Parliamentarians gathered with developers and stakeholders to welcome new Code of Practice for builders and an independent Ombudsman for consumers.
UK consumers buying a new build home will benefit from increased protections in the event of any issues they have with their property or disputes with their developer, thanks to a new system launched by the new Housing Minister Rt Hon Lucy Frazer KC MP in the Houses of Parliament today.
A new code of practice will put significantly more requirements on builders in terms of how they treat their customers and deal with any complaints, whilst a new, totally independent Ombudsman service will provide redress for customers in the event of a dispute.
The New Homes Quality Board (NHQB) will oversee the new Code that puts consumers at the heart of the new build process.
In the vast majority of cases, homebuyers are well served by their developer and are happy with their purchase, with 91% willing to recommend their builder to a friend. But, given the nature of buying a new home, the largest purchase most people will ever make, the impact if something goes wrong can be significant. With current protections not always considered to go far enough, the NHQB has moved to improve this for customers.
The new Code ensures that every aspect of a new home purchase, from initial visit to the sales office to the end of the two-year warranty, is covered. It also requires developers to have an effective aftercare service in place to deal with any issues as well as a robust complaints process that responds to customer concerns in a timely manner and to their satisfaction.
The new code:
- Protects customers, prohibits high pressure selling; requires any deposits the customer pays to their builder to be protected.
- Requires developers to provide all relevant information about the home during the sales process – allowing them to make an informed decision about their purchase.
- Sets out requirements for a fair reservation agreement, including a ‘cooling off’ period; and sales contract requirements.
- Allows customers to engage a professional to carry out a pre-completion inspection of their home on their behalf.
- Specifies that a home must be ‘complete’, preventing developers paying customers to move into a new home early.
- Replaces the large number of previous codes, hence simplifying and boosting consumer confidence
Over 140 developers are now registered and are working with the NHQB to ready themselves to follow the first builders to go live. The scheme will initially cover England, Wales and Scotland, and ultimately the whole of the UK. Those that are signed up to the scheme will display the NHQB and Ombudsman branding. Launch events were held in Cardiff and Edinburgh last week with Welsh and Scottish developers welcoming the reforms.
The government has committed to oversee the introduction of a statutory Ombudsman and, through the Building Safety Act, now has the powers to do so.
Speaking at the Parliamentary launch event, Housing Minister Rt Hon Lucy Frazer KC MP, said: “Increasing homeownership is a key part of the Government’s agenda and delivering a better experience for buyers of new homes across the country is a central part of this. It was a real pleasure to attend the launch of the New Homes Quality Code and Ombudsman. This is a step-change for homebuyer protection and I would like to thank everyone that has made this possible.
“I know how much work has gone into delivering this, over a number of years, and I welcome the leadership of the New Homes Quality Board to drive this forward. The sector has a real opportunity to give buyers more assurance and improve the quality of service and build and we would urge them to embrace this opportunity and register with the scheme”
Natalie Elphicke MP, founding chair of the New Homes Quality Board, said: “It has been very worthwhile to be involved in getting these new build reforms off the ground. I have no doubt that consumers and house builders will both benefit from these reforms to the housebuilding sector - to begin to tackle the scourge of shoddy homes, together with a new homes Ombudsman to deal with disputes.”
Leon Livermore, chief executive of the New Homes Quality Board, said: “Buying a new build home is a massive moment in people’s lives and it ought to be a happy and memorable experience. The vast majority of those buying new build homes are satisfied with their purchase and their builder, but in too many instances in the past that has not been the case. This new framework aims to drive up standards of construction and customer service and puts the buyers’ interest at its centre.
“Whilst we recognise that the process of building and selling a new build home is a complex one and things can go wrong, in those instances we want to ensure builders respond quickly and customers have access to independent redress.
“I welcome the fact that over 140 developers have already registered with us. Now I’d encourage those that have yet to do so to get on board rather than be left behind. Being registered with the NHQB will provide a builder’s customers with confidence in them and their product.
“Consumers can be assured that, where they see our branding, their builder should be working to the new high standards our code demands of them or they can take their case to a strong and independent Ombudsman.
“I firmly believe that the new framework will drive up standards, improve the experience and increase consumer confidence, providing benefits for consumers and builders alike.
“Consumers can buy with confidence knowing any issues that do arise will need to be rectified quickly by their builder and that they have the new Ombudsman as a backstop, able to enforce a resolution of the issue if they decide that there has been a breach of the Code.”
The New Homes Ombudsman, Alison MacDougall, said: “The New Homes Ombudsman Service (NHOS) will have a strong role to play in ensuring that consumer complaints about the experience of buying a new home are dealt with independently and effectively. We aim to contribute to the promotion of best practice within the sector, and to identify issues arising from complaints which may merit further consideration across the industry.
“Consumers can expect to have their issues investigated efficiently and effectively and a number of redress outcomes are available for cases where the NHOS decides that a developer has not met the requirements of the New Homes Quality Code. We are encouraged by the initial industry response to the new Code and the establishment of an independent ombudsman and look forward to working constructively with participants to improve the experience of consumers in such a key event in their lives.”
Stewart Baseley, executive chairman of the Home Builders Federation, said: “The requirements of the new code and framework are hugely challenging for businesses, but the industry is absolutely committed to implementing the proposals and the much greater protections they will provide for its customers.
“HBF initiated the early work that led to the formation of the independent New Homes Quality Board and continues to be supportive of its work.
“The new arrangements will deliver a step change in the approach by industry and lead to even higher quality new homes and better customer service.
“Whilst challenging, the new arrangements will provide all parties, in particular our customers with even more confidence in buying a new build home. Allied to the thousands of pounds buyers save on their energy bills, the protection of the robust new consumer code and access to an independent ombudsman make buying new a really attractive option.”