rose to move, That this House calls on Her Majesty’s Government to revoke the Home Information Pack (No. 2) Regulations 2007 (SI 2007/1667) and the Housing Act 2004 (Commencement No. 8) (England and Wales) Order 2007 (SI 2007/1668).
The noble Baroness said: My Lords, it is eight weeks since we last had an opportunity to debate the Government’s proposals to introduce home information packs. Then, this ridiculous policy was having to be put on hold because of the wholly predictable fact that there were insufficient home inspectors trained to carry out either the home condition inspections or the energy performance reports. The Merits Committee had also issued a damning report on the whole project. The old regulations were withdrawn in May, new regulations were promised and laid in June, so here we are again.
The new regulations maintain the insistence that there should be a home information pack when a house is sold, but the requirement for it will be phased in, starting on 1 August for four-and-more-bedroom houses. Here lies the first recipe for disaster. How are four-bedroom houses defined? What is to stop an owner altering the rooms and selling the house on a different basis, say as having three bedrooms, a study and a playroom? That would not require a home information pack. Four-bedroom houses also amount to less than 20 per cent of the housing stock and are unlikely to be sought by the majority of first-time buyers—the people home packs are meant to help.
The pack itself has to contain an index, an energy performance certificate, title extract and a seller’s form. That is all; everything else that a house buyer might need to know, such as the condition of the property, or information on warranties or policies to guarantee against defects, leasehold interests, rights of access, sewerage, drainage, water, gas or electrical services, may or may not be provided. If it is not, the buyer will still have to find and pay for it himself. The mangled mandatory pack is to cost in the region of £600, to be borne by the seller. It is blindingly obvious that this cost will find its way into the sale price of the property, so the buyer will pay for it anyway, as he will almost certainly have to do for an independent survey on the condition of the property—one of a standard to satisfy him and his mortgage company—as well as the searches and all the documents for the sale.
Since we last spoke, the requirement to have a home information pack before a house could be put on the market has vanished. Now it will be sufficient just to have ordered a pack. But what buyer is going to sit around waiting for a pack to appear? At some stage, buyers will do what any buyer has always done—commission their own searches and documents in case the pack never appears, and pay for them. Furthermore, is it really the Government’s business to endorse a system that would circumvent the need for a home information pack if the property is being sold under the sell-for-free system run by some property finders, so that when estate agents must sell with a home information pack these businesses do not have to do so? That could distort the market.
There is almost universal agreement on three points. The first is that the energy performance of a house is becoming an important piece of information. Under European law it will become a requirement to have that information in 2010, but it is unnecessary for a performance certificate to be attached to the sale of a property at this time. I am afraid that the Government have made up this aspect; they are gold-plating the directive, presumably to justify continuing with the packs. We believe that the requirement for the certificate could and should be detached from the home information pack and become a standalone requirement, carried out against the timescale of the directive—once every 10 years—and not, as currently, as not more than one year old on sale. This is not even particularly efficient. Delivery of energy performance certificates through home information packs will take about 15 years to assess the nation’s housing stock, whereas if, for example, energy companies were encouraged to deliver energy performance certificates out of their budgets for energy efficiency, the same result could be delivered in a far shorter time.
Secondly, since the first idea about having home information on houses at point of sale was considered, things have moved on. E-conveyancing is becoming a reality, the provision of seller disclosure forms is being considered, and the industry’s various other initiatives to make house purchase and sale quicker and more efficient are really well under way and begin to make any suggestion of home information packs redundant. Their protracted introduction may have gingered up the professional organisations to think further about how to improve efficiency, but modern ideas are now taking off.
Thirdly, home information packs are a con. What is now on offer is a million miles from where the Government first started, when they were going to consist of comprehensive documentation, including a home condition report, which would mean that a buyer would have all the information required to make a speedy assessment of a property and a decision on a sale. Bit by bit, that has fallen apart. Home condition reports, once compulsory, have become voluntary. Insufficient inspectors have been trained to carry them out. Concern that they would not be of a standard to enable mortgage lenders to rely on them has still not been resolved. In all, the whole pack has unravelled.
Why are the Government persisting with this completely discredited policy? What is to be gained by continuing to pretend that it will benefit, in particular, first-time buyers and deter gazumping when every professional body, apart from those whose job it is to sell home packs, says that it will do neither? Why now justify these failed proposals on the only aspect of any value—the energy performance certificate—which is perfectly capable of being introduced on its own? Further consultation on the process of doing so has not been undertaken with the professional bodies, such as the Royal Institution of Chartered Surveyors and the National Association of Estate Agents, and it is clear that without the transitional introduction of packs, there would not yet be sufficient domestic energy inspectors trained to cover the whole market.
Will the Criminal Records Bureau checks for those trained to be domestic inspectors be as stringent as those for home inspectors? It is reported today in the press that domestic energy inspectors will not be checked for previous convictions. If that is the case, it will be a disaster.
Seldom can a government initiative have gone so spectacularly wrong. It has been panned by practically all the professional bodies associated with house sales. Despite warnings from this House and the other place on innumerable occasions that the policy was simply not going to work, the Government have, none the less, ploughed on. This is the Minister’s opportunity finally to admit that the policy is badly flawed, should be withdrawn and either rethought or abandoned. We will gladly support the introduction of energy performance certificates as a separate and freshly considered initiative, but home packs must go. I urge the Minister to do everyone a favour—buyers, sellers and professionals—and abandon the packs this afternoon. If she will not, I will ask the House to support my Motion against her. I beg to move.
Moved, That this House calls on Her Majesty’s Government to revoke the Home Information Pack (No. 2) Regulations 2007 (SI 2007/1667) and the Housing Act 2004 (Commencement No. 8) (England and Wales) Order 2007 (SI 2007/1668).—(Baroness Hanham.)
My Lords, here we are again. It seems that for the past two years or so a debate on the latest saga on home information packs has become a regular feature of business in your Lordships’ House. The policy, which had some flaws when originally conceived and included in the Housing Act, has become worse. The Government, in a sense, have been a victim of being almost too obliging; by attempting to respond to many often conflicting pieces of advice from outside bodies, they have ended up with something less coherent and less consistent than it was when we started.
These Benches have always been ambivalent about home information packs, essentially on the basis that it was difficult to imagine that a buyer could have full confidence in information provided by the seller. That fundamental flaw always made us concerned about whether home information packs would be viable.
However, we have always supported energy performance certificates. They are a good way of helping householders to keep warmer, to save money and to reduce carbon emissions—we know that 20 per cent of UK carbon emissions come from domestic housing. It is a pity that the Government did not take stock at some point and concentrate on how best to deliver energy performance certificates, separating them from home information packs. All our concerns have been amplified by the Government’s removal from the home information pack of its most significant element—the home condition survey. Without that, the pack is, frankly, meaningless.
I hope that the noble Baroness will address some of our concerns. First, on security checks, we have been told that domestic energy surveyors will not have to undergo as rigorous a criminal check as inspectors carrying out home condition reports. Can she confirm that and perhaps explain why different standards apply? Indeed, I understand that estate agents, who also have access to one’s home, undergo no checks at all and that varying standards are required for utility inspectors. Perhaps the noble Baroness might consider whether there should be some consistency in approach, so that householders understand the background of the people whom they are letting into their home, particularly those whom they let in because they have to, as they have no choice about these inspections.
Will the noble Baroness update the House on the current standing of the judicial review, which was launched by the RICS some six or eight weeks ago? I know that the judicial review was put on hold in order to give the Government a chance to refresh their thinking. In a similar vein, could she tell us how the pilot studies are going? One of the points made by the Merits of Statutory Instruments Committee in its last report was that not enough information about the pilot schemes was being made public; it asked how we were therefore to make a judgment.
We are in a difficult situation because there is no doubt that the industry, in its broadest sense, needs some clarity on how the Government will progress. A rather fetching document from an estate agent came through the door of my London flat. It is called Getting HIP: The Low-down on the New Legislation. It says:
“Home Information Packs will be with us soon—well, we think so anyway … after so much uncertainty, who knows whether they’ll ever come into force”.
It also says:
“The government has won few friends with how HIPs have been introduced but it’s our role to help vendors through the chaos”.
The Government cannot be happy that the industry is regarding the policy in that light. I am sure that the noble Baroness will want to assure the House that the Government are taking the situation very seriously and that they recognise that clarity within the industry is required.
As of 13 March, the Government had spent £11.6 million on developing the policy. A reply to a Written Question that I tabled in July said that an additional £8 million has been spent since then. The fact that almost £20 million has been spent on a policy that has not yet begun and which the industry really does not understand is not, I suggest, a great success.
My Lords, I congratulate the Government. It takes a huge amount of ingenuity to keep a grisly soap opera running for five, six or seven years and repeatedly bringing it into your Lordships’ House, with each edition worse than the previous one. More and more people outside are interested as the press begins to realise that what we have been talking about is accurate and that the policy is riddled with contradictions and loopholes and is probably unenforceable.
Our Merits of Statutory Instruments Committee is kept busy entirely as a result of the noble Baroness’s department. For the second time this year, it has had to look at the package and, for the second time this year, it has had to report that the proposals will not achieve the policy objective in the way anticipated.
The noble Baroness, Lady Scott of Needham Market, referred to the home condition survey, which I am delighted is not in the home information pack. I did the training for it. I would never have relied, as a purchaser, on a house that had had a home condition survey, because the survey did not cover the really important things in a house, such as drainage, electricity and water. These were expressly excluded and one would have had to do a proper survey of one’s own to cover those matters.
My noble friend Lady Hanham referred to people coming into homes with the right qualifications and the right security checks, but perhaps there is no need for that. Estate agents are in and out of people’s homes every day and they do not have to have any security checks. Anybody can set up as an estate agent—any ex-prisoner, for example. The noble Baroness, when she loses her position at the next election, can set up as an estate agent the next day. We all trust her implicitly, but there are an awful lot of estate agents whom one does not trust at all.
However, we have lost an opportunity, because the noble Baroness rejected my amendment that would license estate agents. One of the advantages of licensing estate agents would be to cover the important matter of the safety and security of the consumer. It is entirely the Government’s fault that that problem, which has been highlighted over domestic energy surveyors, will be raised more and more often. It is a delight to see the government Deputy Chief Whip on the Front Bench. In, I think, 1978, he introduced what became the Estate Agents Act 1979. At that time, he, too, would have wished very much for estate agents to be licensed and for proper security checks to have been made.
Energy performance certificates are very important but they are a fairly blunt instrument to achieve what the Government want to do. As my noble friend Lady Hanham said, they gold-plate the EU regulations; that is not unusual with government departments. I recall it happening very often when we were in government—and that is not to our credit.
There are many loopholes in this proposal. Not every house that is put on the market needs an energy performance certificate. The house may be marketed by a home-finder who is not an estate agent or the vendor and they may say, “I am getting a pack prepared”; in that case, an EPC does not need to be prepared at that stage.
If the Government really want an energy survey of our homes, they need to include the houses that never come on the market. Quite a number of houses will never come on the market and never have an EPC. The Government’s policy will therefore not achieve their objectives.
I am delighted that the Government will now allow us estate agents to do first-day marketing, but that raises exactly the problem that the noble Baroness, Lady Scott of Needham Market, mentioned. The vendor will be able to say, “I have commissioned a pack”, and, in a housing market such as it is now, the house will doubtless have been sold before the pack is ever produced—not that it will ever be of much benefit to the purchaser. In a bad housing market, the situation will be different. I expect that we could be in a bad—or a very different—housing market in the not-too-distant future. We will then get a different argument, which will involve all the additional costs that the Government are forcing on vendors by requiring them to have produced all this rather worthless information up front.
I support my noble friend Lady Hanham. I ask the Minister once again to reconsider all of this; please take it away and please take it back to your Secretary of State, Mrs Balls, and say to her, “This is not a policy that will work. You are a new Secretary of State; let’s have a fresh look at this”. The Minister will know that there was a big meeting yesterday at the RICS, at which it and the NAEA looked at the whole of housing policy. We should build on that and come forward with something that everybody in the industry agrees on and the public can live with and benefit from.
My Lords, the difficulties that are inherent in the sale and purchase of real property are considerable and historic, and will remain with us whatever view the House takes on this Motion. In our debate on 22 May, many, including myself, belaboured the point that for more than 300 years there has been an inevitable time gap between the moment at which an agreement—a meeting of minds in an oral agreement—is made with regard to the sale and purchase of land and the moment at which that agreement becomes binding in law by the evidence in writing of the agreement. For the past 18 years, that has had to be in writing. That will remain the situation, and that is the essential problem.
In that time gap, good and evil will operate. The good that will operate will be that the purchaser is able to negotiate fully a mortgage—that is needed in the vast majority of home purchase transactions—and he will be able to make full investigations into the physical state of the property and any environmental problems. That cannot happen overnight and it is the main reason why there is that time gap of three to six months between the oral agreement and the exchange of contracts. The room for manoeuvre by the Government—by any Government, however committed—is therefore limited.
I sought to belabour that point on the last occasion and I make no apology for doing so again, because it seems to be central. However, the Government, on this occasion, are in a stronger position than they were on 22 May. At that time, I suggested, perhaps less than prudently, that the failure to make the home condition survey part of a compulsory scheme was a fundamental flaw. I have changed my mind. Even if it was made compulsory, a valuation would still be necessary. On what would that depend? It would depend on the property’s physical condition. Therefore, a home survey that did not contain a valuation—and it has never been suggested that it would contain one—would inevitably be duplicated and, in practice, would not achieve anything on its own. For that reason, I have changed my mind.
There is a case for the home information pack even if its effect is limited. One beneficial effect is the creation of a culture of acceleration in relation to that period of three to six months. There is some anecdotal evidence that constant pressure—and the Government have been consistent on this for 10 years—has brought about some change, because of that climate of psychology. Indeed, there is overt evidence that over 50 local authorities, being acutely conscious of the delay in issuing search results and of the cost of searches, have reduced both the time and the cost by at least 20 per cent. What about the £20 million spent on this over the years? If that money has been responsible for that result alone, as I believe it has, it will have been money well invested.
The limitations are considerable. I am sure that anybody looking soberly and fairly at the situation will accept that. It is right and proper that the energy certificate should be an integral part of the home information pack. Obviously, I am not privy to the Government’s thinking, but I do not know why they have gone so far in this direction, beyond the Brussels requirements—maybe out of some obeisance towards Brussels, but I doubt it. I suspect that it has much more to do with the consideration that over a quarter of our energy emissions come from domestic premises and that, for a comparatively low rate of expenditure and with comparatively little interference with the rights and day-to-day manoeuvres of ordinary people, this proposal can achieve a great deal. If that can be brought about, that again will be a first-class investment.
I appreciate that, since 22 May, there has been a vast improvement in the number of accredited inspectors. I am glad that that is so and that there is a gradual phasing-in of this system to avoid a potential big bang of bringing it in all at the same time.
However, there remains considerable cynicism on the part of those sitting on the Conservative Benches and, to some extent, on the Liberal Democrat Benches. Far be it from me to pretend to sit in judgment on them in this matter, but I hope that they will accept that here we are dealing with a massive social problem, which has caused much frustration and much unnecessary loss to many people. The losses in financial terms alone must amount to well over £500 million per annum. About 25 per cent of all sales fall through, many on account of gazumping, and there is little that we can do to change that. Even if we adopted a Scottish system of a series of missives, I doubt very much, due to the totally different culture relating to conveyancing in England and Wales, whether it would bring about any meaningful change.
Therefore, we are left with a considerable social problem, as I am sure the Conservative Party and the Liberal Democrats accept. What is their solution? Are they prepared to ask the public to consider any alternative here? I say that not in any spiteful way or with a hectoring attitude, but I beg them to consider whether it is necessary to divide the House on this matter. If they do, whether they succeed or not, they will create confusion and uncertainty for the general public. I do not pretend for a moment that the situation is not already tainted by confusion and uncertainty, but they will add to that and I do not think that they will do the British public any service whatever.
My Lords, I do not think that the House should be under any illusion but that we are facing an attempt by a new boy on the block to enter into the buying and selling of houses, which has been the almost exclusive preserve of a number of vested interests. When we talk of the people who have influence in this matter, we should not forget that estate agents, surveyors and others, whose cosy club has existed for a long time, feel threatened. They are right; they are being threatened.
The Government are accused of doing something, when for years nothing was done directly to tackle a problem that has affected most people—including noble Lords, and I am certainly not an exception—involved in buying or selling a house. Therefore, from my point of view, the Government are to be congratulated on doing something.
The criticism levelled at the Government is that their grand plan of three or four years ago has been watered down. However, they have listened, rejected, changed and consulted, and they have finally come to the conclusion that the only additional procedure in buying and selling a house should be the requirement for an energy performance report. The case for such a report, taking into account the issue of waste, has not been denied. The noble Baroness, Lady Hanham, said, without any caveat, that the report would cost £600, but the cost that I have been given is £300 to £400. She may be right, but so might I. I got my information from a source whose briefing, I am sure, will have reached the noble Baroness. Given that the average cost of buying a house these days is over £200,000, the additional cost of the report—shall we say £400?—is a flea bite. No one will willingly subject themselves to being bitten by a flea; however, if that is what it boils down to, and there is a service, it is a good thing.
We talk glibly about global hostility to the matter among surveyors, estate agents and solicitors, but it is not necessarily so: some surveyors, estate agents and solicitors approve. The argument has rested on the unreadiness of the system to operate. I take the point made by the noble Baroness, Lady Hanham, about defining a four-bedroom house. Yes, there are clever people who are prepared to twist things and to commit subterfuge. I do not just mean estate agents or surveyors; some ordinary people will resort to it. If, for the extra cost, this piece of paper is produced, the 1,600 people who are ready now will shortly be increased to 2,000, which is an adequate number, I am told, to deal with that which the order seeks to do.
The legislation is very limited compared to how it was. For the life of me I cannot see why the House is not prepared to give the Government the opportunity to put into practice that which noble Lords have always said they want; that is, to bring down the cost of selling and buying a house. Hitherto, these reports have had to be commissioned by the buyer; in future, they will have to be commissioned by the seller, so the cost to the first-time buyer will be substantially reduced. The noble Baroness, Lady Hanham, shakes her head. She may be able to quote evidence to show that the cost will not fall on the seller but on the buyer. We all know that people buying and selling houses are often in a chain. What you win on one you lose on the other, but as a result the costs will be marginal.
The noble Lord, Lord Elystan-Morgan, made a powerful point about the cost of abortive sales that fall in early on. Hundreds of millions of pounds have been lost because of delay, missed opportunities and so on. The Government—I do not use the words “congratulate” or “persistence”—are seized, as I am, of the need not just to do something, but to do something positive and helpful for people who want to reduce the cost of buying and selling their houses.
I take with a pinch of salt the claim that the whole industry involved in buying and selling houses is opposed to the scheme. I know them well enough to believe that, once the scheme is operating—it has to start—a growing number in the industry will come to the view, “Well, if there is some gravy to be lapped up, I may as well get a little bit of it”. The Minister has my support in her attempt to assist ordinary people to buy and sell their houses as equitably as possible.
My Lords, I promise not to make a Second Reading speech because we are looking at a regulation that is coming in. I am a great supporter of HIPs, not because of what they represent but because they include the EPC. We have discussed that with the Minister. It is an incredibly valuable aspect. Noble Lords on all Benches have said that they support EPCs, which is why no fatal amendments to the Bill have been tabled.
Everybody has mentioned how this debate is being reported. In my local property paper, the Avenues, there was a whole section on how this debate in the Lords would lead to the death of HIPs. That is not the case. We should not forget that this is a non-fatal amendment. If it is carried, HIPs will carry on. Previous votes have led to a delay in respect of most properties until properly trained individuals are ready, but they have delayed only one section. I ask the Minister to make a clear statement that all the other aspects will come into force as the regulations state—for the four-bedroom house, for example. I take issue with the noble Lord, Lord Graham of Edmonton: you do not have to be intelligent to work out what is a four-bedroom house; my seven year-old son could argue the case for what is a four-bedroom house. That will change at the end of the year, and all houses will fall under the regulation. All rental property, social housing and businesses will be included.
We should not underestimate the Government’s achievement in EPCs. They will save millions of tonnes of carbon. Because this has become a heated debate, I take issue with missives that we receive from lobbying organisations. The Royal Institution of Chartered Surveyors is a lobbying organisation, as far as I am concerned, when it sends me unsolicited e-mails—which made me rather annoyed—as if I agreed with every line and iota that it came up with. Members of that organisation are calling for an emergency general meeting to question whether the judicial review is in the interest of all their members. I know that the Minister will talk about the state of the judicial review, but the RICS has some internal issues that it will have to address.
If I were an energy assessor and had paid the RICS to take the qualification, but it then launched a judicial review that meant that I was probably out of a job for the next three or four months, I would be very unhappy.
I have one more issue to raise with the Government. Under EPCs, you can change two things that will change the energy rating of your house: the insulation in your loft and your boiler. Of course, changing a boiler is a major expense. However, the Government could use EPCs to indicate how inefficient a boiler is. If they then state that the boiler is inefficient, energy efficiency credits, which are issued by suppliers, could be used to reduce the amount of gas used by domestic suppliers, which is an obligation on the suppliers. That means that EPCs could be used to reduce the cost of replacing an inefficient boiler with an efficient one. That would be a massive step forward. I am sure that many noble Lords throughout the House, hand on heart, realise that they have tried to eke out the life of a boiler for five or six years past its real date of demise. If those boilers were changed in enough houses around the country, vast amounts of carbon could be saved.
I very much hope that the Minister will consult boiler manufacturers and other organisations to make that happen. It could happen without regulation and would be a real benefit of EPCs. Notwithstanding the real concerns advanced by my noble friend, which we have all shared, about how the measure has been implemented by the Government—I am not blaming the noble Baroness on this, but it has been a long and arduous process—I ask the House to consider that in the vote we are seeing whether we think EPCs are important. Climate change is an issue. One way to address it is through EPCs.
My Lords, I am very grateful indeed for this measured and thoughtful debate on such an important topic. I want to take the House through the changes that we have made since we last debated the issue, in response to the points raised and to the consultation and conversations that we have had with stakeholders. I shall try to reassure the noble Baroness that we have done everything that we can to make the introduction of HIPs on 1 August as smooth, robust and certain as possible. That is what we intend to do. I hope that at best I can persuade her not to press her Motion to a vote because arguments have been made for that, but I certainly want to give noble Lords as much information as I think is tolerable to reassure them about what the noble Lord, Lord Redesdale, rightly described as an arduous process, but one that is now in a good and strong position.
It is worth saying that the Prime Minister made clear last week that housing is one of the Government’s top three priorities. An essential part of that process is to ensure that people are able to buy and sell their homes in as open, modern, transparent and, we hope, stress-free a way as possible. On that I am indebted to the analysis given by the noble Lord, Lord Elystan-Morgan, both in the previous debate and today that makes clear how long we have been wrestling with this complex legal situation. We particularly want first-time buyers not to be unduly hindered from entering the market, and we believe that HIPs are an important first step in the process. They will help to end frustration and reduce costs. We remain committed to their introduction, alongside energy performance certificates.
As we have said many times, we believe that HIPs will improve the experience of home buying and selling for consumers by providing them with vital information collected at the start of the process, and for the first time provide them with important information about the energy efficiency of their home. First-time buyers will receive their packs free. It is also right to point out that we have already seen improvements. The price of searches has been driven down and processes are being speeded up. While I talk about it being a first step, we have already seen some changes in behaviour in the market.
The last time we debated HIPs was on 22 May and I updated noble Lords then on the agreement that we had made with the Royal Institution of Chartered Surveyors, brought about by its judicial review against the EPC. I shall come back to that point with an answer to the questions put to me. I also set out our decision to revoke and then lay revised regulations for Parliament to consider. I made clear our intention to roll out HIPs initially for properties of four bedrooms or more. That pragmatic approach was also in part a consequence of the judicial review by RICS and the uncertainty that that had caused among domestic energy assessors in training, who were very reluctant to come forward. Today, as we debate the issue again, I want to explain briefly why we remain committed to both HIPs and EPCs, to tell noble Lords about the progress we have made in meeting the targets we set to achieve a successful rollout, to look at our plans for monitoring and evaluation of quality following the introduction of HIPs, and to dispel a few myths that have been accumulating around the process. Lastly, I want to look at the longer term picture.
Noble Lords have once again expressed their opposition to HIPs in principle, described as cynicism by other noble Lords. All I say is that the whole motive behind this long journey has been to increase the transparency and predictability of the process by providing information early on and thus reduce the risk of problems that could be avoided surfacing later, at great cost in time and energy. HIPs will be of particular importance to first-time buyers.
The inclusion of energy performance certificates is an absolutely vital tool in our efforts to tackle climate change. Many noble Lords have argued that HIPs and EPCs can be separated, but anyone who believes that climate change is an urgent threat—the noble Baroness, Lady Hanham, indicated that EPCs are extremely important—would surely support the Government in trying to introduce them as speedily and urgently as possible, and that is what the HIPs vehicle allows us to do.
I cannot give the noble Lord, Lord Redesdale, a birthday present today—I congratulate him anyway—but I will look at his suggestion in a very positive fashion. It is both logical and interesting. If he will leave it with me, I would be happy to take it away. My response to the argument that we are trying to gold-plate the arrangement is that it is not gold-plating to want to move urgently—by sending a signal to homeowners that they can be helped to do something to reduce their costs—to reduce our carbon use and lower the costs of energy. An EPC which is 10 years out of date is not going to influence behaviour and will not cut tomorrow’s costs, which is why we are where we are. I remind noble Lords that carbon from our homes accounts for 27 per cent of all emissions.
Noble Lords have been rightly concerned with the process and the need for the introduction to be as smooth and as predictable as possible. On 22 May we announced that we were committed to re-laying the regulations, carrying on work to increase domestic energy assessor numbers, rolling out a pilot to look at EPCs and social housing, consulting stakeholders and running a consultation with RICS. We have done all those things. We could not have listened harder. Indeed, the noble Baroness, Lady Scott, said at one point that we had listened almost too hard.
We relaid the regulations on 11 June. We gave early notice to the industry to enable a full debate on the policy. The regulations were considered again by the Committee on the Merits of Statutory Instruments, which was supportive of the efforts made by the department in response to concerns both inside and outside Parliament in relation to HIPs, and of the opportunity given for further scrutiny. It welcomed the Government’s response to stakeholders in holding a consultation on the age of the EPC.
The noble Baroness, Lady Hanham, said we had insufficient domestic energy assessors, but we have made progress and, as I predicted, the numbers have taken off. On 11 July, there were 1,603 fully qualified and accredited domestic energy assessors ready for 1 August, which is more than enough to deal with four-bedroom properties from1 August. We are well on the way to rollout of three-bedroom properties. We have provided certainty to the industry by setting out on 11 June in our implementation statement the criteria we will use to rollout HIPs to all properties, and we are well on the way to the target of 2,000 assessors for the later stages.
We said that we would try to ensure additional opportunities for qualified inspectors to find work. We have done that. The social housing pilot announced on 22 May is progressing well. We have approved bids for more than 120,000 EPCs from more than 100 local authorities and registered social landlords. Successful bidders were informed earlier this week. We expect most EPCs to be undertaken over the summer. It is an excellent opportunity to test the process before it is introduced to all landlords in October 2008.
I promised my noble friend Lord Graham that we would engage constructively with stakeholders and critics of the scheme, and we have done so; we have had extensive discussions with stakeholders over the past two months, including RICS. There is no uncertainty; they know that what we are putting in place on 1 August is a measured process. I am pleased to be able to tell the House that they have expressed a willingness to work with us on the next stage of reforms in this area.
The judicial review has been stayed, of course, on terms which require the Government to undertake consultation on the maximum and minimum age of energy performance certificates. We agreed that we would consult on the maximum age when it is included in a HIP. We are planning to start informal consultations with RICS and other stakeholders ahead of launching a formal consultation over the summer. Pending the outcome of that consultation, we have amended the regulations to say that an EPC must be no more than a year old when a home is first marketed.
I know that what noble Lords really want to hear from me is a guarantee that when HIPs are introduced on 1 August they will be acceptable and as positive a benefit as possible. Let me explain what we have done. To ensure that they are implemented with as little disruption to the current system as possible, the new regulations make it possible for people to market their homes without a HIP for a limited and temporary period, which will last until 31 December. However, before an estate agent or other person marketing the property does so, they will have to provide written proof that they have commissioned a HIP—this could take the form of a letter to a pack provider company, for example, or a copy of the application form; a simple process—and to show that they have either paid for it or agreed to pay for it, again with written confirmation.
There are enough HIP providers in place to provide this service. There are standalone services or they can be found in solicitors’ offices, estate agents, search companies and e-conveyancing. If some sellers still have difficulty in finding some of the documents—we know that leases, in particular, are quite difficult to get hold of—all they will have to do is show that they have made all reasonable efforts to obtain the missing documents. Once sellers have received their EPC, they will have to produce a HIP. Since all these documents will be needed in any transaction before a sale can be agreed and completed, the HIP, rather than being an obstacle, should be a more focused and quicker way of bringing key information together. That is the process that we have put in place. We are pleased that it will work.
Moving to monitoring and evaluation, we are ready to launch on 1 August. How will we know if HIPs and EPCs are achieving the benefits that we expect? I will say a word about costs. The price of an EPC is about £97, according to our initial trials. In practice, many will be cheaper. The price of the HIP in the area trial has worked out at between £300 and £400. Many are being offered more cheaply. We will be keeping a close eye on the market following the introduction of HIPs, to ensure a smooth rollout. As part of our work leading to the launch, we have had a number of discussions with stakeholders, which have helped inform our decisions on monitoring and evaluation. That means obtaining data at first hand from what is going on on the ground. We are receiving feedback from all parts of the HIP system—estate agents, trading standards officers and so on—to ensure that things are running smoothly.
The noble Baroness, Lady Scott, asked me about the pilots. Evidence from the area trials is continuing to inform the ongoing work, as it has already throughout the year. We expect this to continue as we receive more information. We will publish a report on the trials in the late autumn, when we have a sufficient and significant body of evidence.
Finally, I will deal with the myths around HIPs. Inevitably, new announcements and innovations generate their own mythologies. There are still a few that we have to deal with, the first being the four-bedroomed house. The noble Lord, Lord Redesdale, said that his seven year-old could explain why you would not market a four-bedroomed house as a three-bedroomed house. It is very simple. Why would you want to put yourself at risk of losing £120,000, which is the average price difference? The property editor of the Times does not think you would. She said the other day:
“In a slowing market, with more properties for sale, being economical with the truth to save a few hundred pounds could mean that your ‘three bedrooms plus study’ property is not first on buyers' viewing lists ... in some locations, space is an especially valuable commodity: Hometrack's average prices for a three-bedroom and a four-bedroom house in Wandsworth, South London, are £460,000 and £620,000 respectively”.
That is a major difference.
There have also been suggestions of loopholes in the current arrangements. I assure noble Lords that there are no such loopholes. We have deliberately put in place a more flexible system from 1 August, which enables a property to be marketed without a HIP, as I explained, provided that all the required documents are in place. There have been concerns about enforcements. Our concern is that we should have a light-touch regime. We have worked this out with the local authority co-ordinators, regulatory services and the Trading Standards Institute. We all think that HIP duties should be operated with a light touch during the first stages of the scheme, while it beds down. I am sure that everyone will observe our situation with common sense. However, trading standards officers will act on complaints and will penalise people.
I was asked specifically by several noble Lords about security checks. The DEA checks will mean that anyone acting as an assessor will be a fit and proper person to practice. They will be CRB-checked at a basic level—all offences of 2.5 years or more, spent and unspent, any offence within the last five years and any habitual offending will be recorded. The home inspector checks will be the same, except that the CRB checks will concern all offences, spent and unspent. I should say that the Association of Chief Police Officers has been consulted and is content. These checks are far more rigorous than, for example, for CORGI inspectors. They are more effective, as we heard, than for estate agents or even chartered surveyors. Accreditation schemes will not rely solely on criminal record checks; references will be followed up and so on. Why is there this difference? It is simply practical. Home inspectors will spend far longer in the home. They will not be accompanied, in the way that energy inspectors are when they search for the boiler. We felt it was proportionate to build in that slight difference while maintaining the absolute security of people in their own homes. I hope noble Lords will be satisfied by that.
We move on to the wider reform of home buying and selling processes. Why do we need to do that? We believe that HIPs with EPCs will make positive differences to those processes. They are the first step, as I have said. The Housing Minister has already had a number of discussions with key stakeholders to consider ways to build on HIPs to achieve the change. She is chairing a stakeholder panel on buying and selling that is now going to consider broader issues. Stakeholders have already made a number of positive suggestions that will build on and complement what we have done; for example, the introduction of e-conveyancing and the provision of additional up-front information in the process to better inform consumers.
The noble Baroness, Lady Scott, asked for clarity. The whole House asked us in May to listen, to make changes and to be secure in what we were doing. We have tried exceptionally hard to do what we were asked. We have adapted our plans to deal with issues and problems that have been raised, and we will continue to monitor their effective implementation. The time has come to move positively to welcome practical implementation. The market is geared up for delivery. We have enough inspectors in place, who are eager for employment. The industry has all the infrastructure for producing HIPs; it is ready and waiting. Consumers continue to press us for reform, and they are expecting this to happen. There is real urgency about tackling carbon emissions.
I urge the House to look forward. I know the noble Baroness, Lady Hanham, will see the importance of taking this first step; we have debated the issue across the Dispatch Box so many times over the past two years. I hope she will not press this to a vote, because I seriously believe that it will send a destabilising signal to everyone outside who wants and expects this to happen and is committed to making it happen. I urge the House to think seriously about its decision.
For all the reasons I have given, the Government remain committed to the commencement of HIP regulations on 1 August as planned and to the rollout to all properties shortly thereafter. Consumers, as well as all those who are committed to tackling change, are entitled to nothing less.
My Lords, I thank the Minister for that reply. I note everything that she said about what has taken place since we discussed this issue last in May. However, the situation remains that HIPs are nothing without the energy performance certificate; the documentation required under a HIP is minimal and putting together that information does not take an enormous amount of time or effort. It is a survey that requires effort and brings comfort to the people who are buying property. As we have said all along—and nothing that the Minister has said will change this—a proper survey will have to be carried out by everyone who is buying a property. I have seen no information about the level of the home condition report on which mortgage companies will feel able to rely in order to lend money. The home condition report is now voluntary. We were perfectly happy with that—it would have been a perfectly acceptable situation—but it was never going to be what was required in the home-buying area.
We have not moved against the regulations for the introduction of energy performance certificates. They will give valuable information about how much it will cost to increase the energy efficiency of a property. However, the inclusion of EPCs in HIPs will not increase the speed with which houses are sold. In fact, as I have suggested, their inclusion will hold the process up. If they were a requirement on their own, they could be introduced much more quickly than if they were limited to the sale of houses. The fact that the EPC is being introduced in social housing shows that it has nothing to do with the HIP and nothing to do with the sale of property. We have all been saying that this ought to be done as a completely separate entity. Without the EPC, what does the HIP give you? Remarkably little. It does not produce anything much and, despite all the efforts of the Minister and the Government, it still has not improved an enormous amount on the way through the system.
There should be a complete rethink about the energy performance certificates. They should be introduced on their own. They should not be part of the HIP process, which does not look as if it will be of benefit to buyers. The noble Lord, Lord Graham, asked how much it will cost. I can assure noble Lords that the cost will be put on to the sale price. I cannot see that the seller will do anything other than make sure that he gets his money back. It is not going to be free to the buyer.
We have had many debates on this matter. It is our view that the HIPs are still flawed. I beg leave to test the opinion of the House.