservative Government's report, "Survey of options for simplifying the house purchase process", published in 1993—I presume under the auspices of Mr. Gummer, who is in his place—responded to concerns about inefficiencies in the market and concluded that sellers should provide property details at the outset and that conveyancers could reduce the uncertainties of chains by encouraging a greater disclosure of information.

None of this is new. The problems are not new and the solutions are not new. What is new is that we now have a Government who have the courage to do something about it, even if that means upsetting a few interests along the way. While I am on the subject of interests, let me draw to the attention of the House a couple of interests that have recently come out in support of the Government's proposals. As a Labour man, I have been reading The Guardian devotedly for more than 40 years, although nowadays, opening my copy often feels like a somewhat masochistic exercise. To my delight, however, I saw that the editorial in the edition of Saturday 6 November contained a most enthusiastic expression of opinion in support of the Government's proposals on home information packs. And, lo and behold, in The Times of Friday 5 November, the excellent Susan Emmett, its deputy property editor also wrote enthusiastically about the ending of what she described as "this tortuous process" of home sale and purchase. If I had more time, I should certainly draw these serious observations to the attention of the House. I shall spare hon. Members that experience now, although I might get the opportunity to do it later. I will simply say that when the muesli and sandals brigade lines up with "The Thunderer" in joint support of the Government's proposals, those proposals must be taken very seriously.

Unlike the Opposition, we have a coherent view of what is needed to create a sustainable housing market. Apart from making an effort to balance the supply and demand for housing responsibly, we want to ensure that the existing stock is maintained and kept in good repair for future generations. We want to see people taking responsibility for their stewardship of the housing stock, including its upkeep and energy efficiency. They can do that only if they have the necessary information at the right time and in the right place.

Photo of John Gummer John Gummer Conservative, Suffolk Coastal

The Minister mentions energy efficiency. I wonder why. My concern is that the Secretary of State is taking powers whereby he "may" do this, that or the other. Why did he not state categorically from the outset that he would institute a mechanism whereby the proper energy efficiency rating of every house could be presented, enabling people to make a comparison?

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister

The right hon. Gentleman entices me on to the next phase of my exposition of the virtues of our proposals, but I am surprised that he, as a good European, is unaware of European Union directive 2002/91/EC, which makes such an energy efficiency report mandatory.

Photo of John Gummer John Gummer Conservative, Suffolk Coastal

I was inviting the Minister to explain why the Secretary of State did not take credit for this, as is his wont, by getting it in the original documentation.

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister

The right hon. Gentleman will have to put that down to my innate modesty. After all, he will acknowledge that I have not attempted to replace the concept of the Gummer exception with the Hill exception. This is a rather arcane exchange, albeit one that we have both enjoyed.

The Opposition have failed to make any link between their laudable demands for more and better use of the existing stock in creating sustainable communities, including higher energy and other standards, and the crucial role that HIPs will play in achieving those ends.

As I was saying to the right hon. Member for Suffolk, Coastal, we shall have compulsory energy surveys when properties are sold; the EU directive to which I alluded requires that. It is entirely consistent with the primary need to use energy supplies more efficiently and is something that the Opposition fully support, but they clearly have difficulties with the means.

Let me take the House on a tour of some questions that need to be addressed to meet the energy certification requirement and the information that the inspector carrying out the survey will need to gather as he or she goes around a property to complete the energy report. The questions include: is it a flat or a semi-detached, a mid-terrace or detached house? When was the property built? Are there any extensions or modifications, and when were they made? What are the walls in the main property or any extension constructed from? Is there any evidence that the walls have been modified, possibly with cavity fill insulation or external insulating render? What is the floor construction? What types of window and glazing are installed? What is the roof construction? Is there a porch or a conservatory or a basement; if so, how big is it, and can it be closed off from the main part of the house and does it have a separate heating system?

For each storey of the property, the inspector needs to measure the floor area, the room height and the length of wall through which heat can escape either to the outside world or into unheated spaces such as a garage, and the area of windows, doors and rooflights.

I put it to the House that this is already starting to sound like a fairly sophisticated assessment, but the requirement goes much further because the following questions must also be addressed: what type and thickness of insulation is there in any loft space? Is there gas or electricity available in the property or in the street? What ventilation rate can be expected in normal circumstances? What space and water heating systems are installed? What controls are there on those systems?

This is not just a question of, "Is it a gas central heating boiler or not?" Instead, the requirement is to determine whether it is a standard boiler or a combination boiler, and whether it is a condensing boiler; how efficient it is; and whether there is a timer, a room thermostat or thermostatic radiator valves. That assumes that the system in question is a straightforward gas system, but it can get a lot more complicated if it is not and the means of heating is from other fuels or local heaters rather than central heating.

Undertaking an energy efficiency assessment is a skilled task, requiring a qualified individual to look at all the key elements of the property such as walls, floor, roof, glazing, space and water heating, and services—in fact, pretty much every element that we are proposing should be considered in the home condition report.

The time required on site to perform an energy efficiency assessment using the reduced data standard assessment procedure methodology would be an hour to an hour and a half, with a relatively short period for subsequent preparation of the report. That compares with an anticipated two hours on site to undertake a full home condition report, plus up to an additional hour to write up the report.

p

Is it possible that the EU directive is not mentioned for fear of an anti EU backlash?
More unwarranted interferance. Caveat Empator. Why do I get the AA to check a 2nd hand car - Because they are MY agents. He ho; pay for the sellers pack & get your own suvey done too. AND an EU survey as well; wonderful; or should that be "Yes Nanny"

Submitted by pete marrable

Photo of John Butterfill John Butterfill Conservative, Bournemouth West

The Minister is being very generous in giving way, but I am not sure that he fully understands what is likely to be involved in such a report. I speak as a chartered surveyor. To cite an example that occurs frequently, if a building has tile hanging on the exterior, there should be some insulation between it and the plaster walls on the inside—an older property may have lath and plaster—but it is not possible to tell without removing either some tiles from the exterior or some plaster work from the interior whether there is any suitable insulation material between them. That would require considerable work and a labourer on site, and the damage would have to be made good. Even that one element of the report could not be completed in an hour and a half.

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister

It is perfectly clear that the work that has to be carried out for the energy report and inspection is very much akin to that which needs to be carried out for a home condition report. It is, effectively, a medium-level survey. Quite frankly, it is a sight better than the drive-by survey that is so often done by those who carry out surveys and valuations. I accept, of course, that more detailed work is required in some circumstances, but I make the point that we already have a compulsory system of energy assessment, which will require little by way of add-on—in terms of what needs to be looked at or time—to produce a home condition report.

How long would it take to finalise a stand-alone energy report? We think it would take three to five days—the same time as we expect it to take to get a home condition report and, indeed, assemble the whole pack. So, frankly, the Opposition are offering no time savings. This would also scupper the possibility of first day marketing—another Opposition shibboleth—given that the energy survey has to be made available to enable potential buyers to make comparisons with similar properties.

Photo of Edward Davey Edward Davey Shadow Spokesperson (Office of the Deputy Prime Minister), Liberal Democrat Spokesperson (Office of the Deputy Prime Minister)

The Minister has spoken in some detail about what would be in such an energy audit, but will he go to the key point? The directive requires that to be done by the time the property is sold, not at the point of marketing. That is the difference between the parties, I believe. We have no objection to energy audit being compulsory and having to be done before sale—that is what the directive requires—but producing a system under which all has to be done before the house is marketed is the genuine big problem here. It will cause so many difficulties in the housing market.

Photo of Keith Hill Keith Hill Minister of State (Housing and Planning), Office of the Deputy Prime Minister

It seems to me that the hon. Gentleman really is splitting hairs. The fact of the matter is that the work on the energy report has to be done in any circumstances. It has to be done by the point of sale. Why not? What reason is there not to conduct that exercise at the beginning of the process? After all, presumably nobody knows exactly when the point of sale will be. There is absolutely no reason for that work not to be done.

One corollary of the home condition report system is that the period of sale will be considerably reduced because all the information that is required and which takes time to acquire in a normal house sale will be provided up front. So, it seems to me that the hon. Gentleman is not raising a significant reservation.

I am aware that I have spoken for some time, so I want to deal with some issues that have been raised and perhaps come back to offer assurances of the sort that Mr. Thomas is looking for. The question is often raised that this is an unreasonable imposition on the house seller and those involved in the process. An energy report is essential, but how much will that cost? The industry estimates that a free-standing energy survey will cost at least £150, yet for another £150 sellers and buyers could have a full home condition report and thereby help to solve the problem of the 43 per cent. of failed transactions that result from an unfavourable survey. I would say that that is a good deal, and I firmly believe that buyers and sellers would agree if they were told the facts as distinct from the fiction.

I keep reading, and the Opposition keep stating, that these provisions will force every house seller to pay £1,000 for a pack. Never mind that the cost is nearer £650, of which £300 will buy the seller the full condition report, including the energy assessment—and never mind that many of the costs are incurred now. What about the benefits? There will be savings to the buyer from fewer mortgage lenders' valuation inspections—exactly how many fewer we do not yet know, but those are commercial decisions that lenders will take in the light of their confidence in the packs and their own plans.

We should not forget that the market is likely to drive down costs. The price of HIPs will be driven down by competition. Last week, Rightmove, members of whose property portal site make up half the entire estate agency market, announced that it is gearing up to provide at least 500,000 packs a year from 2007. That is not far off a third of the total requirement for packs—and that is from just one company, albeit one backed by the Halifax, Countrywide Assured, Connells and Royal Sun Alliance. We know that other players have similar plans.

A number of independent agents have expressed interest in the Rightmove initiative. Critics of our proposals suggest that small estate agents stand to lose out under HIPs, yet here is an example of an initiative that will provide packs for the whole industry, including small agents.

The House will be aware that I have announced that our aim is to introduce these reforms in January 2007. However, I have also made it plain that the reforms will not be implemented until everything is in place and ready to go. We will, of course, take our lead from the industry on that. In that respect, our proposals for a dry run of the home information pack will help everyone to judge the readiness of the market.

To help to ensure a smooth and successful introduction, the Government intend to facilitate a dry run of the full HIPs scheme on a voluntary basis throughout England and Wales from mid-2006. During the dry run, all the components of the statutory scheme will be available for the industry to test and make ready their systems ahead of the introduction of the compulsory scheme. We regard that as a crucial part of our implementation strategy. With the industry, we will closely monitor the dry run and identify any problem areas. If necessary, any problems will be addressed through regulations before the national scheme commences. The flexibility built into the Bill ensures that that can be done quickly.

It was suggested in the other place that the dry run should include a compulsory element in a designated area. Again, the provisions of the Bill are sufficiently flexible to allow that approach. I am happy to consider that further with the industry.

We have no intention of rushing headlong into this with our blinkers on and without any regard for whether the market is ready and the new system works. There is no basis for that sort of accusation, which has been made on other occasions. We are flexible on the issues that several Members have raised, such as the implications of the new compulsory system for low-value homes and for people who are moving out of home ownership, such as the elderly, who will not gain directly from a HIP prepared on another property. There will be open and frank discussion about such matters before the final shape of the scheme is settled.

The housing market is not functioning properly. Consumers—buyers and sellers—want change. We have said that we will deliver that, and have confirmed it in two general election manifestos. The changes cannot be delivered on the scale that is needed under a voluntary system. Compulsion may be regrettable, but in this case it is necessary.

p

Hang on; do I understand this.

The seller's pack must be done before offering the property ; but the Energy Survey needs only be done in time for completion ?

Doesn't make sense to me.

Drive by surveys are done for valuation; meaningless as far as structure is concerned .

Submitted by pete marrable

Photo of John Hayes John Hayes Shadow Minister (Communities and Local Government) (Housing and Planning) 7:30 pm, 8th November 2004

I have seldom heard a Minister expend so much energy so inefficiently. For half an hour, the Minister for Housing and Planning regaled us with his accounts of the glories of home information packs, without addressing a single argument that had been made persuasively by Liberal Democrat peers—I do not often say that—Cross Benchers and, most notably, Conservatives in the other place. The truth is that home information packs, or sellers packs, as they have become known, are not needed and not wanted.

Let me reciprocate the generosity that the Minister displayed at the beginning of his remarks. It is true that the Bill includes many good proposals, and we discussed some of those at length in Committee, but this proposal is not one of them. Extraordinarily, it is against all advice, and the Opposition parties are united on this, although I demur from including the Welsh nationalists, who, I understand, at least from what Mr. Thomas just signalled, are on the fence.

The other place debated the proposal at great length, and peers of all parties both voted for the amendment and made the case against the Government's position. Despite what the Minister says, there is no widespread demand for sellers packs from buyers and sellers. The only people whom he could cite in support of his contentious—I say that advisedly—proposals were people in New South Wales, people in Denmark and Kate Barker, who was doing the Government's bidding anyway. She was hardly likely to come out and say that they were wrong, when she was commissioned by them to say that they were right. The evidence that the Minister has brought before us is not in any way convincing.

Photo of David Kidney David Kidney Labour, Stafford

Perhaps my right hon. Friend the Minister was therefore remiss in not repeating, as he did in Committee, that the Consumers Association is a strong supporter of the proposal on the grounds of consumer protection. Is not this proposal necessary to ensure that everybody who buys a home gets the speediest possible service and all the information that they need before signing a cheque for a whacking great price for their house?

Photo of John Hayes John Hayes Shadow Minister (Communities and Local Government) (Housing and Planning)

I will address both those points, on speed and the quality of information that people receive, in my brief remarks. The hon. Gentleman's point on the Consumers Association is a fair one, and as ever, he makes a good argument. It is a great pity that the Minister, in the full half an hour for which he spoke, was not able to cite it himself, as it was considerably more persuasive than any that he made.

The Minister said that the sellers packs are in response to popular demand, and that the market is not working. I am not convinced. The amendment goes to the heart of the contention over sellers packs. What is the position of the other place, and what is the Government's position? The Government say that everyone will be obliged, by law, despite the run-in period to which the Minister refers, to spend up to £1,000 when selling a house, regardless of the value of that house. In return, they will gain a sellers pack. Let us imagine someone who puts a modest house worth, say, £60,000 or £70,000 on the market, and who must then withdraw it from the market and re-market it some time later. We have no assurance from the Minister that the sellers packs will last any great time. We are told, as the other place debated at some length, that they may be valid for as little as three months. In the scenario that I just described, the person would have to purchase two sellers packs costing up to £2,000 for the sale of a £60,000 house that they might not sell anyway.

Photo of John Gummer John Gummer Conservative, Suffolk Coastal

Has not my hon. Friend noticed that the Minister prayed in aid the perfectly reasonable statement that an energy audit of a house is needed? He did not mention, of course, that that would last significantly longer than the pack, and that it had a rigour that meant that it was of use to the purchaser, whereas the sellers packs are so lacking in rigour that they will more often lead purchasers astray than be likely to give the kind of information that they would want?

Photo of John Hayes John Hayes Shadow Minister (Communities and Local Government) (Housing and Planning)

As ever, my right hon. Friend makes an apposite point, with his usual skill and charm. The picture, however, is even worse than he paints it.

I suspect—and the Minister has yet to convince us otherwise—that people will commission additional surveys to supplement these inadequate reports. I invite hon. Members to imagine that they are buying a property and are presented with a sellers pack containing basic information, and to imagine their suspicion about the paucity of that information—and their desire, in the case of an older property or one featuring particular difficulties, to obtain information that is as detailed as possible. I suspect that they would arrange their own survey. Not only will there be a sellers pack floating about; for the reasons my right hon. Friend has given, additional surveys may well be commissioned. Indeed, I suspect that the sellers packs will prompt additional surveys rather than replacing surveys.

Photo of Edward Davey Edward Davey Shadow Spokesperson (Office of the Deputy Prime Minister), Liberal Democrat Spokesperson (Office of the Deputy Prime Minister)

Many lenders have not said that they will rely on home-commissioned reports. Many will have their own valuations carried out. Moreover, it should be noted that house sales fall through mainly because of valuations done by lenders, as opposed to surveys undertaken by buyers.

Photo of John Hayes John Hayes Shadow Minister (Communities and Local Government) (Housing and Planning)

The hon. Gentleman is right, and I shall return to his point if I have time.

Photo of John Butterfill John Butterfill Conservative, Bournemouth West

Is there not a great danger that some large firms of estate agents that claim they will co-operate will do so because many poorer vendors cannot afford packs up front? The estate agents will say, "We will supply you with a pack, and when we have sold your property, we will knock the cost off the proceeds of sale." The poor vendors will then be locked into the clutches of estate agents who, in some instances, are quite unscrupulous. They will not be able to change from an estate agent who does not perform properly, because they will have a debt to the agent who supplies the pack.

Photo of John Hayes John Hayes Shadow Minister (Communities and Local Government) (Housing and Planning)

That is a good point. As was mentioned in Committee, in other countries there are strict regulations—indeed, laws—preventing such a possible conflict of interests. In this country, that does not apply, and the Minister has given no guarantee that it is likely to. I think that there may well be real issues of probity. Such issues were raised in the other place, and they were raised by Conservative and Liberal Democrat spokesmen in Committee. Once again, however, we hear nothing from the Minister, despite the length of his speech.

The Government say that the proposal will speed up the process, and Mr. Kidney repeated that claim. But the Lords, including Lord Donaldson, say that it may have the opposite effect—that it is likely to slow down the process.

Let us imagine another scenario. Someone may want to put his house on the market quickly. He has in mind a potential buyer, perhaps a person he knows in his locality. He will not even be able to begin the transaction until he has commissioned and put into effect a sellers pack. If neither party has demanded that, it is nonsensical to suggest that it is likely to speed up the market and make it more efficient.

The Government say that sellers packs may cost only £600, but we know that they will not be introduced until 2007. We know that by the time they have become compulsory, things will have moved on. We know that there is no cap on the total price of the packs. The Minister's blithe statement that competition will drive the price down flies in the face of all our experience of buying and selling houses, and of commissioning reports of one sort or another concerning the condition of those houses.

The Government say that sellers packs will remove the need for other surveys, but as Mr. Davey said, mortgage lenders have given no assurances of their willingness to accept them as an alternative to their own surveys. Indeed, the Council of Mortgage Lenders has made clear that it is not prepared to give any such guarantee on behalf of its members. The Minister could not name a single lender that had given an equivalent guarantee. He said that they were all geared up to writing them and were starting businesses in order to roll them out, but that is no surprise, is it? No doubt sellers pack millionaires will emerge from this. That will be the Minister's legacy.

The Government say that sellers packs should be compulsory. In the other place, Lord Hunt described the compulsion issue as the key question. If the packs are such a good idea, why do not the Government trust the people and allow them to say whether they want them or not? If the packs are to replace any other surveys, including those required by the companies offering mortgages, why do the Government not allow them to be voluntary?

The case made by peers throughout the other place was convincing. They said, much as we did, that the Government had failed to persuade anyone of their argument, and we heard the reason for that at the very end of the Minister's long speech. He said that they were obliged to do it because it was in two manifestos. For once, the Government are sticking to a manifesto commitment. That is an unusual and welcome change from common practice.

The Government said that they would do this, and despite all the evidence they intend to do it. In effect, they are saying, "We don't know for how long the sellers packs will be valid, we don't know who will accept them and we don't know what they will cost, but we will impose them on you anyway." They are wrong, the Lords are right, and we will support our noble Friends and other Members of the other place who have championed the cause of sellers and buyers in opposing these silly packs.

Photo of Edward Davey Edward Davey Shadow Spokesperson (Office of the Deputy Prime Minister), Liberal Democrat Spokesperson (Office of the Deputy Prime Minister) 7:45 pm, 8th November 2004

In the three minutes that remain, may I try to be helpful to the Government?

Lord Rooker said in the other place:

"I realise that ours is a high-risk strategy . . . The fact that 40,000 dwellings are marketed every week means that if we get our provisions wrong, the Government are in deep trouble."—[Hansard, House of Lords, 3 November 2004; Vol. 666, c. 355.]

I believe that the Government should be a little more cautious. They should think about the risks not just to them but to the millions of home buyers up and down the country. This really is a gamble. The Government have more or less admitted that they will arrange pilot schemes and a voluntary period, but they need to go much further.

The real danger is that the housing market could grind to a halt in some areas, and purchase costs could rise significantly. That could damage not just the economy but many individuals.

Lord Hunt of Wirral quoted comments by the late Earl Russell in one of his last speeches in the other place:

"There is necessarily a place for compulsion, but it is an unpleasant, expensive and labour-intensive process that will not become easier while the Chancellor is engaged in reducing the number of civil servants. So where something can be done voluntarily and compulsion rendered unnecessary, it is a good thing". —[Hansard, House of Lords, 21 July 2004; Vol. 664, c. 270.]

Earl Russell was right. There is no need for compulsion. There is no demand for it. It will be a costly mistake if the Government push ahead.

I hope that the Government can, through the discussions in this and the other place, put into the Bill the notion that it will keep the home information packs voluntary until another order comes before Parliament. The Minister made great play of the promises in the manifesto. If he reads it again, he will find that the Labour Government promised only to introduce home information packs. Nowhere in the manifesto does it say that they should be compulsory. With the support of the Opposition, the Government could meet the manifesto pledge by keeping the proposal voluntary. Then they will get the support of all parties and of both Houses.

Question put, That this House disagrees with the Lords in the said amendment:—

The House divided: Ayes 292, Noes 148.

Division number 312 Orders of the Day — Housing Bill — Clause 137 — Duty to have a home information pack

Aye: 292 MPs

No: 148 MPs

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Question accordingly agreed to.

Lords amendment disagreed to.

Photo of John Butterfill John Butterfill Conservative, Bournemouth West

On a point of order, Mr. Deputy Speaker. It may have come to your attention that the timetabling of the debate on that group of amendments was such that not only did no Back Bencher on either side of the House have the opportunity to speak, but even the Opposition Front-Bench spokesmen were obliged to curtail their speeches on probably the most contentious clause—indeed, possibly the only contentious clause—in the Bill. Perhaps you, Mr. Deputy Speaker, could rule on that, and those in another place may wish to take it into account when the Bill goes back to them.

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

The hon. Gentleman knows that I cannot rule on that matter now; those arrangements were agreed by the House earlier. However, he has got his point on the record and no doubt it will be read by those who are interested in such matters.