Home Information Pack Regulations 2007

My Lords, I continue to support the Government’s intention to reform the process of buying and selling houses. Under the current arrangements, a buyer enters into an undertaking to buy a property without having crucial information on the property from either the seller or the estate agent, who is being paid a fee to sell the property. The buyer, not having been given this crucial information, must then spend money on searches and copies of the deeds to find out whether the undertaking to buy at an agreed price is sound or not. Logic suggests that those selling the property ought to provide all the necessary relevant information about it to a prospective buyer, rather than leaving them to find out key pieces of information at their own expense. Then, if the information they find leads them to withdraw from the purchase, they have incurred expenditure they cannot recoup and are, of course, no nearer to having purchased a property. If they are part of a chain, their decision to withdraw can lead to other transactions falling through, with expenditure incurred by other buyers being wasted. The reality is that £1 million is lost in aborted costs every day. Of course, buyers have also spent money they cannot recoup if the seller withdraws after the expenditure has been incurred on searches and copies of legal documents, but before contracts have been exchanged. The groups that do not lose out under the present arrangements are those doing the searches and obtaining the documents, because they get paid for what they do irrespective of whether the sale proceeds. Indeed, if the sale does not proceed,they potentially do better, because any subsequent potential buyer will have to go through the same process of having searches undertaken, again at their own expense. The Government intend to transfer the cost of searches and obtaining required documents from the buyer to the seller. This means that obtaining required documents only has to be done once on a property, avoiding buyers having to pay such costs—possibly more than once—and more than one search being undertaken on the same property. It also ensures that the person selling the property has an obligation to provide the necessary information which a buyer needs about the property for them to make a decision on whether or not to enter into a contract of purchase. Since the majority of sellers are also buyers, so they would secure the benefits when purchasing. The group that would stand to benefit most, since they are not sellers at the same time, would be first-time buyers when arrangements can be extended to them. The information required in the home information packs which does not currently have to be obtained is, of course, the energy performance certificate. It is designed to improve energy efficiency through providing information about a property on the issue. What evidence there is suggests that the most likely time for energy efficiency improvements to be made is when a property changes hands. Energy performance certificates give homes an energy rating and, since more than 25 per cent of our carbon emissions come from our homes, addressing this point is relevantin acting against the threat of climate change. Information about energy efficiency measures that have or have not been carried out in a property, what the fuel bills are, how they can be reduced and how carbon emissions can be cut will encourage people to make energy efficiency improvements. We should be aware of the declared goals of oneof the organisations opposing the proposals. I was somewhat surprised to read a letter from the chief executive of the National Association of Estate Agents in one of the appendices to the report from the Merits of Statutory Instruments Committee. It stated: "““We have consistently stated that the Government’s, and our, desire to improve the Home Buying and Selling Process will not be improved by the introduction of HIPs. As we have mentioned to the Minister, more than once, if HIPs were really going to achieve this—" that is presumably a reference to the improving of the home buying and selling process— "““thus reducing our members’ costs and increase their profits, members would have been 100% in favour of them””." It is good to know the goals that drive the National Association of Estate Agents on this issue. They appear to have little to do with securing a better deal for its customers, although one has to say that there is evidence that by no means all estate agents share the view of the national association. I hope that the Government will pursue their plans and will make sure that in future all originally anticipated requirements are a part of the home information packs or whatever may take their place and that home condition reports will be a mandatory part of the package before too long.