Peers Attack Housing Bill

The Government’s Housing Bill, which includes it’s contentious Home Information Pack (Hip), previously known as the Sellers pack, ran into trouble in the Upper House Yesterday.

In an amendment to render home information packs (hips) voluntary, and not mandatory, the House of Lords rejected the Housing Bill by a majority of 47.

The objections raised by the six main speakers against the bill are as follows:

Lord Hunt

"I shall deal first with the practical points. Mandatory home information packs would certainly introduce a new level of rigidity into the housing market. As there is no such thing as a free lunch, there certainly will be no such thing as a free home information pack.

"The cost is estimated at anything up to £800 per dwelling, and the latest figures that I have seen estimate that around 2 million dwellings are put on the housing market every year. Of those, only around 1.5 million are sold. In other words, as many as a quarter of the dwellings put on to the market are not bought or sold by anyone.

"In the present situation, one could say that no harm has been done, or that hardly any un-refundable costs have been incurred. With mandatory home information packs, that position will change significantly. Regardless of whether a property is sold, someone will have to cover the cost of the home information packs.

"The cost of the packs will also be highly regressive. A terraced house in a less fashionable part of the United Kingdom may cost only a fraction as much as a home in London, but the cost of a home information pack will inevitably be very similar for the two properties.

"I hesitate, particularly given the presence of the noble (Labour) Lord, Lord Rooker, on the Front Bench, to use the following term, but what he is proposing could become a form of poll tax for the housing market."

Baroness Hamwee

"We are concerned about the cost of home information packs, particularly home condition reports. We are concerned about it where the property is of low value-if that is not an absurd term to use in today's housing market-or, at any rate, of comparatively low value. We are concerned about the cost where the purchaser is at the limit of what he or she can afford and may not, as things stand now, choose to have a survey.

"A lot of people borrow a very large proportion of the price in order to purchase; for example, young people who are desperate to get on the housing ladder and families who need a bigger property because the family is growing. We are concerned about the cost where there is a family breakdown and there is no cash to be thrown around. We are concerned about elderly people who are on an average pension. All those people would struggle with the cost even if it were deferred.

"Agents may bear the cost in the first instance, but they are not charitable organisations. Why should they be? They will claim ownership of home information packs and the intellectual property rights in those packs. They will not hand them over to a seller who wants to change agents-quite possibly for very good reasons."

Lord Donaldston

"The structural condition of a flat is of no concern either to the sellers or to a buyer because, as is customary in these cases, the owner of the freehold or a superior lease-holding landlord bears the cost of all repairs. While it is perfectly true that that cost filters down to the individual owners of the flats, it does not do so individually. So nothing would be gained by commissioning a survey of the particular flat.

"There may be 20 other flats all in the same group to whose upkeep any individual flat owner would have to contribute. It would be ridiculous for the sellers of an individual flat to seek to get a survey of the whole block, and it would be equally stupid for the buyer to try to do so.

"(In addition) the process of putting a property on the market usually starts with someone having a notion that they might or might not want to sell, and going to see an estate agent to take professional advice on the saleability of the property, the kind of price it might fetch and so forth.

"I in turn probed this (proposal) on all sorts of matters. However, the answer was always, "We are still negotiating"; but ultimately the response was, "It is all an act of faith". There were at least four Bishops in the Chamber last time, so perhaps that was more appealing."

Baroness Hanham

"It is extremely unlikely that the purchaser will be able to rely on these packs-particularly on the home condition report which, at the moment, is not acceptable even to mortgage lenders. Not many purchasers rely on a mortgage lender's survey-surveys are carried out for different reasons-and, if they do not do so now, they are not going to rely on a home condition report. As a result, they will end up paying for the home condition report and for an additional survey.

"The only thing that (the sellers' pack) is having an effect on it at the moment is the increase in interest rates, which is beginning to depress the housing market as we speak."

The Earl Of Caithness

"Another concern about the home information packs is that there is no restriction on where the information will go. There can be no control at all on what happens to the contents of a home information pack.

"What happens with regard to companies doing damp-proofing? What about companies providing electricity or gas to one's house, or even builders? If they set up their own team of people to do home condition reports, they will have a huge commercial market advantage. If a builder sets up a team of people to do home condition reports, his work will increase substantially.

"It is a wonderful ploy for people to make a lot of money but with no benefit to the consumer."

Lord Selsdon

"My Lords, I get the feeling that I am one of a group of naughty children complaining that Nanny has said we should not do this and that we might be smacked. No one on the other side seems prepared to go into bat with the noble Nanny-I mean, the noble Lord, Lord Rooker.

"I asked myself what I would regard as relevant information if I were Secretary of State. I asked people who are good at selling houses. Included in the sort of things that are considered relevant information these days are health and safety.

"For instance, does anything near the property let off more than one decibel of noise, including aeroplanes that may go over, or rat runs in the morning? These are the sorts of things that people want to know. Is there a bus route nearby that is safe for children to get back on? If you want to sell a house, you produce all the favourable information you can and then produce what the estate agent or lawyers require of you.

"Last time I spoke I emphasised that it was the lawyers who hold everything up. In general, when we do our own conveyancing, we do it within 24 hours. What happens with the legal brigade is that they write to each other; they cannot communicate and then say that they have been in touch-got a fax but not got one back. They delay everything.

"People who do not understand the legal profession think that something has gone wrong. They get extraordinarily nervous and wonder, "Is it going to go through or not? Can we proceed with buying our house?" That is part of what I would call private sector bureaucracy.

"My final tip to your Lordships is, if you really want to sell your house, as you know, you put some warm bread at the back of the house as they do in supermarkets and put on some fresh coffee-which should be Arrabiata. That smell makes a friendly environment and covers up the smell of the dog and everything else. We should be enjoying this debate and not worrying.

"The Minister's heart is in the right place; unfortunately his soul has been misguided."