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THE DNA OF A DEFECT.

One of the biproducts of providing after care is the accumulation of data. Capturing information to assist our management of new homes after care means we acquire a very detailed picture of what happens, and the many and varied challenges faced by a developer.


In our most recent analysis, we’ve looked at the last 5 years and sampled a representative cross section of the market*.


Understanding what contributes to problems in a new home helps to focus and shape future after care management to improve performance i.e. reduce the number of reportable issues.


The range from ‘Best’ to ‘Worst’ is, in almost all cases, extremely broad. The mix of schemes analysed included:


  • Large private developer

  • Small private developer

  • Affordable housing

  • Houses

  • Apartments

  • Retirement

A homeowner has a simple expectation, which is …


  • A snag free property at occupation

  • Very few defects arising over the following 2 years

  • Swift resolution when problems occur

But very often after care problems have arisen through no fault of the after care resource. The condition of a plot at handover is the result of a wider management issue, driven mostly by the commercial need to secure purchaser income, too often before a plot is ready to be handed over. If not that, then a lack of management at site with insufficient quality control measures. Either way, what has become apparent over the ‘20s decade is that the condition of properties at the point of legal completion has been highly contributory to after care problems from the get-go.


As an average, the number of snags per plot has been a ‘reasonable’ 3.1, but the worst performer achieved 37 per plot (58% of all jobs) and an overall job per plot count of 64. Most developers when discussing the quality of their build will argue their scheme is well constructed and are confident they will face few issues over the ensuing 2 years. Many say this because that is what their contractor has told them – and they unwisely believe it.

There is no doubt that a property with snags day 1 will create an immediate and extreme level of dissatisfaction for most purchasers. The modern expectation is that a new home is a more attractive alternative because there is nothing to do! Destroying that notion creates difficulties that often last the entirety of the warranty period and make the management of subsequent defects much harder.


One of the most problematic aspects of new build construction over the last 5 years has been the enormously high incidence of construction business failures. Over 4,000 collapsed in 2023 (higher than any other industry sector) and currently a dozen a day are added to this figure. So, finding and retaining good contractors has never been more important, yet so often this happens at the expense of customer relations. Some developers will put their contractor’s interests ahead of those of the purchaser, and that’s a business strategy that can only lead to trouble.


Almost a third of all snags are painting/decorating issues – a strip of skirting board here, a section of wall there … less obvious than ‘no power’ or ‘a leaking WC’. So, a cursory look around a plot that has achieved ‘practical completion’ won’t spot these things. A thorough inspection of each plot will cost in the region of £200 …. compared with the reputational damage one damming article on social media can create, this is an inexpensive ‘no-brainer’. And if a plot is returning more than 30 snags … it hasn’t achieved practical completion no matter how hard your contractor argues otherwise. It isn’t finished! Here’s our recommendation for the end of build process steps.


  1. The contractor believes they have achieved PC – and they conduct their own ‘build-snag’, following through by addressing every point they identify.

  2. As developer you initiate your own room by room thorough inspection (non-technical) and follow through by sharing your results with the contractor and allowing them an agreed time to rectify everything.

  3. When they have finished, you carry out a de-snag – to check for yourself that they have rectified everything on your inspection report.

The bottom line is, don’t just take their word for it – see for yourself. Remember, it’s your reputation on the line – not theirs.


The other aspect of a difficult economy and high business failure rate is that a contractor folds before they have finished your development. We see this regularly and know just how difficult it can be to:


  1. Find an alternative contractor

  2. … who is available right now

  3. … who is willing to pick up the pieces

  4. … who produce a quality product

  5. … who will fit with your available budget!

All the more reason to manage the things you can control, which means sourcing a professional, well trained after care team to deliver a reliable service for the two years following legal completion. It is a cost, and many may argue one that is difficult to justify in such a tough economic climate. But put into context, the cost of after care can be as little as £300 a plot (After Build fixed-price service). Add to this a Quality Assurance Inspection (referenced above) and that’s £500 per plot … that’s a quarter of 1 percent of the construction cost of an average 3 bed property … the cost of a front door! Would you consider selling a property without a front door? No, of course not, so why would you sell a property that you hadn’t properly inspected and corrected, or try to avoid providing a reliable 2 year after care package? There wouldn’t be a single strand of good business sense in either decision.


Even with a well-structured after care programme, there are two things that determine its effectiveness:


  1. How well written was the after care element of your contractor’s build agreement?

  2. How long is your contractor warrantied to respond to defects?

Again, we have found in many cases that there is little or no real detail in build agreements that effectively ties a contractor to handle either snags or defects. And the duration of their warranty to you is often the element sacrificed in negotiating the cost of their services. When problems are reported in month 7+ and your agreement only protects you for the first 6 months, the cost of repairs for the remaining 18 months will have to come out of your pocket! This is fine as long as you budget for the reality of it.

These two points are highly relevant when it comes to the speed of response to a reported defect. Your ability to capture the information and raise a job instruction to the relevant contractor may be excellent, but if the contractor fails to respond, you will disappoint your customer. The degree of disappointment will increase the longer it takes to make good the issue. Eventually disappointment turns to complaint and ultimately can become the basis for damaging publicity. In recent days two developers were the subject a national television consumer programme following complaints from both sets of purchasers. This is to be avoided at all costs.


Performance tables of snags and defects reported highlight this:


SNAGS

  • 43.7% closed in 30 days

  • 18.9% closed between 31 – 60 days

  • 13% closed within 61 – 90 days

Only three quarters were closed inside of 3 months … over 3% took between 1 – 2 years!!


DEFECTS

  • 46.8% closed in 30 days

  • 18.6% closed between 31 – 60 days

  • 10.3% closed within 61 – 90 days

30 days is by and large a reasonable time in which to rectify an issue (routine) – much beyond this is not acceptable. Yet statistically the industry is struggling to do better for all of the reasons we have identified.


Cost is the number 1 reason why developers shun so many of the measures necessary for good customer care, but in truth the real cost to the industry isn’t the provision of services – it’s the consequence of damage to your business when things go wrong – and they will always go wrong because of the high volumes of customers concerned. It only takes 1 very disgruntled purchaser on a development of 100 plots to thoroughly upset the apple cart. The other 99 you might manage without too much difficulty, but that one will succeed in trashing your reputation and cost you real money to put right that which should never have been allowed to be wrong to begin with.


For every marketing ‘£’ you spend, it will likely cost you X10 that to patch-up a damaged relationship as the result of poor-quality control, corner cutting, poor or no after care. That is short sighted management, the like of which few businesses can truthfully afford.

If you would like to see the full extent of data covering this article, the tables are available at our website:


After Build – the UKs leading provider of fixed-price after care. www.afterbuild.com

*Sample size:

  • 71 Developers

  • 243 Sites

  • 9,329 Plots

  • 38,857 Jobs

  • Geographic location - national

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