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New housing red tape will add to cost and stress of moving home
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Reading East home owners looking to sell their house or flat will have to pay £600 under new Government regulations from 1 June.
Rob Wilson Reading East MP warned today that this new red tape could undermine the stability of the housing market in Reading, would increase the costs of moving and would discourage potential sellers from advertising their home. From 1 June 2007, anyone wanting to sell their home in England and Wales will be forced to pay for an inspector to come into their home and produce a Home Information Pack. If they put up a ‘for sale’ sign or advertise their home without a Pack, they face repeated £200 fines levied by town halls. Estate agents are already encouraging home owners to put their home on the market before 1 June, to avoid the need to pay for a Pack. Conservatives are leading the opposition to the new rules in Parliament. Rob explained, “Moving home is one of the most stressful things anyone can do. Yet Labour’s new red tape threatens to make it worse, not better. Rather than protecting consumers in my constituency these new regulations will increase the cost of moving and threatens to undermine the stability of the housing market. "At a time when a number of significant local employers have announced job losses and interest rates have risen, the last thing we need is this additional financial burden.” “The central part of the Home Information Pack, the keystone around which everything else was constructed, was to have a Home Condition Report (a survey of the condition of the house) but that is no longer part of the pack. "The Government should go back to the drawing board, rather than introduce ‘half-baked’ HIPs purely to avoid further Ministerial embarrassment. These Packs will be just an additional burden on home buyers on top of soaring council tax bills and stamp duty.” New red tape to sell your home: The packs, which are expected to cost £600, must contain as a minimum: Index Energy Performance Certificate Sale Statement Title documents for the property Local Authority and drainage searches Insurance and lease details if a leasehold property. Last July, the Government performed a U-turn and resolved to make the crucial ‘Home Condition Report’ (HCR) element of the Packs voluntary. The HCR element - a detailed analysis of the features and state of a property - was notionally supposed to replace valuations and surveys. Flaws on home information packs: · HIPs will not tackle gazumping: Introducing HIPs without Home Condition Reports imposes extra red tape without any benefit. They will do nothing to tackle gazumping or speed up the home buying process – the Government’s original goal. · Valuations, searches and surveys still needed: Even with voluntary Home Condition Reports, buyers would still have to commission and pay for valuations and surveys. Home inspectors are not trained or qualified as chartered surveyors. Buyers will not trust the limited and deficient information in the Pack – and buyers will still need to commission searches on factors like flood risk, subsidence and land contamination. · Destabilising the housing market: The housing market is already under strain and home ownership is now falling; Gordon Brown’s stealth taxes – like stamp duty and council tax – have made owning your own home less affordable. The introduction of HIPs is now the single biggest government intervention in the housing market since Nigel Lawson abolished mortgage interest tax relief. Requiring sellers to spend £600 to put their house on the market threatens to discourage potential sellers, reduce housing supply and push up prices. In the short term, a shortage of trained and accredited home/energy inspectors could lead to a sharp fall in the number of homes being put up for sale after June. · Gold-plating of EU regulation: The Government is now trying to use the environment as a green fig leaf to justify HIPs. The introduction of the Energy Performance Certificates – which Conservatives support – stems from an EU Directive on energy efficiency. The Government’s own Better Regulation Commission has warned that Labour’s implementation is imposing ‘additional administrative burdens without adequate justification’ and ‘goes beyond the requirements of the directive’, with ‘no supporting evidence to justify this gold plating’. In Northern Ireland , the directive is to be implemented without the introduction of HIPs. · Opposition from the housing industry: All the expert bodies with an interest in keeping the property market stable have warned that the Government should not go ahead with these Packs at this time. The country’s solicitors, surveyors, estate agents, builders, banks and building societies are all asking Ministers to go back to the drawing board. A cross-party House of Lords Committee has warned that these regulations are neither ‘sensible or worthwhile’ nor ‘likely to be effective for their declared purposes’. Warning about the new regulation: Surveyors: ‘RICS is concerned about the detrimental impact the introduction of Home Information Packs will have on the market and therefore the economy when introduced on 1 June 2007. We are also concerned at the government's cavalier approach to the legislative process. We do not believe that the current implementation approach will work and in particular we envisage a detrimental effect on first time buyers from rising prices, shortage of supply and abortive cost with little discernible benefit if the policy is introduced in its present form’ (Royal Institution of Chartered Surveyors, submission to House of Lords, Merits of Statutory Instruments Committee, 18th Report, May 2007, Appendix 1). Solicitors: ‘We do not consider that the Home Information Packs Regulations 2007 serve in any way the government's aim of making the home buying process easier and more transparent. They will, in fact, make the process more difficult, much more expensive and remove existing transparency from the market place… There were several methods by which EPCs could have been promoted in a far more cost effective and efficient manner. The government has persistently refused to listen to reasoned and informed argument from major stakeholder in the industry on this issue’ (Law Society, ibid.). Local councils: ‘LACORS does not perceive how HIPs will make the home-buying process easier and more transparent. We do not believe that the introduction of HIPs will prevent the process from remaining fragmented as it will always consist of a chain of buying/selling transactions requiring a number of parties working in conjunction to complete transactions successfully... A good lawyer/conveyancer would always recommend that the buyer obtain searches and other documents, some of which become out of date within 3-6 months, prior to completing on a property transaction, in order to ensure that the information the buyer has is up-to-date. Considering that the seller will have paid for the original HCR and searches and the buyer will have to pay for a survey and later searches, LACORS does not understand how this helps the process’ (Local Authorities Coordinators of Regulatory Services, ibid.). http://www.publications.parliament.uk/pa/ld200607/ldselect/ldmerit/92/9204.htm 15/05/07 |
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