APPOINTMENT OF THE NEW HOMES OMBUDSMAN
Updated: Oct 18, 2021
The new homes sector was probably the largest market without an ombudsman. Most other related sectors are already well served – housing associations, letting agents, finance, legal and so forth. The history of this reaches back a long way, in fact earliest origins were probably around the time we launched After Build (2002).
Governmental pressure of the time was pushing the industry to build more but build better. Housing has lagged for decades in its ability to produce enough stock to keep pace with population shifts and household occupancy. And every government manifesto since has featured housing as a prominent political topic.
There were early references in the Barker report (2004) that quality must improve and should it not, government may intervene. This has been a consistent message for the last twenty years. Despite improvements reflected in the annual customer satisfaction survey (HBF), outbreaks of high-profile failings amongst some of the larger builders have kept the issue prominently in the public’s eye.
In October 2018 the government announced a New Homes Ombudsman to support homebuyers facing problems with their newly built home. The objective is to champion the rights of homebuyers and help ensure that when they buy a new home, they get the quality of build they rightly expect. The New Homes Ombudsman will protect the interests of homebuyers and hold developers to account when things go wrong.
Consultation took place the following year, involving both industry representatives and the consumer, to fashion the basis for a suitable scheme. In May 2020 the New Homes Quality Board was established, chaired by Natalie Elphicke MP, to take responsibility for the quality of new build homes and customer redress. The NHQB will oversee the creation and adoption of a comprehensive new industry code of practice and the appointment of the office of Ombudsman.
This year a further consultation took place to review then ratify the code. We await an announcement that a candidate has been appointed to the office of Ombudsman. So, a potted history, but what does it mean to your business?
Well, it means several things. Firstly, it creates a universal code for the entire sector. Previously, each warranty provider has set differing versions of warranty policy. The 2010 Consumer Code was never unifying because not all warranty providers supported it. Confusing for the consumer and messy for the housebuilder.
Secondly, it creates a scheme that government legislation stipulates ALL new housebuilders must belong to (and pay for).
Finally, it is clear about the standards of performance required of the industry and, the consequences of failing to meet those standards.
In doing this it has removed any ambiguity or variance between one builder or another. These are the headlines which encapsulate what every new housebuilder must do:
The code will apply to each new home from the marketing for sale of the new home and for a period of two calendar years following legal completion.
The housebuilder must ensure that the content of any sales and marketing material relating to the new home is clear, fair, and not misleading, legally compliant and uses plain language.
The housebuilder must not employ high-pressure selling techniques.
It is a breach of the code for legal completion to take place on a new home that is not a ‘Complete New Home’.
At the point of legal completion, the housebuilder must have completed the construction of the new home to the standards agreed and carried out their Quality Assurance Inspection.
The housebuilder must have agreed an appointment for a Home Demonstration.
The housebuilder must provide the customer with a comprehensive and accessible After-Sales Service for a minimum of two years following legal completion.
The housebuilder must have a system and procedures for receiving, handling, and resolving issues or problems raised by the customer, as well as complaints in line with the requirements, including time periods, set out in the Code.
The housebuilder must ensure that Snags are covered by the After-Sales Service and once agreed, they are resolved promptly.
If a customer is dissatisfied with the resolution of an issue or problem raised through the After-Sale Service, a complaint may be made in accordance with the housebuilder’s Complaints Process.
The code is clear and in so being, eradicates many of the confusing debates that still take place between housebuilders, contractors, and purchasers. The debate over ‘how long’ they are required to provide after care and ‘does it commence at practical or legal completion’, will be wiped out. Even where warranty policies differ in this regard, the code is unequivocal … After Care must be provided for 2 years from legal completion. Other aspects of the code will be analysed in subsequent articles as there is a fair degree of detail.