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Page 107 Annex HIPS are happening Speech by Yvette Cooper MP at the second Association of Housing Information Providers Spring Conference on 18 April 2007. Introduction Thank you to Mike Ockenden for the introduction. With just six weeks to go until the introduction of Home Information Packs (HIPs), this is an important time to set out the government’s approach to reform of the house buying and selling process - in the interests of consumers, and the environment. Communities Secretary, Ruth Kelly has made clear that HIPs including Energy Performance Certificates will be introduced on 1 June. They will help home owners cut fuel bills and carbon emissions from their homes. And they are part of a process of reform of home buying and selling to introduce greater speed, transparency and competition to cut costs and improve services for consumers. Most people recognise that reform is long overdue. The home buying and selling process has barely changed for a generation. Other industries and markets have seen substantial changes driven by competition, consumer expectations, new technology and innovation - driving down costs, improving efficiency, increasing the range and variety of services, and speeding up the process. Not home buying and selling. In fact the reverse has happened. In many areas the overall cost of the industry services you need to buy and sell your home has gone up considerably faster than average earnings. Estate agents fees for example in many areas have gone up in line with house prices – and have doubled in the last ten years as a result. Yet overall services have hardly changed. And the process has got slower too. Instead of productivity improvements and the internet speeding up the process, evidence suggests that it takes longer to move from offer to exchange than ten years ago. The result is that there can be long periods of waiting and delays when sales can fall through, with considerable extra costs, waste and duplication, for both buyers and sellers. And there has only been limited change in response to changing consumer expectations. So for example the growing need and demand for environmental information about homes is not yet being met by the industry. The government believes the current process does not serve homeowners or the environment well. Of course, buying and selling a home may well have always been a stressful experience Page 108 for many of us. But we all know the process could be improved. Lack of transparency and effective competition and innovation mean that consumers can often end up paying more than they should, and coping with far more stress and uncertainty than they should. They also get none of the important information they need about the energy ratings of their home. All that is starting to change. The introduction of HIPs, the establishment of energy performance certificates, the development of Home Condition Reports, the introduction of e- conveyencing, far greater use of the internet; all of these are creating a climate for innovation, change and competition in the interests of consumers and the environment. Many organisations are already innovating and responding to the need for change. Of course there are some in the industry who after a generation of operating in the same way still feel uncomfortable or threatened by change. But change is needed for consumers, and it is important that we see new innovation and competition to deliver home buyers and sellers a better deal. Energy Performance Certificates Indeed the most important element of the Home Information Pack is the Energy Performance Certificate. The challenge from climate change has become increasingly serious. Already our planet is 0.7 degrees warmer than it was a century ago. As the recent Stern report made clear, if we carry on like this there is at least a fifty fifty risk of the planet’s temperature rising by 5 degrees by the end of the century. That’s a big enough increase to threaten major world cities with rising sea levels, devastate crops across entire regions, create millions of refugees and lead to the extinction of iconic species such as the polar bear. The environmental, economic, and social consequences could be devastating. And it isn’t enough to expect other countries - China, India, or the US - to cut their carbon emissions. After all, carbon emissions per person in the UK are three times higher than in China, and four times higher than in India. This country also needs to cut its carbon emissions if we are to persuade other countries to act as well. Therefore, with housing accounting for a quarter of carbon emissions here at home, we need to do more to help householders and home owners who want to improve the energy efficiency of their homes. The home buying and selling industry should seize on the opportunity created by Energy Performance Certificates to do its bit to tackle climate change. From 1 June all homes put on the market will have to have an energy rating - similar to the ratings fridges get. Page 109 For the first time home buyers and sellers will get proper information about the energy efficiency of their home. For the first time they will get proper information about the energy running costs of their homes - one of the most important ongoing bills they will face. For the first time they will get practical advice on how to cut their fuel bills and to cut their carbon emissions too. We get energy efficiency information on our fridges and washing machines, our freezers or our tumble driers. Its about time we had it for our homes - the biggest investment most of us ever make. New research shows this is the information people want. According to You Gov, more than two thirds of people (72 per cent) want more information about the energy efficiency for the homes they are buying. And it could help home buyers cut their fuel bills. The Energy Savings Trust estimates that householders could save around £300 per year as a result of basic improvements to their home. And even if only one in five home owners actually make the basic changes recommended, it could still cut carbon emissions by the equivalent of taking 100,000 cars off the road. For example, every year around 400,000 homes which could benefit from cavity wall insulation are bought and sold in the housing market. Yet many of those home buyers will have little idea that they even have cavity walls, never mind knowing if they need insulating. And how many of us know anything about the lagging in the loft, or the efficiency of the boiler when we buy and sell our homes. Energy Performance Certificates will tell people about the energy efficiency of their homes as well as listing simple steps which can help save money. But we want to go further. We want to make it easier for home buyers to improve their homes too. That is why we are working now to link Energy Performance Certificates with grants and loans - from mortgage companies, energy companies, local councils and government schemes. Already we have been talking to mortgage companies about developing green mortgages, and several have now said they are interested in ways to deliver green finance to help people invest in energy efficiency for their homes. Page 110 And we want to link Energy Performance Certificates to the Energy Savings Trust and the grants and support from energy companies provided through the Energy Efficiency Commitment too. We want to see home buyers with poorly rated homes able to get extra support. From 1 June we want home buyers to be able to get an energy rating as well as easy access to help to make changes that the energy certificate recommends. Average home buyers purchasing E,F or G rated homes should be able to qualify for £100 - £300 support to help with better insulating their homes. Depending on their personal circumstances or the nature of the improvements needed, they may be able to get even more help. And we want to see practical measures to make it easier as well - including one stop shops to get home buyers reliable quotes and ways to get the work done without too much hassle. The Energy Savings Trust already has a network of energy efficiency centres we can build on. But we need to do more. So we will be meeting with energy suppliers, local authorities, the Energy Savings Trust and others - to look at ways to make it easier for home owners who want to implement Energy Performance Certificate recommendations. And we would like to see more innovation from the private sector too to look at ways to help home buyers with their new EPCs. Over time Energy Performance Certificates will change attitudes towards homes and the way we live. Over time Energy Performance Certificates will help people transform their homes to save money and help the environment. And we welcome the strong support for Energy Performance Certificates from environmental groups such as WWF, Friends of the Earth and others. We welcome too the strong interest in becoming energy assessors, with thousands now in training. Latest estimates suggest that 2,500 energy assessors will be needed in June and that 3,000 will be qualified by then with more coming through quickly after. And we welcome the support from consumers who have said clearly that they want energy information about their homes. That is why it is so disappointing that there are still some in the industry opposing energy performance certificates or trying to water them down. It is frankly disappointing to see vested interests placed ahead of the needs of the consumer and the wider environment.

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