Homes Bill

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Mr. Don Foster: The hon. Gentleman gives the answer that I was expecting. I am grateful for his clarification about the smallholding. For the record, will the Minister comment briefly on the case of a farm that is being sold which comprises a large number of outbuildings, the condition of which will, presumably, not have to be studied in the same depth as properties in which people will live? The buyer will want a great deal of information on the condition of such farm buildings, but will they be excluded from the detailed condition survey?

Mr. Raynsford: Where a sale involves farm premises, which are all part of the farm enterprise, they will be exempt. If, however, a farmer possesses residential property and chooses to sell it independently with vacant possession, the normal requirements will apply. If it is part of the farm enterprise, it will be exempt. For those reasons, the amendment is not just unnecessary but unhelpful, and I hope the hon. Member will withdraw it.

Mr. Loughton: The Minister's point about exemptions on new properties being detrimental is well taken. We debated that earlier, which is why my hon. Friend the Member for Eastbourne said that this was a probing amendment.

Before fashioning the legislation and putting it before the House, did the Government properly assess the scale of the problem posed by properties at the lower-end of the market? On Second Reading we heard from many Labour Members, in particular, the hon. Members for Workington (Mr. Campbell-Savours) and for Burnley (Mr. Pike). The hon. Member for Burnley said that his constituency has more than 3,000 empty properties and the bottom has fallen out of the lower end of the market. The hon. Gentleman would maintain that a good portion, if not all, of those 3,000 properties may be valued at less than £10,000, and the same is true of many properties in other former mining areas.

Last year, 660,000 private residential sales—more than 40 per cent. of all private residential sales in this country—were sold for less than £60,000, and so did not attract any stamp duty. That is large portion of the market, and many of those 660,000 may have been below the imaginary £10,000 threshold. Given the potential size of the problem, and the stigma of whatever exemption the hon. Gentleman may be considering, the matter should have been thought about long before the legislation came before the House. It is not a new phenomenon. It is not as though the property market has suddenly gone down; if anything, it has moved up. Certain metropolitan boroughs, particularly in the north of England, suffer from a lot of low value property.

The Minister has ruled out broad-brush council band A proscribing, as recommended by his hon. Friend the Member for Workington, which is probably right. Surely whatever solution he eventually comes up with, however soon that is after all the detailed work that we are told that went into fashioning the proposals, must lead to a degree of blight on the classification of those properties, which will fall below the threshold, however, he qualifies that.

All the other exemptions to which we have referred—between family and friends, for commercial property, or whatever—are for perfectly good reasons, and do not reflect on the integrity of the property or the area in which it is located. The provisions will lead to a degree of postcode blighting, which will simply reinforce the Opposition's view that the proposals are ill-thought out and have been rushed through. A large segment of the market will be detrimentally effected in terms of cost, but if they are not included within the scheme, they will be blighted and the implications that that will have on the values of their properties will be an even greater cost. Few of those involved will be inclined, or indeed able, to bring their properties to the market and attain a decent price for them. As my hon. Friend the Member for Eastbourne said, this goes to the heart of the legislation's inconsistencies and flaws. I hope that the Minister will not underestimate the scale of the problem, given the number of low-value properties in this country, to which I have referred.

Mr. Geoffrey Clifton-Brown (Cotswold): I wish to probe the Minister on a different point. It may be in order under this amendment, but if may be more in order under amendment 29.

What standard is required of seller's packs? I understand that the Bill does not alter the dictum of caveat emptor, and it would be up to the purchaser or his solicitors, or advisers to check the content, accuracy and completeness of the seller's pack. To what standard is the vendor expected to produce the pack? In normal property transactions, purchasers make a number of inquiries and, having considered them, will make further requisitions and inquiries, until they are fully satisfied that they understand all the variations of a particular property. It is impossible for a vendor to imagine precisely what a purchaser might want when he is producing the seller's pack. This area will give rise to huge arguments, and perhaps litigation, in the future. I wonder whether the Minister can give us some idea of the standard to which these reports are expected to be produced.

The Chairman: Order. It is inevitable in discussions of complex matters such as these that there is an overlap of material. My view is that those comments relate more to matters arising under amendment No. 29. However, if the Minister wishes to deal with them now, he may do so. If he chooses to wait until the broader issues that arise under amendment No. 29, I am sure that the Committee will understand.

Mr. Clifton-Brown: On a point of order, Mr. Gale. It may be more convenient for the Minister to reflect on this matter and see whether further thoughts come into his head. Perhaps we should deal with it under the later amendment.

The Chairman: I allowed the hon. Gentleman to complete his remarks because, having got halfway through them, it seemed sensible to put them on the record.

Mr. Raynsford: It will probably be easier to deal with that issue when we are discussing the content of the home condition report. I can assure the hon. Gentleman that we have given some detailed thought to this matter and have had a thorough briefing. I do not need any further reflection or to wait for further ideas to come into my head. As hon. Members can see, I have with me some extremely detailed work that has already been prepared. I will be happy to share it with the hon. Gentleman later.

I can tell the hon. Member for East Worthing and Shoreham that we had anticipated the low-value problem. We commissioned research in Burnley and Bradford to test the views of buyers, sellers and professionals involved in the process in two defined low-value areas. The research showed that the buyers, sellers and professionals thought that there home condition reports were relevant and had some use in low-value areas. As I have said many times, someone buying a low-value property has most to lose if it requires an unforeseen and expensive repair that might cost more than the total value of the property. For that reason, we are reluctant to make widespread exemptions.

The hon. Member for East Worthing and Shoreham seems to have confused two different concepts. He confused the limit for stamp duty payments of £60,000 with a definition of low value. There is no question of us adopting the figure that he mentioned—a £60,000 limit—as a definition of low value. This point was made forcefully by my hon. Friend the Member for Burnley, who said that he had come into the debate thinking that a band A council tax level might be appropriate but had reflected and realised that it would go too wide. It is certainly not our intention to cover anywhere like that number of properties.

Mr. Clifton-Brown: I do not wish in any way to be rude to the Minister. I should like, for the third time, to raise a point that I made in an intervention on Second Reading and in Committee. Inevitably, parts of the seller's packs will be time limited. Despite what the Minister has said in the past, there will have to be a time limit on the survey. There will be probably be a time limit on the local authority searches and the pre-contract inquires. It is the low-value properties that will perhaps take longer to sell. If the whole of, or part of a seller's pack needs to be redone, that will incur additional costs. The burden, therefore, could potentially be greater on low-value properties than on higher-value properties. I should be grateful if the Minister would consider that point seriously and let the Committee know his intentions.

Mr. Raynsford: The fact that there might be special difficulties in disposing of properties in some extremely low-value areas was debated at length. Having visited areas such as Warsop Vale and Bassetlaw, I readily conceded that I could see the problem. The problem is that the market has collapsed and there is no demand in those areas—not that the prospect of the seller's pack was creating a difficulty. I could see that problem, which is why I was prepared to consider this exemption. The hon. Gentleman knows from his knowledge and understanding of these issues that market conditions ultimately determine the speed at which a property sells. During the recession which was created by the former Government in 1990-91, properties did not sell because of the market. It did not matter whether they were high, medium or low value. Our objective is to ensure a healthy market in which properties will sell timeously.

May I say to the hon. Member for Loughton—I am sorry.

Mr. Clifton-Brown: The hon. Gentleman is not an Essex man.

Mr. Raynsford: I apologise, Mr. Gale. I was carried away by my tour around the country and I inevitably came to Essex. I can see that interesting county when I look across the Thames from own patch in south-east London. When I walk along the Thames and see the other bank—Essex is there.

I must apologise to the hon. Member for East Worthing and Shoreham and return to his point, which is that a large segment of the market could be affected. I want to stress that we are talking not of the kind of exemptions that would affect a large segment but of exceptional circumstances, with exceptionally low-value properties, where there could be a problem. There would be no question of postcode blighting, because we would not be adopting such criteria. In circumstances where there are very special problems, we are prepared to give further thought to the matter, as I undertook to do on Second Reading.

I hope that that answers hon. Members' questions and reassures the Committee that this is an entirely sensible and consistent approach which we have adopted all the way through to ensure that the benefits of the seller's pack are widely available. We will not apply it in such a rigid way that a seller's pack is required in circumstances where would be inappropriate, for example, new properties covered by warranties or special circumstances in areas of exceptionally low value, where an exemption might be justified. We will consult fully before final decisions are taken on the latter point.

I hope that Opposition Members are satisfied and will agree to withdraw the amendment.

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