The Government has committed to delivering 300,000 homes per year by the mid-2020s. At the same time, it does not want to see a deterioration in quality.

As long ago as March 2004, Dame Kate Barker’s ‘Review of Housing Supply’ made several recommendations aimed at service quality. The report highlighted that there was a lack of consumer protection not helped by the approach of builders. The principal problems were:

  • Delays in moving in dates
  • Faults in new homes
  • Poor service delivery after completion and
  • Unfair terms in contracts.

In response to the Government’s threat to legislate and regulate, the industry responded by establishing a number of Consumer Codes. These have been operating since 2008. The majority of new build homes are covered by the largest industry-led code which is the Consumer Code for Home Builders.

While the Consumer Codes have enjoyed some success, it is felt they have a number of disadvantages:

  • The increase in new home warranty providers has led to a proliferation of Consumer Codes.
  • Each Consumer Code prescribe different levels of standards. They also have different forms of redress and sanctions.
  • Most Consumer Codes can expel a builder who fails to achieve the minimum standards. However, the builder could register with a different warranty provider who has a different Consumer Code.
  • Membership of a Consumer Code by a developer is not compulsory.
  • Consumer Codes lack the teeth they require to ensure a builder puts things right.

The Government’s research has shown that consumers are often confused when a dispute arises. They find themselves having to deal with the builder, the warranty provider and a Consumer Code. At present, the only effective recourse for a consumer if the builder fails to put things right, or comply with a decision of the warranty provider/Consumer Code, is to start proceedings in the courts. The Government has concluded that when something goes wrong, particularly after completion, the balance of power is heavily weighted in favour of the builder.

Therefore, the Government has launched a consultation seeking views on the introduction of a new Housing Complaints Resolution Service and a New Homes Ombudsman. The consultation will conclude on 22 August 2019. The consultation can be found here - Redress for Purchasers

The aim of the Government is to create a new Housing Complaints Resolution Service. It will:

  • treat consumers in a fair and balanced way when they have a complaint;
  • provide access to an independent service which is free to use;
  • provide a simple and effective access to redress;
  • make binding decisions that a builder has to comply with; and
  • provide helpful information and guidance.

The consultation seeks your views on the following areas

  1. The role of a New Homes Ombudsman;
  2. The requirement of developers of new homes to belong to a New Homes Ombudsman;
  3. The number of Ombudsmen;
  4. Access to a New Homes Ombudsman;
  5. Standards of a New Homes Ombudsman;
  6. Scheme Provider and Approvals Process;
  7. Funding a New Homes Ombudsman;
  8. Powers of a New Homes Ombudsman;
  9. Geographical Scope;
  10. A Code of Practice for developers of new build homes; and
  11. Enforcement

Consumer satisfaction survey results show higher levels of satisfaction for leaseholders of new builds developed by housing associations compared to private developers. Such leaseholders also benefit from the housing management and customer service teams within housing associations who maintain longer term relationships. Nevertheless, these proposals will affect housing associations and you are encourage to respond to the consultation which closes at 11.45pm on 22 August 2019.