The start of 2021 saw the formation of the New Homes Quality Board with a remit to develop a new framework to oversee reforms in the build quality of new homes and the customer service provided by housebuilders. The Board is an initiative borne out of the UK Government having expressed concerns for a number of years about ongoing consumer dissatisfaction with regard to the procedure for purchasing new build properties. In particular, there is concern about a lack of proper after sales service and a robust dispute resolution process that is accessible to consumers in the housebuilder industry.
Whilst the Consumer Code for Homebuilders was introduced in April 2010 as a means to provide consumer protection following the property crash, the message from consumer surveys is that the Code is not effective enough. There is a lack of uniformity amongst the developers as not all new build warranty providers are signatories to the Consumer Code and some use their own codes of conduct. This makes for a confusing picture in the industry for consumers and in particular with regard to remedies for resolution of disputes. This has caused uncertainty and varying experiences amongst purchasers.
2021 ends with the publication of the New Homes Quality Code developed by the Board following extensive consultation with stakeholders. Along with the Code the Board has also produced a guidance document for developers and builders to assist them in understanding the requirements of the Code, a glossary of terms and some further background information about the Board, the Code and the new Ombudsman Scheme.
To remove the lack of uniformity in the industry, they are hoping that all builders and developers will register with the Scheme during the course of next year. From next month housebuilders should be able to apply online via a portal being developed by NHQB to register. Once registered, housebuilders will be provided with support and training on the Code and Ombudsman Scheme to enable them to make the transition to the new arrangements. Once the housebuilder is familiar with the Code and the Ombudsman Scheme, all customer reservations will require to meet the requirements of the new Code and come under the remit of the Ombudsman Scheme.
The Scheme at present remains a voluntary scheme, but the hope is that membership of the Scheme will become a badge of quality and the consumer will look for that badge as standard in the purchase of a new build home. We can expect major housebuilders to register for the Scheme and any builder looking to register will require to ensure their sale materials properly reflects the terms of the Code. For example, sales material will require to ensure that there is reference to adequate protection for vulnerable customers and missives will require to accommodate the right to have the property inspected by an accredited specialist prior to completion.
Whilst the Code and the Ombudsman Scheme are voluntary at the moment, the Building Safety bill introduced to Parliament in July this year does make provision for the Secretary of State for Housing in England to require all developers to be members of the Scheme and subject to the jurisdiction of the New Homes Ombudsman. This would however only extend to England. The Board are in discussion with the devolved administrations about the same provision applying in Scotland and Wales.
To understand a bit more about the Board, please listen to our podcast of an interview with Douglas Cochrane, the Deputy Chair for the Board.
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