Home Information Packs

Oral Answers to Questions — Communities and Local Government – in the House of Commons at 2:30 pm on 20 January 2009.

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Photo of Angela Watkinson Angela Watkinson Opposition Whip (Commons) 2:30, 20 January 2009

If she will use her powers under the Housing Act 2004 to suspend the requirement for sellers to provide home information packs.

Photo of Angela Watkinson Angela Watkinson Opposition Whip (Commons)

Surely the Minister has realised by now that home information packs were a bad idea from the outset. Even when the housing market was buoyant, neither sellers nor buyers had the slightest interest in them. Now that the housing market is so stagnant that estate agents are going out of business, the Minister could take this opportunity to abolish the utterly superfluous home information packs without loss of face. Will she do that?

Photo of Margaret Beckett Margaret Beckett Minister of State (Department of Communities and Local Government) (Housing)

First, let me say to the hon. Lady that the intention—and, indeed, the effect—of home information packs is to provide much needed information for consumers on the most important purchase of their lives. She talks as though home information packs have had no impact and no benefit, but 1.2 million such packs have been issued. They are the most simple way of getting information for that most important purchase. She may feel that it is not important to protect consumers; consumer representatives do not, and nor do the Government.

Photo of Clive Betts Clive Betts Labour, Sheffield, Attercliffe

Does my right hon. Friend agree that the problem in the housing market currently is not a shortage of people wanting to sell their homes—one just needs to see the number of estate agents' boards around the place—but a shortage of people able to afford houses and, in particular, of first-time buyers able to afford mortgages? Does she agree, therefore, that it would be completely counter-productive at this time to transfer costs from people who are desperate to sell to buyers, particularly first-time buyers, who are working at the very margins of affordability in seeking to buy a home?

Photo of Margaret Beckett Margaret Beckett Minister of State (Department of Communities and Local Government) (Housing)

My hon. Friend is entirely right to say that the key to the housing market in many ways is the role of the first-time buyer, who will incur no such costs but to whom the packs can provide extremely useful information. We recognise that this information does not take a great deal of time to obtain or, in the context of a house purchase, involve a great deal of cost, yet it can make a big difference to consumers.

Photo of Anne Main Anne Main Conservative, St Albans

I pressed the Minister on this issue when she appeared before the Communities and Local Government Committee on 27 October. At that time, she estimated that £5 million had been spent on marketing the packs, to provide a benefit of only £30 per pack. I said that I was concerned that the packs were becoming outdated in a slack market, to which she said:

"Of course that is an issue that we are looking at with the relevant authorities".

She accepted that it would be a problem in a slack market. What exactly has she done since then to ensure that the arrangements are not affected by the slack market?

Photo of Margaret Beckett Margaret Beckett Minister of State (Department of Communities and Local Government) (Housing)

All I can say to the hon. Lady is that there is no evidence that this is a growing problem, and yes, of course we keep the matter under review; it would be unwise not to. However, while a house remains on the market, the same HIP can continue to be valid. Even if a house is taken off the market, the pack can be used again if the house is put back on the market within 12 months of the first day of marketing. So, in fact— [ Interruption. ] The hon. Lady makes a great deal of noise, but the consumer representatives share our view that this kind of information, on the biggest purchase that most people will ever make in their lives, is of real potential value and actual value. That remains our view.

Photo of Jim Devine Jim Devine Labour, Livingston

Will my right hon. Friend ensure that the packs contain information about factoring and land maintenance companies? I am the chairman of the all-party group on land maintenance, and I have been inundated with complaints from people throughout the United Kingdom who buy a house without realising that they will have to pay up to an additional £400 a year to a factoring company. Nor do they realise that, even if the company provides an inadequate service, they cannot get rid of it.

Photo of Margaret Beckett Margaret Beckett Minister of State (Department of Communities and Local Government) (Housing)

My hon. Friend is right to identify the fact that, in many cases, people faced with making such a substantial purchase are looking for more information, rather than less.

Photo of Grant Shapps Grant Shapps Shadow Minister (Communities and Local Government) (Housing and Planning), Co-Chair, Conservative Party

I am not convinced that the Minister really believes that home information packs are the right way forward. If they are so beneficial to the housing market, why was the former grace and favour residence of Mr. Blunkett—Government house in Pimlico—placed on the market by the Minister without a fully completed home information pack?

Photo of Margaret Beckett Margaret Beckett Minister of State (Department of Communities and Local Government) (Housing)

Any property that is put on the market has to have a fully completed home information pack, and I am sure that that one will. I am not familiar with the case that the hon. Gentleman has mentioned, but I am sure that the law will be met by those who are placing that property on the market, as with any other. I would simply say to him what I have already said to his hon. Friends: this provision is of real potential benefit to consumers, and I wish I could say that it was untypical of the Conservatives not to share that concern.

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

Can my right hon. Friend tell me what evidence there is that home information packs have, in practice, saved people buying or selling houses any money whatever, or speeded up the process in any way?

Photo of Margaret Beckett Margaret Beckett Minister of State (Department of Communities and Local Government) (Housing)

Yes, I can. In practice, the evidence shows that the average cost of searches has gone down by some £30, and there are examples of the cost coming down by as much as £120. There has also been some welcome, and expected, market-led innovation. For example, if, for whatever reason, a search needs to be refreshed, or a second search is needed, some estate agents are beginning to provide them free of charge. I assure my hon. Friend that there is an indication that, in some cases, the packs are speeding up sales. They are certainly giving valuable information and, as I have already said, they are reducing costs.