MeritsPressNotice01052007

Immediate Tuesday 1 May 2007

Contact: Owen Williams 020 7219 8659

HOME INFORMATION PACKS - GOVERNMENT NEED TO DO MORE TO ENSURE POSITIVE RESPONSE FROM MARKET - LORDS COMMITTEE

The House of Lords Merits of Statutory Instruments Committee has today highlighted the extent of concern in the housing market about the Government's proposals for Home Information Packs (HIPs).

The Government's proposals aim to tackle what it sees as failures in the house-buying process, and have evolved over the last 10 years. It has identified home condition issues as a prime cause of transaction failures, and in its June 2006 HIP Regulations it required Home Condition Reports (HCRs) to be a mandatory element of HIPs.

However, the latest Regulations conform to the Government's announcement in July 2006 that HCRs are not now required in HIPs. The revised proposals have attracted extensive criticism from many property professionals.

Despite this, the Government claims that HIPs as now proposed will bring immediate benefits, from the "up front" provision of information needed to progress home-buying. It also looks to HIPs to stimulate longer-term innovations in the market.

The Merits Committee has received comments on the proposals from interested professional groups. It has rarely seen such widespread opposition to proposals set out in secondary legislation.

Lord Filkin, Committee Chairman, commented: "After dropping HCRs as a mandatory element of HIPs, the Government describe their proposals as a limited regulatory intervention which they expect will stimulate the housing market towards wider innovation.

"But the comments which we have received from key stakeholder organisations in the housing market are striking in the strength of their criticisms.

"Such comment may not invalidate the purposes of the Regulations, but we believe that the Government need to take such criticism seriously and to do more if the market is to respond positively."

The Committee also comments on the Government's decision to link the production of Energy Performance Certificates (EPCs) to the issue of HIPs. This decision means that many EPCs will have to be updated more often than every 10 years, as specified in the European Directive which requires them to be introduced.

Submissions to the Committee have seriously questioned this approach to implementing the Directive. The Better Regulation Commission commented that there is a lack of evidence to justify the approach. The Government argue that such "over-implementation" is desirable, but the Committee has not yet seen adequate evidence to support this.

In its report on the Home Information Pack Regulations 2007 (SI 2007/992), and the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007 (SI 2007/991), the Merits Committee draws attention to the way in which the Government have developed their revised proposals for HIPs over the last year. In particular, the Committee questions whether the HIP Regulations "may imperfectly achieve their policy objective" of making the home-buying process significantly easier and more transparent. It also questions whether the Energy Performance Regulations "may inappropriately implement European Union legislation".

Notes to Editors

1.The Committee report is published by The Stationery Office as HL Paper 92. It is available online at: http://www.parliament.uk/parliamentary_committees/merits.cfm

2.The Committee took oral evidence from officials from the Department for Communities and Local Government on 24 April 2007. A transcript of this session is included in the report.

3.The House of Lords Merits of Statutory Instruments Committee was established in 2003 and began work in April 2004. Its task is to examine each statutory instrument presented to the House and to draw attention to any which deal with matters of significant public policy interest or show defects in certain areas. The Committee's Reports are intended to inform the scrutiny process of the House of Lords, without seeking to determine what view the House will finally take of individual instruments.

4.The current members of the Merits Committee are :

Lord Filkin (Chairman) Lord James of Blackheath

Baroness Adams of Craigielea Lord Jopling

Lord Armstrong of Ilminster Baroness Maddock

Viscount Colville of Culross Baroness Thomas of Winchester

Baroness Deech Lord Tunnicliffe

Viscount Eccles

For copies of the report please contact Owen Williams, Lords Press Officer, on 020 7219 8659.