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Sir Nicholas Lyell (North-East Bedfordshire): I am most grateful to the hon. Gentleman for giving way. He has been dealing with the seller's pack and what the Government hope will be of real value to purchasers. One aspect that worries me is the concept of the seller providing a survey--a home condition report. Has he
Dr. Whitehead: I am not sure that the right hon. and learned Gentleman makes as strong a point as he thinks he makes. In my experience, all surveys are hedged with caveats. If one wants to buy a house and be certain of it, one must make a judgment, on the balance of probabilities, as to whether one is buying a 150-year-old house in the middle of a swamp, or a new house on solid land with the remains of a National House-Building Council guarantee.
How one looks at the house in the first instance will determine the extent to which one takes additional belt-and-braces precautions when buying it. That is how the housing market is, and it is reasonable that it should be that way. The Bill does not prevent people from taking precautions. It provides stability at the centre of most people's considerations when they are buying most houses in most circumstances. That is an honourable, if not complete, step forward in dealing with the problems of house purchase that I described.
The Opposition have raised concerns that need to be addressed. In an earlier intervention, I mentioned the possibility that the provisions of the Bill would place the onus on the seller, who might be discouraged from putting the house on the market. If we accept that there will be a change in the way that the market works, and that one seller's pack will be produced for each transaction, I do not believe that most people will be incommoded. There will be a step change at the beginning of the process, but once the dynamic of the process is under way, things will equal out and the one seller's pack will be the bargaining counter of the transaction.
Legitimate concerns have been expressed about low-value housing. The same principle applies--stability will be introduced. Studies carried out in Burnley and other places suggest that a seller's pack stabilises and reinforces the market, whereas exemption from producing the pack would red-line a particular market and make a bad situation worse.
Part II deals with the flip side of people buying their first house and getting on the property ladder. It is easy to characterise homeless people as people in cardboard boxes sitting under bridges, but homelessness involves families in negative equity, families that have broken up as a result of stress on housing, families that have over-extended themselves, families that have lost their homes and were not properly insured, and families breaking up having purchased a council house and being unable to keep up with the payments.
As my hon. Friend the Member for Bethnal Green and Bow (Ms King) pointed out, the reaction of the previous Government was shameful. They tied up the housing market by switching housing underwriting from bricks and mortar to funding for individuals to become players in the rented housing market. They encouraged sales of council houses, even where people could not afford to buy them, by making sure that local authorities provided compulsory mortgages to families on an extension of incomes that would not have been considered by building societies. The
When the difficulties mounted, with all the family problems that I described, the reaction of the Conservative Government was to cap it all by telling local authorities that they should have less regard for homeless people and that they did not have to take seriously their responsibilities towards homeless people.
I am particularly proud that the Government have reversed that through the Bill. We believe that there is a bottom-line obligation on all of us as regards homelessness. We are not prepared to let the logic of the market have its way and to brush those people under the carpet when the market goes wrong. There is an obligation to make sure that homelessness is dealt with and that people get back into the housing market if they can, and at least get a roof over their heads. That is one of the many reasons why I shall support Second Reading tonight.
Mr. Stephen O'Brien (Eddisbury): I was here for the opening speeches, but I apologise for not being present during all the subsequent speeches. I shall address my remarks primarily to part I of the Bill, but, if time permits, I should like to make a few comments about part II. Like most right hon. and hon. Members in the Chamber, most people in the country, and the majority of people in my constituency, my wife and I have been heavily engaged in property transactions over a number of years. In the past 18 months, we have sold a home, rented a home and purchased a home. In response to the hon. Member for Southampton, Test (Dr. Whitehead), sales and purchases will feature in my remarks, as they do in the experience on which they are based.
At the outset, it must be stressed that, in contrast to previous generations, our generation, generally speaking, does not have the same problem as our parents and grandparents, as there is relatively little difficulty in securing funding for mortgages, subject to tests, terms and conditions. In the past, one had to build a financial track record before one could even have access to the market through funding. Therefore, today we live in a true homes or houses marketplace, as funding for homes is not a distorting factor. Certainly, it is something that has to be afforded, and problems are often associated with that, although that is not a determining factor.
We have to be realistic in our approach to the reasoning behind the Bill and the Government's proposals, and accept that we are dealing with a homes marketplace. That is not intended to reinforce, in any sense, the somewhat tendentious point made by the hon. Member for Southampton, Test, who said that the market was controlled by market dogma. I was concerned to hear that three days before exchange, a transaction fell down-- I hope that the hon. Gentleman was referring to the deal, but perhaps it was the property. However, we must remember that every Member in the Chamber represents a different geographic and socio-economic history, and a different current demand for housing and homes in his or her constituency. It is therefore almost impossible to think how one should generally prescribe conditions that should apply across the country or, in this case, England and Wales. It is right to caution that we meddle in the marketplace at our peril.
That is not to say that we should not attempt to do so if specific concerns need to be addressed. However, the cautionary principle on meddling with the marketplace should be borne in mind as we seek to understand how the Government are trying--genuinely, I believe--to address the Bill's objectives, namely, how to put more certainty into the transaction process and how to seek to limit what are perceived as unfairnesses in some ways in which those transactions take place.
It is right to start with the marketplace for homes because the majority of people in this country are owner-occupiers. Furthermore, owning a home combines tackling the need to provide a roof over one's own head and that of one's family with, one hopes--although there is no guarantee--a financial stake in the capital assets of the country by means of a proper private transaction. Most people would seek to make sure that they enter a transaction that is likely to maintain the value of the asset over time, especially as it involves the most significant financial risk of their lives.
As the Minister well knows, my interest in the housing market was stimulated by working for more than a decade in the building materials industry in the United Kingdom and in many countries abroad. Naturally, there is a demand for roofs over heads, but the drivers for building materials are housing transactions. That is the case because it is either shortly before or after housing transactions occur that most of the building materials for repairing, maintaining or improving properties are used. That is important for the UK economy and explains the significance of the process of sale and purchase, which has a knock-on effect not only on the economy, investment and value, but on the quality of housing stock.
I made clear the importance of quality in an earlier intervention. I do not have the most recent statistics, but I know that when I worked for a large UK plc in the sector, this country had the slowest demolition rate in the western world. By one measure, we knocked down a building once every 938 years. In England and Wales, we can see evidence of a culture and passion for things that have stood the test of time, and especially properties, for which a high premium is often paid.
That is why it is important to consider the existing housing stock when examining the aims of part I of the Bill. I refer especially to stock that is more than 10 years old, to which the National House-Building Council guarantee does not apply. Such consideration is especially important as this country has a unique distortion towards older housing stock, which means that an economic and qualitative test must occur.
For that reason, I want to focus on the Bill's provisions on existing and somewhat older housing stock. Of course, certainty is required in a transaction, not least for title and other conditions, but the Bill introduces only one extra item in addition to those available under the current system. That item is the survey, which must be carried out at the cost and risk of the seller. I am surprised that the Government have not sought to address the principle of caveat emptor. We know that the buyer must beware in the marketplace, which must be the right fundamental principle, as it is the buyer who ultimately takes the risk. The survey produced by the seller might help to establish some information that can act as common ground on which offers can be made, but it is more likely that it will not be trusted by most sensible and reasonably informed purchasers. Although an accreditation system is proposed,
The danger of that arrangement is the interest of the expert or professional in question. It would be very nice to believe that all professional approaches will be completely objective and uniform, but we all know from experience in all professions that where there is more than one expert there are likely to be at least two opinions. Under privity of contract, the seller's survey is likely to have a slight--if not more exaggerated--tendency to weigh in favour of the seller's interests.