Homes Bill

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Mr. Clifton-Brown: I am sorry to interrupt the Minister's dinosaur peroration, but will he respond to my point about the number of competent people available to produce the home condition report?

Mr. Raynsford: I was about to come to the points raised by the hon. Gentleman and by the hon. Member for Bath, but I was covering the issues relating to consultation in amendment No. 1 before dealing with amendment No. 2, which covers the reliability and standard of the report.

We have involved the Consumers Association and all the major professional bodies in the development of the consultation proposals. Those bodies are members of the advisory group that has helped to steer our research and is helping us to prepare implementation. They include the Consumers Association, the NAEA, the Law Society, the Council of Mortgage Lenders, the Royal Institution of Chartered Surveyors, the Council for Licensed Conveyancers, the Local Government Association and the Land Registry. We have no problem with full and proper consultation.

We fully share the intention behind the amendment, but the difficulty is that such a general duty to consult is not just meaningless but is potentially unhelpful. For example, it would leave the regulations open to challenge by any body which might claim to have an interest, however remote, and which had not been consulted. The amendment would leave that risk of challenge very present. Therefore, I hope that Opposition Members will recognise that there are good reasons for not accepting the amendment, but I hope that they will also accept that we are utterly committed to consultation.

With regard to amendment No. 22 in the name of the hon. Member for Bath, clause 8 provides that regulations made under clause 7 may make provisions for a report on the physical condition of the property, and that is the home condition report. Clause 8(6) allows the Secretary of State to require or authorise an approved certification scheme to contain provision about any matter relating to home condition reports. That provides an effective way for the Secretary of State to ensure that the interests of all the relevant parties are taken into account, including lenders and consumers. There is no need to single out particular stakeholders as proposed in this amendment. It would be dangerous to do so, as that could effectively give the named group a right of veto over the format of the home condition report.

Because it is necessary to satisfy a range of different interests, I hope the hon. Member for Bath will accept that, while we do not accept the wording of his amendment and hope that he will agree not to press it, the principle behind it is one that we wholeheartedly support. It is our earnest intention to ensure that the procedures for carrying out the inspections leading to the home condition report will give lenders the confidence that they require to rely on that report for valuation purposes. This will significantly reduce the cost to buyers of any charge that is made by lenders for the valuation process.

Mr. Don Foster: So that I can be clear about the strength of the hon. Gentleman's view on this matter, could he tell me whether or not this merits at least a postcard?

Mr. Raynsford: The hon. Gentleman should hold his horses. He may have other opportunities to send a communication to the wife of Bath which may contain stronger news than that the Government had accepted the spirit, if not the wording, of this particular amendment.

The CML is among those represented on the group of stakeholders assisting in the development of the home condition report. It is well placed to ensure that the interests of lenders are given proper consideration. That is very important and I welcome its active involvement. A key objective is that the home condition report should meet its legitimate needs and be trusted by it. On that basis, I hope that the hon. Gentleman will agree not to press his amendment No. 22.

The hon. Member for Cotswold raised two particular issues. The first concerned the standard of the report, and the second the number of surveyors necessary to carry out inspections. We are dealing with a report that will provide a level 2 inspection, a mid-range inspection, which is the broad standard applicable currently for the home buyer survey and valuation. In a number of respects the home condition report will be superior to the home buyer survey and valuation. It will be prepared in a standard form with consistent reporting and therefore will achieve greater objectivity. The caveats and limitations will be specified in a standard format, reducing the scope for individual valuers to undermine the value of the report by setting conditions or caveats themselves that might be difficult for individual members of the public to understand.

The electronic format will aid completion and transmission of the report, and—this is crucial, and as an experienced valuer, the hon. Member for Cotswold will understand the importance of this—there will be rigorous monitoring, auditing and validation of reports because all reports will have to be registered. There will be a mechanism to scrutinise reports to identify the possibility of soft reporting by individual valuers, which can then be investigated.Therefore, a good standard will be provided for the public. I would be happy to undertake to circulate further details to all members of the Committee if that would be helpful.

On the question of numbers, the figure mentioned by the hon. Member for Cotswold was slightly misleading. The people who qualify under a certification scheme will have to be sufficiently qualified to carry out the work to a necessary standard. Based on current transaction levels, we estimate that some 9,000 inspectors will be needed. The industry already employs about the same number of general practice surveyors, who are dedicated to residential practice and are expected to be interested in this work. Those surveyors currently undertake a variety of roles, including agency, as well as surveying and valuation, but it is anticipated that the industry will realign itself in response to demand for home condition reports. In addition, there are 3,000 RICS building surveyors, the number referred to by the hon. Member for Cotswold, who have expressed interest in undertaking the work. Members of other professions are interested, including those from the Architecture and Surveying Institute, the Chartered Institute of Builders, the Association of Building Engineers, the Institute of Structural Engineers and the Institution of Civil Engineers.

I hope that the hon. Member for Cotswold will recognise that we do not believe that there will be a problem with numbers, but that we recognise that it is important to allow sufficient time for all those people to acquire the necessary skills and training to be able to meet the rigorous standards required for accreditation. That is why it is necessary and appropriate to have a two-year period before the introduction of the scheme.

I hope that that allays the concerns of the hon. Member on the standard of the report and the number of surveyors required. With those assurances, I hope that hon. Members will not press the amendments.

Mr. Clifton-Brown: I am not sure whether the Minister is giving way or whether I am to make a speech. A separate speech suits me rather better, as I will not have to be quite so concise—[Interruption.] It is in my nature to be so.

The Minister might like to consider—he does not have to reply now—that one of the problems involved in buying and selling properties is the financial offer. Even after all inquiries and the information provided by the seller's pack, there would still be the problem of purchasers obtaining a financial offer. It has been suggested to us that property transactions could be speeded-up by involving the mortgage industry and other financial lending institutions in a pre-certification scheme. A decision could be made on whether to offer a loan on the basis of the seller's pack. Such institutions could decide, in principle, particularly in the case of new property, to lend a certain amount on a particular property. That could be extended to insurance as well so that one would know that insurance would be provided and the approximate cost of the premium. If we could incorporate such a mechanism, we really would begin to make a step change in the rate at which properties are bought and sold.

Mr. Raynsford: I can say two things to the hon. Gentleman. First, we believe that there is merit in potential buyers establishing their mortgage potential in advance. That would help to speed up the process and give reassurance to any seller who had doubts about their ability to pay for the property. There may be a case for seeking in advance from the lender an in-principle view on the willingness to lend on certain types of property. As the hon. Gentleman will be the first to recognise, we then move into more difficult territory because, in most cases, the lender will be cautious about giving such an indication without having had an opportunity to establish an informed view about the value of the property and its condition. Therefore, my guess is that a lender might be unwilling to give an indication to which one could attach much weight, unless there had been a previous opportunity to view the property, perhaps as a result of a previous failed transaction or if the property had recently changed hands. We are certainly sympathetic to the principle of securing more advance information to enable people to move with confidence and to reach a quick decision.

Mr. Waterson: I have no intention of asking leave to withdraw the amendment. The Department seems to have a house style for Ministers trying to get out of tight corners by bluster alone. When a Minister starts talking about a ``farrago of innuendo'' and using a lot of other words in the same sentence ending in an ``o'', we know that he is on the ropes.

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