The government has defended its plans to introduce anti-gazumping legislation and the controversial seller's packs for home owners.

On Monday MPs debated the government's plans to force people putting their home on the market to produce seller's packs, costing £400 - £700 each. The measure, contained in the Homes Bill, received criticism from some Labour MPs - particularly from the north of Britain - who are unhappy about the proposals. They argued it would hit deprived areas where homes valued at only around £7,000 to £10,000 can take years to sell. Those who refuse to include a survey, including private sellers and estate agents, would face fines of up to £5,000.

The seller's pack would include title documents, replies to preliminary enquiries and any planning, listed building and building regulation consents. Warranties and guarantees for work carried out on the property would be included, together with a draft contract, replies to local authority searches and a home condition report based on a professional survey.

Housing minister Nick Raynsford defended the Homes Bill as an important measure that would tackle the "evil of homelessness". He told MPs that the sellers pack would have most effect "in the time between offer and acceptance and exchange of contracts. This narrows the window during which gazumping and other problems currently occur."

The bill also extends priority need for housing to new groups of vulnerable people, including 16 and 17 year-olds leaving care, people leaving prison and the armed forces, and single people fleeing violence and harassment. Local authorities will be required to carry out reviews of homelessness within their area and to publish a homelessness strategy based on the result of the review. Raynsford defended this saying: "The measures do not allow prisoners to jump the queue. They offer a safety net for those who would otherwise end up on the streets."

Conservative housing spokesman Nigel Waterson attacked the government saying: "It is a sad fact of this parliament that we have spent hours debating gay rights and fox hunting while the needs of what Lord Falconer would call ordinary people are driven to the back of the queue."

A spokesman for the Council of Mortgage Lenders said: "The house condition report is the point which is causing us the most concern, as it is still unclear who should be employed to carry it out. More work is needed."

Trevor Kent, former president of the National Association of Estate Agents, warned that the scheme could be a vote loser for Labour. He said "A house selling system that might cost two million people a minimum of £750 each may change their voting intentions."

Shelter described the plans as a "major breakthrough". Director, Chris Holmes, said: "This bill could make a huge impact on how many people suffer the misery of homelessness. Giving those most at risk a better chance of finding and keeping a home would be a massive step forward."

The Salvation Army, which runs 50 residential centres around the country, also welcomed the bill. Captain Bill Cochrane described it as "a significant step forward, particularly the requirement for local authorities to be more strategic in their approach".