Homes Bill

[back to previous text]

Mr. Raynsford indicated dissent.

Mr. Waterson: I am sure that we shall hear from the Minister in a minute.

I would have thought that my point is obvious. No one on this side of the Committee is saying that seller's packs are a bad thing or that the packs will not inexorably be used more and more. Whether the seller is the developer of new housing described by my hon. Friend the Member for Cotswold or a private individual, it is in the seller's interest to effect a sale sooner rather than later.

People already produce a form of seller's pack. Our objections are that it should not have the force of law, that it should not be subject to criminal sanctions and that it is misleading and unhelpful to impose a requirement that the pack should include what is called a survey report, but what is, in fact, a home condition report—which is much less thorough—and a local authority search. I shall not pursue that point now, because the Committee will discuss the contents of seller's packs later. Boldly eliminating brand new homes from the provisions would have a major effect. We remain to be persuaded of any benefits that would result from including brand new homes in the requirements.

Mr. Tom Brake (Carshalton and Wallington): I am pleased that you are in the Chair, Mr. Gale. I am sure that your presence will help the Bill to pass smoothly through Committee.

It is clear from the comments of the hon. Member for Eastbourne that we are in general-election mode. He focused at length on the so-called secret deal between the Liberal Democrats and Labour, which exists only in his over-heated imagination.

I understand the purpose of the amendments. It is right to ask the Minister to clarify whether derelict and new properties are included in the provisions. However, I do not agree with the hon. Member for Eastbourne. There are many reasons to include new properties, as those who purchase a property, whether it is already constructed or still under construction, are entitled to information about title, warranty, service charges and all the other elements that might be in included the seller's pack.

The amendments focus on the definition of the term ``dwelling-house''. As far as I can tell, it appears nowhere in part I except at the very end, when a wonderfully circular reference is made to the definition in clause 1(3). Was it intended that part I should contain more about dwelling-houses? Can we expect more provisions to be tabled? Is the explanation simply that, during drafting, someone thought the definition would be useful, but no one ever got around to putting anything about dwelling-houses in the Bill? The Minister is smiling, which suggests that my second suggestion is accurate. If so, it pulls the plug on the Conservative amendments, which would amend a definition of a term that is not used in part I except in the circular way that I described.

Mr. Waterson: First, may I take this opportunity to wish the hon. Gentleman's wife well in her confinement? Secondly, will he at least agree that it would be superfluous for a brand new property's seller's pack to include a home condition report, given that an NHBC certificate will be provided?

Mr. Brake: I agree entirely and thank the hon. Gentleman for reminding me that my notes include a comment that a home condition report could well be superfluous for new properties.

Will the Minister explain the purpose of the definition of ``dwelling-house'' in part I? Is not the fact that the amendments focus on that definition, which has no application in part I, symptomatic of the Tory approach to entire areas of policy and campaigning?

Mr. Clifton-Brown: I begin by declaring an interest as one of only two chartered surveyors in the House.

I shall speak principally to amendment No. 32. One of the central features of the seller's pack is that it is bound to increase the cost of selling and buying a home. The argument thus centres on whether the benefit outweighs the increase in cost; only time will tell. We should ask which way that balance tips in respect of new houses—after all, most new houses are built by builders or developers, who usually have severe cash flow problems. Some major housebuilders have announced that they are to merge, which reflects the financial pressures on the major firms of housebuilders in this country. Minor firms that do not have the considerable land banks of the major companies must be under even greater pressure.

I strongly believe that, where possible, one should leave matters to the market and that the nanny state should not intervene. It is much better that a willing buyer and a willing seller agree everything by themselves, with the old principle of caveat emptor applying, than it is to set down a prescription in legislation.

Mr. Waterson: My hon. Friend speaks with great authority on such issues. Caveat emptor is a principle of English law that has stood for centuries. Does he not find it curious that although the Bill subverts caveat emptor, it contains no provision specifically to reverse it?

Mr. Clifton-Brown: I am grateful to my hon. Friend for that important point and I shall diverge slightly from my argument to answer him. He is a solicitor with great experience in conveyancing. The principle of caveat emptor will still apply: however much the nanny state provides seller's packs and everything else, it will ultimately be up to the purchaser to satisfy himself that the contents of the seller's pack are truthful and meaningful.

I shall return to the amendment, which is about the balance between cost and benefit. As developers and builders have a huge incentive to ensure that a sale proceeds as quickly as possible—not least given their cash-flow problems—they will bend over backwards to ensure that the purchaser has every piece of information that he could require as quickly as possible. In my experience of house buying and selling, the developers have in many cases produced the type of seller's pack envisaged in the Bill for years, simply because they want to ensure that such transactions take place as quickly as possible.

I hope that the Minister will reassure the Committee that there will be benefit, especially in the case of new homes. As I mentioned in my intervention on my hon. Friend the Member for Eastbourne, most new homes have a National House Building Council certificate, an especially valuable tool for new houses. For members of the Committee not familiar with the procedure, I should explain that the NHBC produces a guarantee scheme under which, if any defect is found, usually within 10 years, it will supervise the original builder, if he is still in business, to put it right. If he is not in business, the NHBC will step in, find another builder and pay him to do whatever is necessary.

I know of a recent case in which that has happened, as a result of a serious defect in the damp-proof course around a house's windows. I got on to the council, which surveyed the situation and agreed that there was a serious problem and that every window in the house would have to be removed. That involved removing not only the window, but the brickwork on the outside, and all the decoration around every window had to be refurbished after the windows were put back. It was a very extensive and expensive job. The original builder, needless to say, had ceased to trade, so the council had to find another builder. The job was done satisfactorily and the guarantee continues for the remainder of the 10-year period.

A scheme of that kind—and I am not aware of them anywhere else in Europe—is a very positive benefit to anyone who buys a new house. In fact, anyone who buys a new house would be well advised to insist on the scheme before going ahead. There is an overwhelming case for not imposing the seller's pack provisions to purchases to which the scheme applies. I hope that the Minister will pay serious attention to that problem.

I hope, too, that the Minister's departmental resources will enable him to tell us, with reference to these or later amendments, the total compliance cost of part I. After all, that will ultimately fall on the purchasers. My hon. Friend the Member for Eastbourne has mentioned 1.5 million transactions and people should have an idea of how much the Bill will increase the cost of buying and selling a house. There has already been a considerable increase in cost by way of stamp duty under the present Government—one of their many stealth taxes. I hope that there will not be more increases in stamp duty.

Mr. Waterson: Perhaps my hon. Friend could add to his shopping list of inquiries for the Minister whether the Department has held discussions with the NHBC to ascertain whether some of the benefits that the Government anticipate from seller's packs could be incorporated in the NHBC documentation for brand new homes, thus eliminating the duplication of cost and effort to which my hon. Friend has eloquently referred.

Mr. Clifton-Brown: My hon. Friend has raised an eminently sensible point, with which the Minister will need to deal. What discussions have taken place with the NHBC to ensure that the seller's pack and other information provided by the NHBC are compatible? In most circumstances, the developer will need to provide the same home condition information to the NHBC to enable it to certify that the houses are covered by the scheme.

Mr. Raynsford: We have had an interesting opening debate. It got off to a curious start with the right hon. Member for Skipton and Ripon asking me to move seats. As soon as I had done so, of course, the sun went in, removing the cause of his request. However, I feel slightly nervous, because from where I stand, the sun, having passed to the south-west of this Room, came to a position which might have given the hon. Member for Carshalton and Wallington reason to complain that, in the terms used by the right hon. Member for Skipton and Ripon, I had dissolved into a blur. I want to place on the record the fact that I have no intention of dissolving into a blur. If at any stage my position in relation to the sun causes difficulty, I shall be more than happy to move for any right hon. or hon. Member.

Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2001
Prepared 16 January 2001