It has now been more than two years since the New Homes Quality Code (the "Code") and New Homes Ombudsman Service (NHOS) were launched. As developers, customers and regulators start to find their feet with the new regime, here is a quickfire roundup of some of the recent developments in relation to the Code and NHOS.
More than half of all new homes are now covered by the Code
Since the Code was introduced, there has been a steady stream of developers signing up to its provisions. By September 2024, more than half (54%) of all new homes being built in England, Scotland and Wales were subject to the Code. This figure is still rising – a number of developers are in the process of completing registrations which are expected to extend the coverage of the Code to over two thirds of new homes.
First cases decided by the New Homes Ombudsman
The first complaint falling within the New Homes Ombudsman's jurisdiction was lodged in May 2023. By March 2024, the New Homes Ombudsman Service (NHOS) had received 231 complaints and had issued its first 13 decisions. In 8 of those decisions the customer's complaint was upheld in full or in part; in the other 5 cases the complaint was not upheld.
In its annual report, the NHOS noted three common themes that had emerged from the complaints it had received to date:
- A number of disputes had arisen about the content of verbal discussions between sales representatives and customers during the sales process. The NHOS has encouraged developers and customers to commit any discussions to writing so that subsequent misunderstandings can be minimised.
- While many customer concerns are addressed successfully by on-site or after-sales teams, some customers did not realise that their developer had a formal complaints process they could use. The NHOS has asked developers to remind customers of their formal complaints process if initial efforts to resolve an issue are not successful.
- Several complaints related to information developers had provided about the volume and location of affordable housing at developments. We wrote about the Ombudsman's approach to that issue in a previous article.
New Ombudsman appointed
In September, the NHOS announced that Nigel Cates would assume the role of Chief Ombudsman from 1 October 2024. Mr Cates, whose career has included stints at the Financial Ombudsman Service and the Office of Fair Trading, was most recently the Head of Financial Support and Controls at HSBC, where he led on complaint-handling at the bank. He replaces Alison MacDougall, who retired in August.
NHQB proposes changes to the Code
The New Homes Quality Board has proposed a number of changes to the terms of the Code. These include:
- Changes to the information developers must provide when describing new homes, including (where relevant) information about flood and coastal erosion risk and mobile phone coverage.
- A requirement for developers to tell customers the nature and expected amount of any commission they receive from introducing professional advisors or recommending any products or services.
- Confirmation that pre-completion inspections should be carried out in accordance with the guidance in the NHQB's checklist. For example, internal walls should be inspected in natural daylight from a minimum distance of 2m and not shining a light on the surface.
The full text of the proposed changes to the Code can be downloaded from the NHQB's website. Following a public consultation, the NHQB are expected to publish an updated version of the Code in early 2025.
Code and Ombudsman service to become mandatory
Finally, as we reported last month, the UK Government has accepted a recommendation from the CMA to make the Code and access to the NHOS mandatory for all UK housebuilders. The Government has said that legislation will be brought forward "in due course" to implement this.
For more advice on the Code and assistance with complaints before the Ombudsman, developers can get in touch with our Real Estate Litigation team or their usual contact in the Brodies Living team.
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