New homes market must give consumers greater protection

November 30, 2017 / Isla MacFarlane
New homes market must give consumers greater protection

Despite 90% of customers being delighted with their new build home, the housebuilding industry’s reputation continues to suffer. Sales of new builds have fallen sharply this year, as concerns over quality are continually voiced in the press.

The Home Owners Alliance (HOA)’s own research suggests the bad reputation of poor quality new homes is one of the main reasons why twice as many buyers prefer old homes to new ones. However, the overwhelming majority of new build buyers are happy customers, according to the latest HBF customer satisfaction survey.

As a consumer code for new homes is launched, the government is calling to improve consumer redress across the housing sector and the HOA is asking housebuilders to commit to reforms that will help give buyers peace of mind when buying a new build home. Could these tough new measures restore faith in future homes?

Leon Livermore, Chief Executive at the Chartered Trading Standards Institute said, “There’s no doubt that buying a new home is one of the most challenging purchases you can make, with unexpected difficulties along the way. Even the most seasoned consumer can be left vulnerable and unaware of their rights.”

To remedy this, the Consumer Code for New Homes gained approval from the Chartered Trading Standards Institute this week.

“We’re pleased to welcome Consumer Codes for New Homes to our approved code sponsor scheme,” said Livermore. “They’ve proven that they’re committed to raising standards and ensuring consumers are protected, and we look forward to working with them for years to come.”

The Consumer Code for New Homes aims to drive up standards in construction and customer service, recognising that part of that commitment is providing consumers with a voice (and a clear complaints process) when things don’t go according to plan.

Paula Higgins, CEO from HomeOwners Alliance said, “We have more houses being built than ever before, and as government encourages people to buy, quality issues are a major concern. At HomeOwners Alliance we have been calling for greater protection for consumers buying a new build property.

“Consumers find it difficult to know where to go when they have problems and their developers have turned a blind eye in the past. I’m pleased to see protection for new build buyers being brought under the spotlight by the CCNH and I’m certain they will continue to promote a united approach across the industry to encourage the house building industry raise its game.”

At the same time, the government has said it will look at ‘bold options’ to improve consumer redress across the housing sector.

“Purchasing a home is one of life’s greatest financial investments – it is vital that as housing supply increases, the quality of new build homes continues to improve,” Communities Secretary Sajid Javid recently told an audience of housing professionals in London.

Potential measures could include introducing a single housing ombudsman to help provide more comprehensive redress for home owners, home buyers, tenants and landlords.

“We don’t have to choose between building more and building better – we can do both,” Javid said. “That’s why we are looking at bold options to improve redress in the New Year – including whether housing, like other sectors, should have a single ombudsman. This could help drive up standards across the whole industry and increase protections for consumers.

“Currently, there are four government approved providers of redress that cover some aspects of home buying and renting, but not all. Membership of ombudsman schemes is compulsory for some groups, but not for others.”

In the New Year, the government will consult with consumers and the industry, and look at options to explore how the overlap between responsibilities can be improve. This would help to avoid the confusion faced by consumers over where to seek help.

The HomeOwners Alliance is making further calls for reform, citing industry figures which suggest 49 out of 50 new home buyers now report defects to their builder, with one in four reporting more than 16 problems.

The HOA is calling on the government and industry to: give homebuyers the right to retain 2.5% of the cost of the property for six months to give the builder an incentive to repair faults that emerge, or to cover the cost of the repairs if the builder doesn’t do them; give homebuyers the right to carry out a ‘without prejudice’ inspection of their newly built home before moving in.

Paula Higgins, chief executive of the HomeOwners Alliance said, “It’s great the government is committed to more housebuilding. But we don’t just need more houses, we need better quality homes. Too often, new houses are built to low standards, with small rooms, paper thin walls, inadequate heating and poor quality workmanship, with other problems that emerge only after moving in.

“Consumer protection is limited, with people having more rights if they buy a toaster than if they buy a house. Our proposals will go a long way to give new home buyers peace of mind.”

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