You have said that the Government aims to work with the industry to help with market-led take-up of full home condition reports. You also made the point that mandatory HCRs will remain on the table if the industry fails to make a success of the rollout. How do you see that working in practice? Cooper
Cooper: The Government is committed to encouraging the market-led take-up of home condition reports in order to allow a more flexible rollout that responds to consumer demand and the results of further testing.
We will monitor our trials carefully to look at the best way to promote take-up of HCRs and we will keep monitoring and reviewing take-up after June 1 as well.
We have made it clear that mandatory HCRs remain on the table if the market-led rollout does not work.
Even if HCRs are made mandatory in their present form, most lenders will still require borrowers to have a traditional valuation carried out in addition to the HCR, which will mean a duplication of costs. Can measures be put into place to ensure this doesn’t happen? Cooper:
Cooper:The HCR has been designed in a standard electronic format and it contains much of the information needed by lenders to derive valuations using methods other than a physical inspection of the home.
Lenders are able legally to rely on the HCR, as specified in the Hip regulations. Using the HCR would reduce costs for lenders and consequently consumers and we would expect to see innovative lenders using it for cheaper valuations.
What else could the Government and the lending industry do to ease the way for first-time buyers? Cooper:
Cooper:For a start, we are doing more to help first-time buyers. Our sharedownership schemes will help 100,000 people into home ownership by the end of the decade and our Shared Equity Task Force is looking at ways to expand this even further.
Ultimately though, we need to increase the supply of housing across the board, which is why we are increasing the number of houses being built – a measure which has been opposed by Conservatives for years.
The Department for Communities and Local Government has said that it plans to set up an ombudsman for estate agents as part of ‘the next phase of reform’ in order to strengthen consumer protection. Would you consider full regulation appropriate for this sector? Cooper:
Cooper:We are determined to protect consumers against bad practice and rogue elements in the homebuying and selling industry.
The conclusions of an Office of Fair Trading investigation are that a compulsory licensing system is not necessary so the Government is working to ensure that consumers have access to robust, independent redress schemes.
The Consumer Representation and Choice Bill from the Department for Trade and Industry aims to extend consumer redress for all estate agents’ activities.
The Housing Act 2004 requires all estate agencies marketing homes with Hips to belong to an approved redress scheme which should be in place by June 1 2007.
We are also working towards having a single point of access for all consumer complaints (with Consumer Direct providing this service as part of the Hip area trials).
An ombudsman for estate agents already exists and the Office of Fair Trading has powers to act against estate agents who breach the Housing Act.
David Cameron’s Right to Buy proposal has come in for criticism from a number of sources, with housing charity Shelter warning that it would reducing the amount of social housing but it has been welcomed in other quarters. Where do you stand on right to buy? Cooper:
Cooper:We are committed to helping people into homeownership. Our shared-ownership schemes have already helped 40,000 people towards owning their own homes, with a target of 100,000 by the end of the decade.
We recently launched our new Open Market HomeBuy shared equity scheme in partnership with four major lenders.
But Tory Shadow Chancellor George Osborne has said the Conservatives would pay for shared ownership using some of the money spent on social housing. I think we need more social housing and more sharedownership homes at the same time.
The threshold for paying stamp duty has risen in recent years from £60,000 to £125,000 to reflect the growth in house prices but there has been no upward revision of the higher thresholds of £250,000 and £500,000, disproportionately penalising customers in those price brackets. Stamp duty is also not as progressive as other taxes. Do you think that the levels of stamp duty warrants investigation? Cooper:
Cooper:As a result of threshold increases made by the Chancellor in the last two Budgets, less than half of first-time buyers pay stamp duty and, overall, five out of six homebuyers pay stamp duty at 1 per cent or pay none at all.
In the 2005 Budget, the Chancellor doubled the zero-rate threshold to £120,000, taking 430,000 transactions out of stamp duty entirely.
This year, the Chancellor increased the threshold further to £125,000, exempting an additional 40,000 homebuyers each year from stamp duty.
All tax rates and thresholds are kept under review by the Chancellor as part of the Budget process.