A fundamental requirement is that lending remains prudent. This means that lenders must retain the right to commission a valuation to make sure that a property represents adequate security for the loan. The Government suggests that lenders will usually be able to rely on information contained within the pack, but this will not be sufficient in all cases. Lenders would therefore like to see the right to commission a valuation upheld in the Bill.
Another key issue is the impact the requirement to produce a home information pack could have on the supply of properties coming on to the market. Lenders are concerned that the Government may have underestimated the cost of producing packs and that the proposals could deter potential sellers from putting a property up for sale. So far, the Government has not said how it will monitor the effects of its proposals on the market, but lenders would like to know what plans there are to do this.
Lenders are also concerned about the need to ensure there are enough suitably qualified home inspectors. And at this stage it is particularly important to make rapid progress in two specific areas in order to meet the proposed timetable for implementing the Bill's proposals in 2006:
• Lenders need to be sure now that their information systems will enable them to draw on information contained in home condition reports that will be logged on a central databank.
• They also need an assurance that home inspectors will have suitable indemnity insurance. There is already a shortage of this type of insurance in the market and the CML believes that it will be difficult for a new profession providing a new product - with no claims history - to obtain cover. The CML therefore believes that the Government may have to agree to underwrite indemnity insurance for a period of time.
Commenting on its submission on the Housing Bill, the CML's Deputy Director General Peter Williams said: "We share the Government's desire to make the home-buying process easier, less stressful, more transparent, more certain and faster. But we continue to have major concerns about how the proposed legislation could be implemented. There is an urgent need now for the Government to settle the practical problems raised by lenders that act as a barrier to successful implementation.
"We have been involved in the debate about the introduction of home information packs since they were first suggested but, six years further on, there are still many important practical issues to be resolved. Our fear is that if the proposals are implemented without addressing the myriad concerns, the introduction of home information packs could create more problems than they solve for people buying and selling homes."