Introduced by John Burnett (LibDem, Torridge and West Devon), the Energy Efficiency Bill follows a similar measure which fell foul of opposition from the previous Government and mortgage lenders. Both argued that the cost of carrying out an energy efficiency survey as part of routine surveys - put at no more than £15 - would impose unacceptable costs on lenders (ENDS Report 264, p 28 ).
The new Government also hesitated before giving the new Bill its broad support just before it received its second reading.
The Bill would oblige mortgage lenders, acting in line with official guidance, to provide borrowers with information on the energy efficiency of the home they intend to buy and on "practicable means" of improving it. Borrowers could only be charged the costs "reasonably incurred" in providing the service. The duty would not apply to homes less than three years old or if "equivalent" information had been prepared within the previous 12 months.
Mr Burnett said that 425,000 mortgages are given each year for purchasing homes which are not newly built. Drawing on information on the uptake of energy efficiency measures by householders when provided with advice, he estimated that the Bill would lead to annual reductions in carbon dioxide emissions of 100,000 tonnes. Uptake of the full package of building-related energy saving measures in an average home would save £175 on fuel bills per year.
Junior Environment Minister Angela Eagle acknowledged that the Bill would make a "valuable contribution" to energy efficiency. The costs it imposed would "not be onerous, and the competitive mortgage market will keep costs down. In any event, we think that the costs will be outweighed by the benefits."
However, Ms Eagle went on to demand changes in four areas. Provisions for sanctions against lenders who failed to meet their duties were needed. And the Government does not want the Bill to apply in Scotland, where the house purchasing system is different, or to dwellings other than those used for owner occupation.
Finally, the Government is objecting to a clause requiring the Secretary of State to issue guidance to lenders within 12 months of the Bill's entry into force. The guidance would have to include a list of potential energy efficiency improvements to the property along with indicative costs and payback times, as well as an energy rating for the property. The Government does not want the Bill to specify even this much of the content of the guidance, mainly because of its wider concerns about the slowness of the house-buying process. It also wants to consult on whether energy ratings should be mandatory.