ENERGY PERFORMANCE TAX ! 23/07/2010 Home buyers could be forced to pay a higher rate of Stamp Duty if they buy a home with a poor EPC. The proposal would be introduced alongside the Government’s £90bn Green Deal scheme in 2012, by which householders will be offered ‘free’ green makeovers by energy companies, local councils or DIY chains. The UK has to meet legally binding targets to cut greenhouse gas emissions by 34% of their 1990 levels within ten years. The Stamp Duty proposal comes from the Green Investment Bank Commission, an advisory body set up by the Labour government last year. The report says: “Ultimately, either implementing penalty rates of Stamp Duty for houses purchased where the buyer does not implement available energy efficiency measures, or setting minimum standards on properties, will be required.” One idea being considered by the Department of Energy and Climate Change is that people who buy a property with low levels of insulation and a dated boiler would have to pay an extra 0.5% levy on top of the normal Stamp Duty. If they improve the energy efficiency within a year, they would get the money back as a tax rebate. To avoid paying the higher Stamp Duty, a home would need to be upgraded to at least band E on an EPC. However, the proposals have met with heated opposition, with critics complaining that it is a stealth tax and that improving the energy efficiency of properties should not be part of the sales process. John O’Connell, deputy research director of the TaxPayers’ Alliance, said: “Just when the housing market is starting to pick up, it would be madness to throw in a punitive tax like this that could put people off buying altogether. “Requiring expensive upgrades to people’s homes now, when so many people are struggling just to get on and stay on the property ladder, is particularly awful timing. “The idea should be thrown in the recycling bin immediately.” But Marc Blomfield, managing director of The National EPC Company, said the Stamp Duty change would incentivise sellers to make improvements, in order to make their properties more saleable. He said: “Despite scrapping HIPs, the Government has signalled its intention to increase household energy efficiency by retaining the EPC as a required marketing tool. “The Government is committed to reducing carbon dioxide emissions and sees households as the major target.”

MORTGAGE LENDING UP 23/07/2010 News that mortgage lending went up 15% in June has failed to spread even a glimmer of happiness. The Council of Mortgage Lenders said gross mortgage lending last month was £13.1bn, up from £11.4bn in May and a 7% increase from £12.2bn in June last year. James Moss, director of Curzon Investment Property, said the figures were a sign that the housing market is going nowhere, whilst Brian Murphy, of the Mortgage Advice Bureau warned that mortgage lending levels this year will be worse than those of last. Even the CML was not impressed. Its economist, Paul Samter, said: “It represents a seasonal pick-up and is higher than June last year, but is still indicative of low levels of activity. “There are signs of house prices stabilising and more properties coming on to the market following the abolition of Home Information Packs. This may improve liquidity in the market, but transaction levels are subdued and likely to remain so while access to credit remains constrained. “The FSA has outlined a clear direction of travel as part of its mortgage market review. The consultation paper on responsible lending increases the regulatory burden on lenders and could make it harder for borrowers to access credit.” Jonathan Samuels, chief executive of Drawbridge Finance, also sounded gloomy. He said: “Mortgage lending may be up slightly, primarily due to seasonal factors, but in the short term, both the mortgage and property markets remain delicately poised.??“Ever-increasing supply and falling demand, driven largely by difficulties securing mortgage finance, could place downward pressure on prices in the months ahead. There is a considerable financing shortfall that is unlikely to be made up for some time yet.??“People who can secure mortgage finance will be calling all the shots.”

ABOLITION OF HIPS BOOSTS MARKET ? 23/07/2010 Suspending HIPs has boosted the housing market, while their eventual abolition will save the public just under £900m in the next ten years. Eric Pickles, CLG secretary of state, also said there was “joy and happiness” among estate agents “throughout the land” at the demise of HIPs, that he planned to speed up the introduction of e-conveyancing, and that his Government is in favour of house sales, not bureaucracy. However, he appeared to dodge answering a question on how many jobs had been lost in the HIP industry. Here is the somewhat spirited question and answer session in the Commons last week. Eric Pickles: The suspension of HIPs has given a much-needed boost to the housing market. Reports from the industry suggest that the number of new homes coming on to the market has increased by more than one third since HIPs were suspended. We have also estimated that abolishing HIPs could save consumers just short of £900m over the next ten years. Jessica Lee (Erewash, Con): Estate agents in Erewash have conveyed to me their relief at the Home Information Pack scheme being abolished. Indeed, one estate agent has just described the scheme to me as being a complete barrier to people selling their homes. Can the Secretary of State inform the House whether that sentiment is shared by other people working in the housing sector across the country? Pickles: I am delighted to inform my Hon Friend that joy and happiness among estate agents is not confined to Erewash. Throughout the land, there is a general understanding that the drag anchor that HIPs were is no longer a constraint on the housing market. Adam Holloway (Gravesham, Con): What further plans does the Secretary of State have to roll out that happiness and smooth the conveyancing process? Pickles: I am all for spreading as much joy and happiness, and indeed love, as I can, where’er I go. It was clear even from the trials that HIPs were going to be a real mess. We now need to look to the future and at what can be done to speed up transactions. I know that my right Hon Friend the Minister for Housing is looking at ways to speed up the introduction of e-conveyancing. Alan Whitehead (Southampton Test, Lab): Why has the Secretary of State decided, alongside the abolition of HIPs, that energy performance certificates should no longer be required at the point when a house is initially viewed for purchase? Does he intend to downgrade the importance of those as well? Pickles: Gracious, no. Indeed, under our green deal, energy certificates will perform a much more important role. They will be about bringing the price of energy down and ensuring that somebody with a house that has a good energy certificate does well, because we want to get houses on to the market. We will insist that the energy certificate be commissioned and in place before the sale takes place. It is about speeding things up: the Hon Gentleman is not familiar with that idea. We are in favour of house sales, not bureaucracy. Christopher Leslie (Nottingham East, Lab): I am glad to hear that the Right Hon Gentleman thought deeply about the consequences of removing the Home Information Pack arrangement, but in his careful and calculated assessment, did he work out the number of people whose jobs might be affected? Clearly a number of people across the housing market professions have been gearing up to work in that area and will now no longer have that employment. How many people? Pickles: When the Hon Gentleman was in another job, during his brief inter-regnum between spells in this place, he used to advise me solidly to cut away waste and speed things up, and I have followed that advice. HIPs were just part of a service that was provided. We have just heard from Dr Whitehead about energy certificates, and a number of such services are available. It has to be said that it is not as though the removal of HIPs came as a shock. It appeared clearly in the manifestos of the Conservative Party and the Liberal Democrats, and in the Coalition Document