Redress? When will New Homes Ombudsman be operational?

James Brokenshire re announces the statutory New Homes Ombudsman but when will it be operational?

Whilst housing secretary James Brokenshire has announced an “overhaul of broken housing complaints system” it is evident to me that any redress will not be implemented fast enough. When I first suggested a New Homes Ombudsman to the APPG EBE Inquiry 2nd session I attended way back in November 2015, it was well received and became the number 1 “Key” recommendation in the inquiry report, published 13th July 2016.
New Home Expert at APPG Inquiry evidence sessionSadly since then and until James Brokenshire’s announcement on 1st October 2018, little if anything has been done. Indeed, it can be interpreted from the government response to the Housing Redress Consultation, which took this government 283 days to publish; it is highly likely that legislation supposedly being “brought forward at the earliest possible opportunity to require all new developers to belong to the Ombudsman” will not in fact be the statutory new homes ombudsman so badly needed. It would appear, at least for the time being, that “an interim voluntary service will be established requiring developers of new build homes to participate”  is favoured by government.

James BrokenshireMore worryingly, the government has indicated that “developers will also have to belong to the new body by 2021 if they wish to participate in the government’s Help to Buy scheme”. This suggests the non-mandatory ‘voluntary’ new homes ombudsman will still be in place in April 2021, indicating that legislation for the statutory new homes ombudsman may not be on the statute until after the next general election, currently due on 5th May 2022! Hardly “the earliest opportunity” Mr Brokenshire! Could this be a cynical ploy to delay legally mandated, effective redress for new homebuyers, so that the industry’s political party donations keep flowing in to fight the next election?

The government has said that it is to create a ‘Redress Reform Working Group’ with redress schemes, which will work with industry and consumers on developing the new service and the other options set out. Why is government even contemplating working with those responsible for the existing failures of an industry fraught with scandals and controversy? Will government be prepared to work with me, on behalf of UK new homebuyers, to ensure that the new homes ombudsman is created as the government good intention “to champion the interests of new homebuyers and hold developers to account” or is it going to facilitate ‘big housebuilding’ to mould and manipulate any new homes ombudsman to protect the interests of all those incestuously connected with this dirty industry, to limit its effectiveness, stifle justice for new homebuyers and maintain their current balance of power?

Code of Practice

The government has set out its desire to see a “single Code of Practice on complaint handling across all tenures.” Hopefully this will stipulate how complaints are to be dealt with and the timescales required. However, the nature of defects in new homes vary and no single timescale will suit rectification of complaints about poor quality, defects and breaches to building regulations and warranty standards.
Redress for newhomebuyers -New Homes OmbudsmanAs I said in my submission to the APPG EBE Inquiry in January 2018 “New Homes Ombudsman – Call for Evidence” a single, separate, stand-alone, statutory new homes ombudsman is required. I am pleased the government has listened and will be legislating for exactly this, albeit eventually, and not one hidden and delayed by a new, ‘one-size-fits-all’ Housing Ombudsman which was, at the time, preferred by government despite it being more problematic, taking longer to create. It would appear that many of the inquiry report recommendations, published in June 2018,  have been taken on by government.

The New Homes Ombudsman must not be restricted to a new single, industry Code of Practice

One recommendation in particular, poses a distinct risk to the potential effectiveness of the statutory new homes ombudsman. Government has stated its intention “in the meantime” to “work with industry, warranty providers and consumers to ensure that the distinct practices for the new build sector are addressed and that these are reflected in an agreed single consumer code of practice which would be used by a New Homes Ombudsman to adjudicate against”

There are apparently currently seven consumer codes regarding new homes! “all different but sharing a general lack of obligations placed on home builders.” The Property Ombudsman said that the Codes “are written in a way to suggest that they exist to contain complaints” which indeed they do, all being set up subsequent to the Consumer Protection Regulations 2008.

But it would appear the worst recommendation of the APPG Inquiry report, the proposal for a new “industry-wide code of practice, with government, warranty providers, housebuilders and consumer groups working together, in consultation, to draw up a code that would be used by the new homes ombudsman (NHO) to adjudicate on disputes”  has been seriously considered and in particular, the industry-led, “limited in its scope”  Consumer Code for Homebuilders (CCHB) appears, unsurprisingly, to be chomping at the bit to be front and centre for drafting the new Code – adding to the “confusion”.

Not only will this give the housebuilding industry an opportunity delay the creation of any new homes ombudsman (voluntary or statutory), it will also provide the industry with a golden opportunity to influence what the new homes ombudsman can and cannot rule on, possibly shackled by the requirements of this single, industry-approved code of practice. I cannot think of any statutory ombudsman, in any sector, that can only adjudicate within the confines of a specific industry code. Statutory ombudsman such as the Financial Ombudsman Service and the Legal Ombudsman have compulsory jurisdiction over certain regulated sectors and their decisions can be enforced by a court. The statutory new homes ombudsman should be no different.

No single code could possibly cover every eventuality for new home consumer redress. It could get even worse with the Homebuilders Federation (HBF) suggesting that “a detailed set of finishing standards for an ombudsman to apply when assessing the merits of complaints and resolving disputes” no doubt along the principles the housebuilder’s existing NHBC ‘Get out of Jail Free’ card – The “Consistent Approach to Finishes” which is used to justify atrocious workmanship standards as permissible, if deemed “within tolerance”.

New home ombudsman to only cover disputes within first two years

Government has indicated: “We will look to strengthen protection for the first two years after purchase when the majority of problems occur and minimise the variance in the levels of protection and schemes that are currently available.”  This is another let off for housebuilders. The other reason given in the APPG report is that it “mirrors the duration for the housebuilders’ liability for defects.”  However, the 2-year timescale does not bring warranty schemes under the new homes ombudsman jurisdiction, despite the APPG committee acknowledging my observation that the “The Financial Ombudsman Service (FOS) is not the best organisation to preside over technical disputes.” Hopefully the government will also look at redress for those who already own a defective new home and allow the New Homes Ombudsman to consider complaints retrospectively for the remaining duration of their 10-year warranty, to ensure that owners that reported issues that were never properly dealt with, can also seek redress.

Builder buy-backs (“reversing the sale”) and levy funding

Builders should be forced to buy back seriously defective new homesThere was no mention of the APPG inquiry report recommendation requiring developers and housebuilders to buy-back new homes, those with serious problems that would require occupants to move out. In addition, whilst all those concerned recognise the need for all housebuilders to contribute via a levy, to fund the new homes ombudsman, there is no detail on this in the government’s response. My suggestion remains a levy of £100 for each new home built each year by every housebuilder and a £500 “case fee” to cover the cost of investigating each claim made against them. The government has confirmed the new homes ombudsman will be “free of charge to buyers of new build homes” unlike the CCHB!

“We propose to bring forward legislation to underpin a New Homes Ombudsman in statute and we will work with industry and consumers prior to legislation so purchasers of new build homes have access to better redress now.“

So “now” by definition is “at the present time or moment” Presumably at the time the government published the response to the consultation on 24 January 2019, better redress or a new homes ombudsman was about to start work, helping beleaguered new homebuyers get justice and their homes fixed? Perhaps this would go some way to explain why the publication of the consultation feedback and government response took 283 days! “Bring forward legislation”   – When was it originally scheduled?  What “now” is the new date?

As the government stated: “it is clear from the responses that more needs to be done to strengthen consumer redress in relation to new build homes, and to drive up standards across the industry. The need for an easy, effective and independent body for consumers to go to is evident, and supported by the industry.  We consider that the fastest way to improve redress is to work with industry and consumers to implement a better redress scheme for purchasers of new build housing as soon as possible
But when exactly? How long will the process take? And note, this is not the new homes ombudsman but potential backsliding, enabling the industry to continue to short-change its own customers on both quality and service, whilst at the same time no doubt, using its in-house “customer satisfaction survey” “to provide data to rebut negativity”.

The government has stated that “as the proposed new homes ombudsman legislation includes devolved matters, we will continue to engage and consult the devolved administrations to seek agreement to introduce UK-wide legislation.” It is to be hoped that the devolved governments do not become a cause or excuse, for delaying legislation to bring in the statutory new homes ombudsman.

Oh no not another consultation!

We will consult on the detail of the proposed legislation to statutorily underpin a New Homes Ombudsman. This will include the approval mechanisms and standards that a New Homes Ombudsman must meet as well as whether a Code of Practice for developers should also be underpinned in legislation.”

Could this mean that a housebuilder that does not comply with the requirements of a Code of Practice will be prosecuted? So now we have a clear indication that a Statutory New Homes Ombudsman has the distinct potential to take years not months to create and legislate.

Redress with a ‘Voluntary’ Ombudsman?

“As we introduce statutory arrangements, we will work closely with industry and consumer groups to establish a voluntary new homes ombudsman ahead of legislation. We expect this ombudsman to be:
•  Free to the consumer and funded by industry;
•  Independent from the organisations the ombudsman will investigate;
•  Fair in dealing with disputes;
• Open and transparent and have public accountability through regular reporting;
•  And have effective powers to hold developers to account.

Not sure how this can come to be if it is “voluntary” (as is the ineffective CCHB) created in conjunction with the housebuilding industry. Indeed, it may even give the industry an opportunity to suggest that legislation is not necessary as it seeks to prove the voluntary new homes ombudsman has been effective.

Of one thing we can be certain, government cannot and must not, allow the housebuilding industry to make the same bodge job with a new homes ombudsman (whether voluntary or statutory) as they do with the defective new homes they build.

As it stands, the current new home redress proposals are just that, well-intentioned but lacking detail and clarity. Government must act and do so quickly. It must ensure the housebuilding industry,  building defective new homes up and down the country and causing untold misery for those that live in them,  is not given any opportunity to water down the potential effectiveness of the new homes ombudsman. Let’s make sure these bold proposals become bold actions. You can be sure I will be watching, commenting and will miss nothing. After five years campaigning, the new homes ombudsman is too close for me to allow the industry to manipulate and interfere, or an ineffective government to delay it.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Housing Redress Consultation – Government finally publish response

The wait is over the results are in, and the winner is……
the new homebuyer!

Housing redress consultation

After what has seemed an eternity and without any explanation for the nine-month delay, the Government published its response to the ‘Strengthening consumer redress in the housing market’ consultation on 24 January 2019, which had closed 283 days  earlier! As I mentioned in my last article about government dragging its heels on housing reform, uploaded 10 days before this consultation response was made public, MHCLG minister Heather Wheeler stated in a letter to my MP on 1st October 2018, “access to redress is a priority for this government.” 

Whilst the government consultation response relates to redress in all housing sectors, I will restrict my comment and subsequent observations to the government’s reiterated commitment to establishing a New Homes Ombudsman which will champion home buyers, protect their interests and hold developers to account.” as previously announced by James Brokenshire on 1st October 2018.

Disappointingly, just 1,209 responses were received for this consultation, only 355 (34%) from those having bought a new home and 385 (37%) from leaseholders. ‘Industry and organisations’ returned 172 (14%) responses. The consultation “Overcoming the barriers to longer tenancies in the private rented sector” which closed on 26 August 2018, received over 8,700 responses! Are new homebuyers uninterested in having someone fight their corner?  “holding developers to account”  Nevertheless, I would like to acknowledge and thank the few who did participate on behalf of many thousands of new homebuyers with defective new homes and thank Katie Kendrick of the National Leasehold Campaign who encouraged members of her group to also respond.

Consultation response - Redress in housing In the government housing redress consultation, just 12 people (7%) indicated that had made a complaint using the Consumer Code for Home Builders (CCHB) IDRS in the last FIVE YEARS! Some respondents said their complaints had been considered as ‘out of scope’ – a common phrase used in the CCHB Case Summaries!  A Government inquiry report in July 2016 also concluded the CCHB was “limited in its scope”.

Out of the 167 individuals who rated the service they received from a redress scheme in Q7, 40% were made by those who recently bought a new home and 35% from leaseholders. These two categories made up the majority (79%) of those who said they had received a ‘very poor’ service. In addition, 42% of purchasers of new homes said “yes, they had encountered gaps in current redress schemes.”

The majority of respondents (84%) who replied to Q20, stated that an ombudsman scheme for new homes should be statutory.

Nearly all, 91%, of the new homebuyers that responded said “that a redress scheme should publish decisions and the number of complaints relating to different providers should be made public.”

The response to Q30 regarding a single ombudsman or one for each sector was not disclosed. Nevertheless it is clear that the majority of new homebuyers want a stand-alone, independent statutory new homes ombudsman and this is what the government have pledged to create.

So what was the Government response to this Consultation as far as the New Homes Ombudsman is concerned.  I will endeavour to interpret the ambiguity in my next article:

Following the consultation, James Brokenshire announces overhaul of broken housing complaints systemJames Brokenshire“And to protect the interests of home-owners who buy new build homes, government has also reiterated its commitment to establishing a New Homes Ombudsman which will champion homebuyers, protect their interests and hold developers to account.

 

Legislation will be brought forward at the earliest possible opportunity to require all new developers to belong to the Ombudsman – giving homebuyers the confidence that when they get the keys to a new home they are getting the quality of build they expect.

Developers will also have to belong to the new body by 2021 if they wish to participate in the government’s landmark Help to Buy scheme.

First, I want to help plug the gaps in available redress services so that more people can get their housing disputes resolved without going through the courts. To that end, I am proposing a New Homes Ombudsman, underpinned by legislation following the establishment of an interim voluntary service, and requiring developers of new build homes to participate.

I want to see a single “Code of Practice” on complaint handling across all tenures.”

Consultation – Housing Complaints Resolution Service

Our aim is to provide a single point of access for all the current schemes in housing. We intend to develop this in collaboration with the redress sector, initially on a voluntary basis, but we will keep open the option of legislation to make this mandatory if necessary.

Our ambition ultimately is for the new service to cover all housing consumers including tenants and leaseholders of social and private rented housing as well as purchasers of new build homes and users of all residential property agents.

We propose to establish a Redress Reform Working Group with redress schemes, which will work with industry and consumers on developing the new service and the other options set out in this paper…”

Addressing the gaps “proposing legislation to extend mandatory membership of a redress scheme to:  c. developers of new build homes.

The government announced the proposal to create a New Homes Ombudsman service in October 2018. This response indicates how that service will sit in the wider redress landscape and the next steps of its implementation.

First, I want to help plug the gaps in available redress services so that more people can get their housing disputes resolved without going through the courts. To that end, I am proposing a New Homes Ombudsman, underpinned by legislation following the establishment of an interim voluntary service, and requiring developers of new build homes to participate. I will also bring forward legislation to require all private landlords, including private providers of purpose-built student housing, and park home site operators to belong to a redress scheme.

On 1st October 2018 we announced our commitment for a New Homes Ombudsman to protect the rights of buyers of new build homes. These commitments are part of the Government’s drive to close gaps in existing redress services and ensure that all housing consumers have access to redress when things go wrong. This consultation response provides more detail on the implementation of these measures.

We propose to bring forward legislation to underpin a New Homes Ombudsman in statute and we will work with industry and consumers prior to legislation so purchasers of new build homes have access to better redress now.

In the meantime, we will work with industry, warranty providers and consumers to ensure that the distinct practices for the new build sector are addressed and that these are reflected in an agreed single consumer code of practice which would be used by a New Homes Ombudsman to adjudicate against.

New Homes Ombudsman

99. It is clear from the responses that more needs to be done to strengthen consumer redress in relation to new build homes, and to drive up standards across the industry. The need for an easy, effective and independent body for consumers to go to is evident, and supported by the industry. A significant minority of respondents said that there is no current existing redress scheme which is best placed to deliver an ombudsman scheme for purchasers of new build homes.
100. There was very strong support in favour of purchasers of new build homes having access to an ombudsman scheme, and many respondents were in favour of such an ombudsman being statutory. We consider that the fastest way to improve redress is to work with industry and consumers to implement a better redress scheme for purchasers of new build housing as soon as possible.
101. We have announced proposals to ensure that a New Homes Ombudsman is established, working with industry and others. We will look to strengthen protection for the first two years after purchase when the majority of problems occur and minimise the variance in the levels of protection and schemes that are currently available. To ensure that consumers get the protection they deserve, we will introduce legislation to require developers of new build homes to belong to a New Homes Ombudsman, which will be underpinned in statute.
102. It is proposed that the New Homes Ombudsman would charge developers to ensure that the service is free of charge to buyers of new build homes.
103. Developers work across all nations of the UK. As the proposed legislation includes devolved matters, we will continue to engage and consult the devolved administrations to seek agreement to introduce UK-wide legislation.
104. We will consult on the detail of the proposed legislation to statutorily underpin a New Homes Ombudsman. This will include the approval mechanisms and standards that a New Homes Ombudsman must meet as well as whether a Code of Practice for developers should also be underpinned in legislation.
105. As we introduce statutory arrangements, we will work closely with industry and consumer groups to establish a voluntary New Homes Ombudsman ahead of legislation. We expect this ombudsman to be:
• Free to the consumer and funded by industry;
• Independent from the organisations the ombudsman will investigate;
• Fair in dealing with disputes;
•Open and transparent and have public accountability through regular reporting;
• And have effective powers to hold developers to account.
106. At Budget 2018, we announced that a new Help to Buy Equity Loan scheme will run for 2 years from April 2021 before closing in March 2023. We will establish the condition that housing developers must belong to a New Homes Ombudsman to participate in the new Help to Buy Scheme.
107. Although there are benefits to having competing redress providers as set out in the section on the Private Rented Sector which has an established redress system, it is clear that the number of schemes operating in the new build sector has created an unacceptable variance of standards and, as we have an opportunity to establish a new system without disruption to consumers and there is a need to reform all the existing schemes, we believe a single New Homes Ombudsman could solve these issues without unnecessary disruption. Our consultation will consider whether one or more organisations could provide a quality service to consumers under the principles above.”

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Why is the Conservative government dragging its heels over housing reform?

Why is the Conservative Government dragging its heels over housing reform?

Amongst a great government fanfare, the then DCLG Secretary Sajid Javid published the twice delayed Housing White Paper on 7 February 2017 entitled “fixing our broken housing market” No more talking! Government must now act on new home issuesAt the time this was widely derided as “more of a consultative document than a white paper.” It contained promises to ban the sale of leasehold new houses; reform leasehold; end housebuilder landbanking and even acknowledged the existence of the APPG for Excellence in the Built Environment (2016) “More Homes, fewer complaints” – report from the Commission of Inquiry into the quality and workmanship of new housing in England, confirming it would:
“keep requirements under review, to ensure that they remain fit for purpose and meet future needs. This includes looking at further opportunities for simplification and rationalisation while maintaining standards.”

In December 2016, the then housing minister Gavin Barwell said:
“The Government will be considering the recommendations in the report in developing future policy on new home”

Whilst Javid may have claimed his housing white paper would provide “radical lasting reform” to fix the broken housing market, it would appear that very little, in fact nothing, has actually been done in the last three years.

Since then the “Consultation Party” has announced various consultations, reviews, reports and inquiries but as yet, nothing has changed. For big housebuilding it is very much Keep Calm and Carry On Regardless.

Government action required not just words!

Take leasehold new houses. This was debated as long ago as 20 December 2016 in the House of Commons. Not one MP came out and spoke in favour of selling brand new houses as leasehold. But many called for it to be banned with Sir Peter Bottomley comprehensively exposed the abuses said:
this goes beyond sleaze”
Justin Madders Labour MP for Ellesmere Port and Neston said:
“This is nothing short of a national scandal. It is the PPI of the house building industry”
The then MP and housing minister Gavin Barwell said:
“I cannot think of any good reason for houses to be built on a leasehold basis. If the industry does not put a stop to the practice and help existing homeowners, we will look to see what Government can do”
Even Theresa May stuck her prime ministerial beak into the argument saying on 1st  March 2017:
“we will consult on a range of measures to tackle unfair and unreasonable abuses of leasehold. I do not see why new homes should not be built and sold with the freehold interest at the point of sale.”

So the government consultation “tackling unfair practices in the leasehold market” was launched on 25 July 2017 to 19 September 2017 with the report on 6,075 responses published 91 days later on 21 December 2017. On 2 July 2018, 19 months after the commons debate, the government announced:
“New government funding schemes will no longer be able to use the money for unjustified new leasehold houses, in a continuing push to tackle unfair and abusive practices within the leasehold system”

Quite what would be deemed “unjustified” is unclear except it gives an opportunity for housebuilders to justify, which they could not with a blanket ban
This was first suggested by Justin Madders during the commons debate and implemented in Wales in March 2018 with developers in Wales will now no longer be able to receive Help to Buy funding for new houses sold as leasehold unless they can present a legitimate reason for retaining the freehold.

On 2nd July 2018 current Housing Secretary James Brokenshire announced “funding for leasehold new houses to end” and, in a bid to “create a fairer more transparent system for homebuyers”, the latest MHCLG Consultation “Strengthening consumer redress in housing” gave new homebuyers an opportunity to insist on a fully independent New Homes Ombudsman, closed on 16 April 2017. At the time of writing, some 274 days later, the feedback is apparently still being “analysed”!

Heather Wheeler Government Housing MinisterI wrote to my MP Gillian Keegan as long ago as 31 August 2018 to ask why the government response had not been published? She forwarded a copy of a letter from Housing Minister Heather Wheeler dated 1st October 2018 which stated that “access to redress is a priority for this government” and “we intend to publish our consultation response later this year” [2018]

Obviously that has still yet to happen. It looks like Heather Wheeler would have trouble forecasting six o’clock at half past five!

So why is everything taking so long? I can see any reason whatsoever why new laws cannot be debated, drafted and enacted to a given timetable. Brexit is not an excuse! Even simple improvements for new homebuyers could be set up with relative ease and yet they are not. Has this government a hidden agenda? Is it in league with big housebuilding? Is the “Consultation Party” relying on huge donations for the next election campaign?

Whatever the reason, and there must be one, such a dire performance in both work output and results would not be tolerated in any other form of employment.

It is clear and has been for many years, that plc housebuilders put their profits above anything else; good service to their customers, high quality new homes, value, warranties that really do give peace of mind, not scamming by selling leasehold new houses and homes with fleecehold management charges all are possible and deliverable but nothing has been done.

Make no mistake; the housebuilding industry is rotten to its very core. It will never ever change without a strong government forcing it to.
A lot of things have got to change. Real change has got to come from Parliament, from a strong leadership. Not much chance of that at the moment! It could have been so different. On 1st October 2018  James Brokenshire announced that a New Homes Ombudsman was being created “champion homebuyers, protect their interests and hold developers to account” So what, if anything, has been done to progress this in the last 107 days?

As Hugh Fearnley Whittington eloquently put it:
“if there’s one thing we know about those in the Government, it’s that anything that costs money, anything that pits government against big business, even if everyone knows it is the right thing to do, appear to make it harder and slower for them to get on and do it. There is one thing that can make a huge difference and that is YOU, US, THE PEOPLE”

So I call on everyone, let us make 2019 the year of #PeoplePower. It is time to force those government announcements into actions.

On 5th October 2016 Prime Minister Theresa May told the Conservative Party Conference that she was about:
“Righting wrongs: Challenging vested interests : Taking big decisions : Doing what we believe to be right : Getting the job done : That’s the good that Government can do and that’s what I’m in this for : Standing up for the weak, standing up to the strong.”
Perhaps she might like to tell the electorate exactly WHEN she is planning to start!

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Disrespectful Bellway Homes Fit Signs Over Remembrance Poppies

Bellway Homes signs advertising the launch of their new development in Horwich were fitted to lampposts in front of poppies ahead of Remembrance Sunday.Bellway Homes Sign Covers Remembrance PoppyUnbelievably, plc housebuilder Bellway Homes sullied the memory of the fallen and showed complete disrespect by putting up, in all probability, illegal advertising signage over Remembrance poppies. The poppies having been tied to a number of lampposts on Chorley New Road, Horwich near Bolton, to mark the centenary of the end of the First World War.

Remembrance TommyAmazingly, Bellway’s fly-posting contractor must employed knuckle-dragging idiots, who took it upon themselves to fit Bellway’s marketing signage over the Remembrance poppies not once, but many times. In fact Bellway confirmed: “When we were made aware that the poppies had been covered by our development signage boards, we immediately sought to rectify the situation and they were removed as a matter of urgency by our own staff who worked late into the evening to take them down.”

Yes that long! Despite this, Bellway’s  “own staff” missed at least one. Steven Winward, who saw the images on social media, spotted one remaining on a lamppost near the Beehive roundabout told The Bolton News:
“I went last night about 9pm to check myself because it had really annoyed me after seeing the effort people had gone to put poppies and memorial stuff up and they’d still missed one on the Beehive roundabout. So I went to grab my ladders and snips and took it down to make a point. It’s 100 years and it was so disrespectful. I was fuming.”

Adding insult to public outrage, councillor Marie Brady criticised the public by saying she was not happy with the way the situation was dealt with and that the images should not have been posted on social media and instead, they should have been reported to the town council or the local branch of the British Legion. Cllr Brady told The Bolton News“We didn’t want people going out on ladders on a wet and windy evening to take them down.”

Did Bellway Homes obtain planning permission or permission from the local Highway Authority or Electricity North West  as these signs were placed on highway land?

Bellway CEO Jason HoneymanResponding to the criticism, Bellway CEO Jason Honeyman replied on Facebook:
“Please be assured there was no intention to insult anyone our signage contractors made a mistake, we are all deeply embarrassed and upset by the matter”

A mistake? Apparently Bellway CEO is incapable of recognising what was a deliberate, intentional, idiotic action, certainly not a mistake. The only mistake being Bellway Homes appointing these contractors to fit advertising signs to the publicly-owned street furniture in the first place!

A spokesman for Bellway Homes told The Bolton News:

“We are deeply embarrassed by the appointed contractor’s lack of respect and sincerely apologise for the offence that this caused to the local community in Horwich”

“We have the utmost respect for Armistice Day and for our military forces, and Bellway is currently supporting the Royal British Legion across the business.

“We could never have imagined that our signage contractor would cover the poppies with the marketing boards. This was a disrespectful mistake and one that we corrected as soon as possible.

“We are working with the contractor to ensure that nothing of this nature should happen again, either for us or for another of their clients.”

So amazingly Bellway Homes are still intending to use this contractor! So what sanctions if any, have Bellway imposed. Most people would have torn up any contract and not paid the contractor after the damage this has done to Bellway Homes and further sullied the image of the whole industry.

This has to be a new low for the housebuilding industry which would appear to stop at nothing if there is an inclining of saving money and greater profit involved.

There are strict rules and clear guidelines as to what temporary signage is permitted and under which circumstances.

Guide to AdvertisersThe MHCLG “Guide for Advertisers” states:
All outdoor advertisements must comply with five ‘standard conditions’. Which include: “have the permission of the owner of the site on which they are displayed (this includes the Highway Authority if the sign is to be placed on highway land”
From page 10 onwards, it lists 14 classes none of which would appear to apply to the signage Bellway erected meaning it could be classed as a deemed consent. Page 30 states:

“Any form of fly-posting (that is, displaying an advertisement without consent) is an offence which is immediately open to prosecution, or to the removal or obliteration of any fly-posting material if the district council or London borough council decide to take remedial action against fly-posting in their area. In the case of a placard or poster, if the material identifies the advertiser displaying it, the Council must give two days’ written notice of the intention to remove or obliterate it. This advance notice gives the advertiser the opportunity to contest the Council’s proposed actions, but if the advertiser is not identified a placard or poster may be immediately removed or obliterated.”

Housebuilders nationally, continue to run roughshod over signage rules, especially for permitted temporary directional signage  in particular this rule: “no sign may continue to be displayed after development of the housebuilding site is completed; or for more than two years” (see page 24)
and for flags (sites of 11-100 houses may have only 2 flags and flag poles should  be less than 4.6 metres high -see page 26).

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Consumer Code for Homebuilders – Causing the Confusion!

So much for “Clearing the confusion” the Consumer Code for Home Builders (CCHB) appears to be creating it with its latest webpage purporting to “answer” consumer’s questions following the government announcement last month that a statutory new homes ombudsman was being created.

It would seem that the conclusions in the APPG Report published in July 2015 “More homes Fewer Complaints” appear to be lost on the Consumer Code for Home Builders as it ramps up rhetoric in a battle for its very survival now government has announced the creation of a statutory new homes ombudsman.

Under the headline “Clearing up the confusion”  the CCHB allegedly answers questions from consumers:

 

“Will the proposed New Homes Ombudsman replace the need for the Consumer Code?

Consumer Code for Home BuildersYes it would. The APPG Inquiry Report number 1 “Key recommendation” that a New Homes Ombudsman be set up saying “it would need to be completely independent and replace the dispute resolution service offered as part of the Consumer Code for Home Builders. This same Inquiry reported that the Consumer Code for Homebuilders:

  • “does not appear to give homebuyers the safeguards we think they should expect”
  • “it does not appear to us objectively to offer consumers a wholly satisfactory form of redress”
  • “is limited in its scope”

Yet the Consumer Code for Homebuilders ‘clears the confusion’ saying:

“The spotlight is on proposals for a new homes ombudsman once again, and we are actively working with government to understand how the new proposals will work in practice and what rights consumers would have under the scheme. In the meantime, however, there has been some confusion about the role of an ombudsman.

There are clear rules about what an ombudsman can and can’t do. While they can award a remedy (including money) to rectify a problem, they don’t have jurisdiction to fine organisations or apply standards. So introducing a new homes ombudsman may help with dealing with the complaints about existing problems, but it won’t prevent future problems arising.”

Wrong! An Ombudsman can award substantial justifiable compensation to consumers which would amount to a fine in all but name. All adjudication decisions would be publicly available in full with housebuilders named and shamed. By its very existence it would, as the APPG Inquiry Report alluded to, “put pressure on housebuilders to up their game in the first place and spur them on to improve workmanship and increase levels of customer service”

“We want service standards in home building to improve. Training and compliance checks are needed which is one of the areas we focus on.”
[The training being of housebuilders’ sales staff and estate agents – The CCHB specifically does not cover defects, poor quality or warranty issues]
“Furthermore, under the Consumer Code, builders can and have been held to account for not complying with an adjudicator’s decision.”
Really? Where is the evidence? James Brokenshire said the new homes ombudsman would go further and “champion homebuyers, protect their interests and hold developers to account”

This is an industry-led and industry funded Code that would never bite the hand that feeds it.

“Our Advisory Forum advises the Code on policy and action. We also have a fully independent disciplinary and sanctions panel which considers what action should be taken against those builders that breach the Code requirements. For example, one builder was suspended from building any new homes until all staff had been trained on the Code to prevent further breaches of the Code.”
But presumably not many, if any, have had their registration cancelled by the warranty providers. We don’t know because it has never been published!

Does the Consumer Code offer any more rights than existing legislation?

“Unfortunately, the Consumer Rights Act 2015 does not cover purchases of new homes.”   That’s why the protection provided by the Consumer Code is so important – the Code gives buyers of new homes protection if they change their mind or find sales literature misleading or inaccurate.”
Wrong! It does as far as ‘services’ are concerned. However, no consumer legislation at all specifically covers property. The CCHB does not give consumers any “Protection” it is merely a set of requirements that plc housebuilders appear to pay little more than lip service to at best.

“The Consumer Protection from Unfair Trading Regulations 2008 offers some protection.”
Wrong again! Not “some protection” – it covers every area regarding selling property. The CCHB was set up by the industry to prevent housebuilders being reported to Trading Standards and ending up in court.

“However, it requires Trading Standards to take enforcement action or consumers to bring their own action, which can be complex and costly.”
That is specifically why the Statutory New Homes Ombudsman is being created.

“Where issues are identified under the Consumer Code, home buyers can use the Code’s Independent Dispute Resolution Scheme rather than take lengthy and costly legal action through the courts. We’re raising awareness of the Code  because we want more home buyers to make use of this scheme to seek redress where a breach of the Code has been identified.”
The CCHB has existed for over 8 years yet apparently raising awareness is still necessary? A statutory new homes ombudsman would give consumers a right to redress in any dispute with housebuilders, in the same way the Financial Ombudsman Services does with financial providers. The statutory new homes ombudsman would not and must not be, restricted and shackled by specific Code requirements drawn up in collaboration with the industry and its own vested interests.

Why doesn’t the Code deal with more cases?
Good question!
Because no housebuilder is going to promote the CCHB as it would make complaints more likely! In addition, the CCHB charges consumers an administration fee of £120 to register a complaint, and in some “successful” cases, this fee has not been refunded.
“We are continually raising awareness of the Code”
It hasn’t improved in the last 8 years! In fact I’ve done more to raise awareness of the CCHB and encourage buyers to use it after they sought my advice.
“so that we can encourage more people to access our independent dispute resolution scheme, including lawyers involved in new home purchases.”
The majority of solicitors being those that housebuilders force or coerce buyers to use even though this breaches requirement 2.5 of the CCHB!
“We are also working on removing/reducing any barriers that may exist to raising a complaint as well as investigating options to raise the maximum award limit.”
This is too little too late. Now consumers will hopefully soon be able to use the new statutory new homes ombudsman:  FREE – FAIR- FOR EVERYTHING

“Satisfaction with new homes has increased according to the Home Builders Federation which surveys new home owners.”
Wrong! Satisfaction has not increased. True it is 2% higher than in the previous years survey at 86%, but still way below the 91% in 2013!

“The latest survey response rate was 62% (57,972 responses), in which 90% said they would buy a new build again. Warranty bodies have also seen a drop in claims raised.”
Spin and PR?  An example of this industry never letting an opportunity for a bit of HBF survey spin pass by!
FACT – 99% of new homebuyers reported defects to their housebuilder within weeks of moving in.
FACT – 41% reported more than ten defects!

There is a danger that Government will bow to industry pressure and propaganda like this, placing limits on the effectiveness and powers of the statutory New Homes Ombudsman.

Bearing in mind the government said it “will work with consumers and industry to develop our proposals and publish more details in due course.”  But is this a delaying tactic? Whatever the perceived necessity for “further work”, the housebuilding industry is grasping it as an opportunity to lessen the impact that a statutory new homes ombudsman will undoubtedly have on their businesses.

Any perceived failure, collusion or delay with regard to the creation of the statutory new homes ombudsman will only serve to increase consumers (voters) existing and growing belief that  government is ‘in bed’ with the housebuilding industry, for example some have already questioned the recent extension of  help to buy to 2023, albeit restricted to first time buyers. It is time that for once government ignored the whining of this broken uncaring industry, one that has been running roughshod over new homebuyers for decades ans is ruining lives. This Hansard debate from 22 April 1998 is as relevant today as it was then Why have so many successive governments failed to act? They must do so now.

 

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Weak mortar – Britain’s crumbling new homes

The great weak mortar scandal – Part Two

Following my first article  exposing the weak mortar scandal, many more new homebuyers have contacted me. It would appear this issue is both widespread and serious. Whatever causes their mortar to crumble, sometimes in under a year, both housebuilders and warranty providers are doing everything they can to limit their costs and keep weak mortar issues quiet, out of the public gaze.weak mortarThe NHBC provide warranty policies for around 80% of all new homes built in the UK. Defective superstructures, which include external walls, is their most common cause of claims accounting for 41% of all claims in the year to 31 March 2017, costing the NHBC £27.2million. Weak mortar cannot be considered as minor snagging, this is the rectification of serious defects often affecting the structural integrity of the home. It cannot be explained away by the industry as a few “isolated cases” either.

Are NHBC Warranty Standards “Raising Standards – Protecting homeowners”?

The NHBC Warranty Standards are in general, recommendations or guidance as a means of compliance, with just five absolute Technical Requirements (in red) these are mandatory and must be met by the builder
Regarding weak mortar, two stand out. R2 Design Requirement;
“Design and specification shall provide satisfactory performance”
and R3 Materials Requirement; “All materials products and building systems shall be suitable for their intended purpose”  That is having “a life of at least 60 years.”NHBC Technical Requirements - Chapter 2.1If Performance Standards (in black bold) are followed, the Technical Standard for that particular work will be met. The NHBC are quick to highlight to buyers that the remainder of the warranty standards are just Guidance on how the Performance Standards may be met and surprisingly, are not mandatory. The NHBC have stated that “failure to follow that guidance does not constitute a non-compliance” [with warranty standards]

With regard to mortar, the Performance Standard is 6.1.14 “Mortar shall be of the mix proportions necessary to achieve adequate strength and durability and be suitable for the type of masonry…”
The Guidance table then state various mix proportions which enable the Performance Standard to be met, using Portland or sulfate resisting cement. No mention is made of cement replacement material such as GGBS. Clearly mortar with an insufficient cement mix proportion, namely less than that stated in the NHBC Standards “guidance” table (from BS EN 1996-1-1), will not meet the “adequate” performance standard required. It is certain that mortar which is crumbling and falling out of joints is not suitable for its intended purpose neither is it of “satisfactory performance”.Mortar mix designations
So what are the NHBC responses when new homeowners who make a claim under the warranty for crumbling mortar?
“We can never guarantee that a property will be defect free”
“The mortar was tested with a flat blade screwdriver [dragged over the surface] and examined for defects”
“I am advised that the cement/lime/aggregate ratios provided in our Standards are guidance only”
“We remain of the opinion……….. to rake out to a depth of 25mm and repoint are [sic] an acceptable method of repair”
“Where issues relating to mortar are concerned, we predominantly rely upon visual assessment of the performance of the mortar to determine our opinion on whether the mortar complies with our Standards.”
“It is the problem associated with exposure and weathering which is the main factor when determining remedial works required”
“Repointing the external walls of your home will ensure our Technical Requirements are met”
“Jenkins and Potter Consulting Engineers [Barry Haseltine] were tasked with providing an independent opinion on the durability and strength of the mortar to your home and provide any necessary recommendations for repair.”
“Under our standards the builder must ensure the Technical Standards are met. Mr Haseltine remains of the opinion that repointing works recommended, if carried out using a specialist contractor, will ensure the durability of the external walls and will also meet NHBC Technical Requirement R3.“
This does not necessarily make the weak mortar behind the repointing “suitable for its intended purpose”

“I am advised that the overall strength of the brickwork comes from the compressive weight of the brickwork and mortar”
The builder is responsible for putting right anything covered by Buildmark that isn’t built to the NHBC requirements. If we don’t consider that the resolution service is appropriate, or if you don’t accept the findings in our report, we may advise you to consider another form of dispute resolution. Bear in mind that your concerns were raised during the builder warranty period (first 2 years), so any action you take will need to be against the builder and not us.”
“You have the right to refer your complaint to the Financial Ombudsman Service (FOS)…. Some aspects of our Resolution service do not form part of our insurance regulated services”

Indeed they do not as the FOS have confirmed to me:
“Generally during the first few years of the policy the cover they provide isn’t an insurance product. And isn’t something we can look in to. “We can’t investigate when NHBC are acting to mediate under their resolution service. But if the resolution report isn’t complied with (deadlines for work are missed for example) the insurance element kicks in and we can then investigate.”

Mortars of Mass Degradation – Prescribed or Design mix?

A “prescribed mix” is one where the mortar is made in pre determined proportions, the properties of which are assumed from the stated proportions (recipe concept). A “design mix” is a mortar whose composition and manufacturing method is chosen by the producer in order to achieve specified properties a compressive strength (Performance concept) The M number being the expected compressive strength in 28 days so an M4 design mix mortar should attain a strength of 4n/mm2. Mortars are given a designation ranging from (i) highest cement content to (iv) lowest under BS EN 1996-1-1.

Mortar manufacturers can now infer the mix proportions of their mortar from compressive strength. BS EN 998-2 states the relationship between compressive strength and mix proportions for a limited range of strengths and mortar compositions in Table 2.

“Whichever type of mortar, in terms of its constituent materials, is chosen, its durability will be enhanced
as the cement content is increased”
BDA

NHBC “leading mortar expert” Barry Haseltine (85)

When a buyer makes a claim under the NHBC warranty eventually the NHBC normally dispatch their “leading mortar expert” Barry Haseltine (85) to the home. Having seen more than one of his reports, I was surprised by the similarity, with identical ‘cut and paste’ paragraphs, despite being at opposite ends of the country, different housebuilders, different mortar suppliers and different mix analysis results. Haseltine alludes to the fact that the mix proportions in the NHBC Standards mix are “a recommendation” and have not been revised since the use of factory produced ‘design’ mortar, covered by BS EN 998-2 in 2010, became more widespread. Haseltine also stated in letters and reports:
 “an M4 design mortar is the same as a 1 : 5-6 cement : sand mix.“

“an average batch volume proportion of 1:7.4 from which it is indicated that the mortar can be taken to agree with the designed mix and so there can be no complaint about it”

Yet in this case, of the 18 samples tested, by five different UKAS accredited testing laboratories, ranged from a best 1:7 to worst 1:9.6. In addition, the mix proportions from the manufacturer’s batch records fall well below the “guidance” mix table in NHBC Standards for M4 mortar, that would be deemed to meet Performance standard 6.1.14 and in turn, the NHBC mandatory Technical Requirements R2 and especially R3. When confronted by indisputable multiple evidence of insufficient cement.
Haseltine says:
it was very common for laboratories not to reach the same results as others. Although I am not a chemist, I believe it is not possible to find more soluble silica, the basis for cement content, than is there but it is possible not to find all that is there.”

“A cement content of 8.5% equates to a volume mix of 1: 9.3; looking at all the test results in my table… I conclude that the mortar mix can be considered to be a designation (iv) on the basis of mix proportions, one must remember that this mortar was a designed M4 mix so mix proportions are not a valid means of checking compliance”

A designation (iv) being a mix ratio of 1:7, equivalent to M2. The cement : sand ratio of 1: 9.3 is even weaker than this and in any case is not the designed M4, designation (iii) required and specified!

No samples were tested from mortar supplied to the site so there cannot be any allegation that the strength of the mortar that was supplied was incorrect. Factory Product Control (FCP) tests do not have to be related to any particular delivery of mortar”

“I would recommend M6 mortar for the repointing”

M6 is 1 : 3-4 cement : sand that is a minimum 25% cement content by volume. This for a new home constructed with mortar proven by laboratory testing, to have just 13% cement content.

Incorrect mortar specified at the design stage

Severe exposure areasThe mortar specified at the outset is often not as required by warranty standards for the level of exposure on certain developments. In geographical areas with ‘very severe’ and ‘severe’ exposure, new homes should be built using a mortar as designation (ii) – M6 which is an equivalent mix of 1:3 to 1:4 cement : sand. The Brick Development Association and Ibstock go further stating that in these areas, the cement used should be sulfate resisting cement (SRC). So mortar required to be M6 due to exposure, when M4 has been specified and used, clearly does not meet the NHBC mandatory technical requirements R2 or R3.

Insufficient cement

It is well known that the greater the cement content, the stronger the compressive strength of the mortar will be. It is relatively simple to take mortar samples from a wall and have them analysed in a laboratory. In most cases when buyers report crumbling mortar, these have proved the mortar has far less cement than is stated in NHBC warranty standards and in Table 2 found in the National Annex provided in BS EN 998-2:2010. In one case, laboratory analysis of samples found the mortar had just 36% of the cement (1:11) required in an area with severe exposure (1:4).

Testing weak mortar

There is no agreed UK or European Standard test method available for assessing the quality of questionable mortar, in-situ. However, when mortar samples have been taken and in one instance analysed by three accredited test houses they were found to contain far less cement (being in the range 1:7.5 to 1:10.5) than that required of a prescribed class (iii) mortar and has been classified as class range (iv) to (v). This casts doubt on the bond of wall ties that require a minimum of class (iv) mortar.

“Once mortar deteriorates it will compromise the
rest
of the brickwork.” BDA

Wall Ties

A weak mix mortar as opposed to say a purely durability issue due to weathering, can have serious structural implications. (The NHBC tend to use the word “erosion” specifically excluded under the Buildmark warranty) In any mortar proved by laboratory analysis to be a mix with a cement content of less than 16% (1:6 – designation (iii) M4), the bond to the wall ties should be considered as inadequate, meaning the brickwork outer wall could potentially fall away from the house in severe stormy weather.

The NHBC’s go-to “mortar expert” concludes the request for testing using a screw pull-out test which records the helical wall tie pull-out force from a 20mm to 30mm depth, 6mm diameter hole within mortar, is “unwarranted”. He says “the results would be very dubious” due to vibration, concluding: “the wall ties are entirely adequate and no work is required to justify them.” but fails to grasp it is the integrity of the actual composite cavity wall that has been compromised by weak mortar, creating an inadequate bond with the wall ties, not the strength the actual wall ties. He appears to completely overlook that it is the performance of the overall structure in adverse weather conditions, especially in severe and very severe exposure areas, that has the potential of structural collapse and in the worst case, even loss of life. Furthermore an unconnected report by Tarmac regarding weak mortar in a Persimmon home stated we are concerned about the fixity of the cavity ties into the outer leaf, which if not suitable will result in the cavity masonry wall mot acting as a composite structure when considering lateral wind loading. A 100mm thick brick single skin wall will be structurally inadequate when enduring high wind loading”

Erosion

The NHBC and their resident mortar expert make frequent use to the term “erosion” in letters to homeowners and reports. Could it be because erosion is not covered by the NHBC Buildmark warranty; “mortar erosion which does not impair the structural stability or protection from the weather” is specifically excluded. So in years 3 to 10, if the matter has not been addressed by the housebuilder, the NHBC can reject a claim and say it was caused by erosion.
Mortar Erosion not covered by NHBC Buildmark Warranty
Cement substitutes:
Ground Granulated Blast furnace Slag (GGBS) and Pulverised Fuel Ash (PFA)
GGBS is a by-product from the production of iron. PFA is a by-product of burning pulverised coal in power stations. GGBS hydration mechanism is more complex and the rate of strength development is slower than that of Ordinary Portland Cement (OPC). Graham True of GFT Materials Consultancy says in his excellent article “What is happening to masonry mortar” that National Annex NA1 guidance based on best UK practice, including limitations on the use of replacing traditional OPC with GGBS or PFA ash, is restricted to specific levels namely 6–35%. One mortar supplier has stated that the National Annex guidance in BS EN 998-2 is just that – ‘guidance’ not ‘mandatory’ – and therefore can be ignored! Graham says: ”On investigation it transpires that GGBS additions are being incorporated at levels well above the recommended limits of 35%, up to 50% and more, of the total cementitious content.”

Even Barry Haseltine, the NHBC’s go-to 85-year old “mortar expert” acknowledged in at least one of his many reports that: “For the last 20 years or so, cement has become a complicated subject compared with the relative simplicity that existed when we had Ordinary Portland Cement and a small number of specialist mixtures for example masonry cement. It is a regrettable fact that mortar has become a potential problem with regard to durability in recent years, probably linked to the use of cements that have considerable proportions of additions which reduce the active cement in the mixes.”

Graham True says: “There has been, and probably will continue to be, issues related to the performance specification of mortar since it currently differs fundamentally from past UK practice but in addition so does the incorporation of high levels of cement replacements, in particular GGBS

Sulfate attack

It is well known that where there is a high risk of saturation and in [very severe/severe] exposed areas, even with an M6 design mix, sulphate resisting cement should be used. Simply put, sulfate attack encompasses a series of chemical and physical interactions that occur between hardened cement paste and sulfates. The soluble sulfate salts within a high proportion of clay bricks react with a constituent (Tricalcium Aluminate) of the Ordinary Portland Cement within the mortar forming calcium Sulfoaluminate (Ettringite). So when sulfate present in bricks is dissolved due to driving rain and saturates brickwork in severe exposed areas, the sulphates present will cause mortar to degrade. For anyone interested in the chemistry.

Importantly for new homeowners with failing mortar, the normal 25mm rake out and repointing with M6 mortar will not have any lasting longevity if sulfates are present in the bricks. In investigations by Tarmac which supplied mortar to Persimmon site in Leeds found “sulfate levels higher than would be normally expected” believing that “the mortar has been subject to sulphate attack and cement degradation over a long period” However, it should be noted that it is in the mortar supplier’s own best interests to find alternative explanations to failing mortar other than incorrect mix proportions.

Use of Non Disclosure Agreements (NDAs)“Gagging orders”

Weak mortar is the housebuilding industry’s dirty secret and it is doing everything it can to ensure it is kept quiet. It has become almost standard operating procedure for housebuilders and warranty providers to require the homeowner to sign a legally-binding non-disclosure agreement (NDA) also referred to as a ‘gagging order’ as part of any compensation settlement, especially when buying the home in question. One buyer on a Taylor Wimpey estate in Peebles Scotland tells me: “over the course of the following few years, houses started to empty with folk just literally disappearing overnight – Taylor Wimpey were buying back houses, probably around 10-12 houses but it was still being kept hushed up.
A plc housebuilder's 'Gagging Order'People were signing gagging orders and therefore kept quiet. Taylor Wimpey sent out letters saying there were a few houses that had mortar issues and scaffolding was to be erected for repair works but not to be alarmed as they were isolated cases.”

I am also aware that the NHBC often require buyers to sign NDA’s perhaps because the last thing either housebuilders or the NHBC need is everyone on the development becoming aware of weak mortar issues in their home and making a similar claim. The Home Builders Federation chief Stewart Baseley said on BBC national radio
I’m a great believer in transparency”  yet the industry he represents, promotes and defends, is anything but transparent.

New homebuyers with weak mortar tell me:

“The NHBC Resolution Service and recommendations are unregulated and totally outside the Financial Ombudsman’s jurisdiction making it open for abuse and for the NHBC to look after their direct customer, their housebuilder registered members.  It seems all the NHBC need to do is actually offer their Resolution Service in the first two years but they then have an open book to recommend whatever they want as we all know.” (e mail)

“The NHBC Consumer Affairs Manager made claims which contradicted their own findings report and they also went on to say that my mortar tests were meaningless and that the Mortar M classification rating system is only a guidance, and that BS EN 1996-1-1 Eurocode 6 can be ignored.” (Social media)

Yet the NHBC standards clearly state that the builder must comply with “relevant standards” this includes BS EN 1996-1-1 Eurocode 6 states: 3.2.2 Specification of masonry mortar (1) Mortars should be classified by their compressive strength, expressed as the 1etter M followed by the compressive strength in N/n1m2, for example, M5. Prescribed masonry m0rtars, in addition to the M number, will be described by their prescribed constituents, e. g. 1: 1: 5 cement: lime: sand by volume. 

NHBC have known about weak mortar issues for many years

NHBC Technical Newsletter July 2000 Issue 20
The consequences of getting it wrong are well known to NHBC. At the least it may mean raking out all joints and repointing and at worst it can be removing the outer leaf and rebuilding. The problem is that too little cement is added to the mix to ensure that the strength is achieved and, perhaps more importantly, the hardened mortar is durable.”

“Take appropriate action to ensure that the right mortar mix is used. The consequences of not doing so are costly and can easily be avoided. NHBC inspection staff will be looking at mortar more closely and may take samples for analysis where they believe the mortar is not up to strength.”

NHBC- "Low strength factory mortar"

NHBC Technical Extra September 2013 Issue 11

So why have warranty standards not been revised to reduce the likelihood of failing mortar in new homes?

Why have cement replacement materials such as GGBS not been banned in masonry mortar? Especially as the reduced cement (OPC) is more vulnerable to attack from sulphates in bricks.

Why have the NHBC Standards not been revised to include BS EN 998-2 2010 for factory supplied “design mixes” and requiring testing of site mortar samples by housebuilders to ensure compliance? 

Opinion

This industry must recognise the threat to UK homes posed by failing mortar. It must not be deliberately hidden, with homeowners that do reach agreement being legally silenced by NDAs. If Toyota can issue multiple recalls to around 7.43million car owners worldwide, surely the housebuilding industry has a duty to be open about weak mortar in new homes. This issue isn’t going away. Tens of thousands of new homes could, and in all probability do, have weak mortar. Many more are currently being built. As Jo Churchill MP for Bury St Edmonds said in the House of Commons debate on poor quality new homes:“…the repointing of joints on walls where purposeful demolition and reconstruction should have happened”

Nevertheless, “repointing to a depth of 25mm” is deemed by the NHBC as the industry’s normal practise where repointing works are required”  This, even when independent laboratory tests prove the cement content of factory-made design mix mortar is well below that required to achieve the durability, weatherproofing and structural performance required and when it is highly likely not to have “a life of 60 years” a definition of compliance with NHBC mandatory Technical Requirement R3

It is in my opinion inconceivable, that the NHBC’s “leading mortar expert” is not acting for and in the NHBC’s best interests, to limit the potential cost of weak mortar claims by understating and dismissing clear factual evidence of inadequate cement content in failing, independently tested, mortar samples. His repeated opinion and reliance is on the single fact that a ‘design mix’ need not meet the listed mix proportions solely on the basis that it is not a ‘prescribed mix’ and mix proportions cannot therefore be used to judge compliance with masonry codes and has no scientific basis of suitability or performance justification whatsoever.

The NHBC themselves do not cover themselves in glory either by making assumptions and dismissive statements in their letters to homeowners whose homes in some cases, are clearly and quite literally, disintegrating. Opinions are not fact. New homeowners that have homes built with mortar with insufficient cement content that is crumbling is an undisputable fact. The best they can hope repointing, without any investigations into the mortar bond strength with wall ties, the use of cement replacement such as GGBS or possible sulphate attack.

Unfortunately, this is an industry that runs roughshod over the interests of new homebuyers, fobbing them off with questionable expert opinions and interpretations, whilst hiding behind NDAs. Perhaps James Brokenshire’s  recent announcement of statutory New Homes Ombudsman will force  change.

Conclusion

Given the cost, disruption to homeowners and potential further reputational damage in this already tainted industry, you would expect that warranty providers would be updating their standards to reflect the now widespread use of factory produced mortar and covered by BS EN 998-2. If housebuilders persist in their apparent preference for design mix factory mortar, they must be required to take mortar samples during construction for their own independent testing, rather than relying on the manufacturer’s in-house test results.

Graham True told me: “I just do not know why the house builders can’t use the correct mortar. The cost difference is minimal. They should be made to use a Prescribed Mix since the Design Mixes fail.”
I totally agree.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Statutory New Homes Ombudsman Announced

Government announces creation of statutory New Homes Ombudsman

Jo Leoanard's New Homes Ombudsman T ShirtMonday 1 October 2018 was a good day. It has been over 4 years since I began my campaign for Government to set up a statutory, stand-alone new homes ombudsman, providing new homebuyers with a an independent unencumbered means of redress:
FREE  *  FAIR  *  FOR EVERYTHING.
It’s been a long, hard, time-consuming and often lonely campaign.  I have, as they say, been there, done it, got the T Shirt.
See #NewHomesOmbudsman on Twitter

Over recent years, especially after the APPG EBE Inquiry into ‘Quality of New Homes in England’ published their report on 13 July 2016, the house building industry has had ample time to change its focus and priority towards their customers and improve the overall quality of homes they are building. They have failed to do so, whatever the industry’s in-house surveys “to provide data to rebut negativity” may indicate, as more and more new home buyers are forced out of their homes to enable serious, often structural remedial works to take place.James BrokenshireSo I was delighted to hear James Brokenshire’s announcement on Monday that a statutory new homes ombudsman is to be created, with legislation requiring all developers and housebuilders to belong to the new homes ombudsman. This follows the government’s consultation earlier this year on consumer redress in the housing market which closed on 16 April – the feedback report still yet to be published.

Secretary of State – James Brokenshire – 1st October 2018

Speaking at the Conservative Party conference, James Brokenshire acknowledged the need to “address quality issues in new homes” saying:

“That’s why I can announce today the creation of a New Homes Ombudsman. This new watchdog will champion homebuyers, protect their interests and hold developers to account. And give confidence that when you get the keys to a new home you get the quality build you expect and the finish you’ve paid for. “

This will help ensure consumers buying new homes will have an independent and legally backed route of redress against developers who do not deliver what they promise.

We want to protect consumers and ensure everyone has a great place to live and raise a family, currently there is no statutory process to bring redress.”

A pre conference press statement said:

“We are creating a New Homes Ombudsman to protect consumers and give them confidence that when things are not right in their new home they have a route of redress. This will also discourage developers from cutting corners and putting unfinished homes on the market.

Our plans will help to ensure that new-home owners have better rights and everyone has a great place to live and raise a family.

According the Home Builder’s Federation [HBF] and the NHBC, 99% of new homebuyers report snags or bigger defects after moving in. Developers have been found to put homes on the market which are incomplete, with issues such as wet paint, poorly fitted doors and other defects.

Whilst most developers do resolve issues there is no standard order of priority, meaning a consumer does not know if it will take one day or three months to resolve a problem, irrespective of how serious it is. Having paid a significant sum of money to buy your home it can be stressful and deeply frustrating to deal with issues which most people would assume have been resolved through the building process.

 Our solution: We are creating a new statutory ombudsman specifically for new homes to address these concerns. The role will specifically address problems of build quality in new homes.”

There has been surprising scepticism and negativity from some homebuyers on social media following the announcement. Comments such as: 

What teeth will they actually have to redress any issues at all?”
“We need to watch the terms of reference very closely indeed.”
“Sadly, it won’t help me in Scotland”
“Waste of time. It’ll just be another organisation that receives back-handers from house builders, so they turn a blind eye to any problems.”
“It seems will only cater for people in their first 2 years only.”
“Great news but devil will be in detail, and that’s not being negative.”
“A very short comment with no timescales. The leasehold ban and peppercorn ground rents. Leasehold reform was agreed on last Christmas but here we are with no timescale and no progress!”
“It’s certainly a step in the right direction as long as they get on and do it!”
“It doesn’t mean Consumers Rights have changed”
“Will this cover current new home owners?”
“Good news, if the ombudsman has the power to hold developers to account. Big question, will they deal with historic cases & if so, have far back?”
” I’ll be watching with interest. You can perhaps understand some cynicism where government are involved.”
“Too little too late.. AGAIN!”
“First job, shut down the NHBC”

But make no mistake, this is the most significant positive step change for new homebuyers in the last 53 years. The NHBC was formed in 1936, beginning its life as the Housing Improvement Association, established by a group of builders with the object of giving homeowners a fair deal at a time when “jerry building” was a national concern. Some buyers would argue nothing has changed! Later, in response to the growing concerns of the Building Societies Association, the ten-year structural warranty was introduced in 1965.

The government and the then minister Sajid Javid, had previously indicated a preference for one single ombudsman for the entire housing sector, encompassing new homes, social housing, private sales and lettings. It seems unlikely that the statutory New Homes Ombudsman would have been announced if a single Housing Ombudsman was still part of Government plans.

The New Homes Ombudsman will  support homebuyers facing problems with their newly built home, protecting the interests of new homebuyers and holding developers to account when things go wrong.

I would like to thank the many MPs and new homebuyers who have supported my campaign, who, together with the national press, have brought the issue of poor quality new homes and the need for a statutory new homes ombudsman to the forefront. I am however surprised that none of the national press have covered this announcement.

It is a great personal satisfaction to me that I have effected change for the betterment of all new homeowners. It is to be hoped that the new statutory new homes ombudsman will be 100% independent of industry interference and influence. Obviously, the ‘devil will be in the detail’. I now await the publication of the feedback response from the Government Consultation ‘Strengthening consumer redress in housing market’ which closed on 16 April 2018. 

The government confirmed it “will work with consumers and industry to develop our proposals and publish more details in due course.”  Why? There is no need, the consultation has been done, the responses are in, there has even been an APPG Inquiry into the “potential and detail” of a new homes ombudsman  would work! In the meantime, government expects industry to continue to improve the current redress arrangements and improve the consistency of quality for new build homes.

Most new homebuyers asked me when the new homes ombudsman will be operational. I think the next announcement should include a timescale which I suggest should be “by 2020” at the latest.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

MPs back plan for New Homes Ombudsman

Housebuilders must belong to New Homes Ombudsman to provide better redress for dissatisfied new homebuyers. 

In its report, published on 26 June 2018, the All-Party Parliamentary Group for Excellence in the Built Environment called on the government to make it mandatory for all housebuilders to belong to an independent ombudsman scheme.

Close but no cigar, that’s my verdict on the All Party Parliamentary Group EBE report from their secret, behind closed doors, inquiry sessions in “February and March”  “looking into the potential and detail for a New Homes Ombudsman.”  The good news is the report acknowledges that: 

“Buying a defective new home can take a massive toll on people’s wellbeing as they wrestle with an almost Kafkaesque system seemingly designed to be unhelpful. We cannot allow this to continue. Consumers desperately need greater leverage to drive a change in this culture in order to ensure that housebuilders put them at the heart of what they do.”

Kafkaesque: bureaucratic delays, a situation that is confusing and frightening, especially one involving complicated official rules and systems that do not seem to make any sense, a nightmarishly complex, bizarre, or illogical quality.

 

Better redress for new homebuyersMuch of this latest APPG EBE inquiry report, (published 27 June 2018), repeats previous recommendations of the 13 July 2016 Inquiry report strangely titled More Homes Fewer Complaints .  Indeed this report could also have been more accurately titled “Better redress for new homebuyers” as it concerns a New Homes Ombudsman. However, the title belies the government’s preferred option of a New Homes Ombudsman within a wider, ‘single portal’, general “Housing Ombudsman” however, due to the technical nature, suggested new homes disputes would need their own separate and bespoke operation” Even the HBF agree with this, but government should be mindful that HBF’s motivation may be an attempt to retain industry control and influence over any stand-alone new homes ombudsman.

The report states : “We have been heartened to hear of efforts to improve performance from the Home Builders Federation (HBF), senior management at many housebuilders are taking steps to address the multiplicity of issues” according to the HBF. It was a great pity that the person that originally proposed the idea of a dedicated new homes ombudsman at the 2015 APPG EBE inquiry, was not even invited to orally rebut this industry-led smokescreen of lies and untruths. On page 20 Box 3, the HBF director of communications did a sterling job using words such as “put schemes in place” “progressing” “developing” “working with” “prepare” yet not one shred of “we have done” in the two years since the first inquiry report was published. He even claimed that the spectacular fall in satisfaction levels over the last five years (over 8%) in the industry’s own survey, “had been arrested” by a blip upwards of just 2% last year. I believe this is more a result of industry manipulation rather than any perceivable genuine increase in overall satisfaction levels. Recommendation 10 of the previous inquiry report was that the HBF annual customer satisfaction survey be more independent. Has the HBF progressed this?  No, there has been not a single change.

Indeed, reading this inquiry report it can be concluded that various interested parties within the industry (HBF, Consumer Code for Home Builders (CCHB), Consumer Code for New Homes, NHBC, LABC, Ombudsman Services, and Housing Ombudsman, all gave oral presentations) have their paw prints all over this report. The report concluding: We were encouraged by a more positive tone from housebuilders, warranty providers and operators of consumer codes of conduct than we encountered in our first report”  Perhaps this only because of the growing likelihood of an independent new homes ombudsman who will making honest rulings on the facts and award justifiable, meaningful compensation. Whilst also making those operating various industry-led consumer codes redundant.

It was however encouraging, that many of the points made in my written submission were included in the inquiry report, including requiring housebuilders to buy-back their most seriously defective new homes.

So what is the good, the bad and the ugly?

The good

Need for a New Homes Ombudsman is recognised

New Homes OmbudsmanOn a positive note the APPG EBE again acknowledges the need for an independent new homes ombudsman, free to consumers and funded by a levy paid for by housebuilders. I suggested £100 per home built. The report suggested £50 per home, raising £8.5m a year (170,000 homes). The HBF accepts their industry should pay. Nevertheless despite to obvious need for a new homes ombudsman, which even the industry itself appears to now accept is inevitably required, the Government has done nothing at all to help new homebuyers, which this report acknowledges are “going through hell”, “fighting redress was taking a toll on their health”. One distraught new homebuyer even told me last week that he was considering killing himself!

Housebuilders forced to buy back defective homes

The report recommends (as I did in my written submission) “that in certain extreme situations, the New Homes Ombudsman should be able to reverse the sale of the property”  The re purchase price should be at current market value to include all associated moving costs, stamp duty, legal fees, carpets and curtains etc.

All New Homes Ombudsman rulings to be made public

This is to “flag up trends in housebuilders’ performance and publish annual reports collating awards made throughout the year.” This would enable future potential new homebuyers to see the worst offenders.

Tough sanctions

“A statutory requirement that any organization building and selling new homes belong to the New Homes Ombudsman to be able to trade.”
“If they are struck off, they lose the ability to operate.” 

Review of warranties

“To see if they are fit for purpose for homebuyers and to establish and easier form of redress with warranty providers as part of a New Homes Ombudsman role.”

The bad

No separate stand-alone new homes ombudsman (NHO)

It remains to be seen if the NHO staff at any housing ombudsman would be sufficiently skilled, with adequate technical knowledge to fully understand and rule on the technical aspects of building defects, warranty standards and building regulations.

No case fees

Case fees would to penalise the worst offenders but the committee thought “the disadvantages would out way the advantages.”  If there are no case fees, there is no financial incentive for housebuilders to attempt a settle a complaint without recourse to the Ombudsman. 

New home ombudsman to only cover disputes within first two years

This is a let off for housebuilders. The only reason given was that it “mirrors the duration for the housebuilders’ liability for defects. However, the 2-year timescale does not bring warranty schemes under the new homes ombudsman jurisdiction, despite the committee acknowledging my observation that the The Financial Ombudsman Service (FOS) is not the best organisation to preside over technical disputes.”  New home warranty providers would not be included in the new homes ombudsman scheme as they are already covered under the FOS. 

Awards made by the new homes ombudsman to consumers would limited to £50,000

Whilst this is better than the pitiful £15,000 maximum of the CCHB, it does not go far enough given the cost and inconvenience to owners with serious defects. Going to court is not an option for new homebuyers. Housebuilders have deep pockets would and do, fight every buyer legal action, settling subject to a non-disclosure agreement for fear of setting a precedent. Amazingly, the report concludes that the NHO should operate along the lines of other ombudsman to ensure “the consumer not be out of pocket and that their financial status is restored to what it was before the complaint.” This clearly isn’t going to work for new homebuyers with many having to stay in temporary accommodation whilst their homes serious defects are remediated. Sadly this demonstrates the lack of understanding by the committee of the overall problem faced by new homebuyers, something which I could have helped with had I been invited to give an oral submission. 

The report recommended that any new homes ombudsman would not be statutory, despite a number of witnesses recommending this to the inquiry committee.

There is little point of asking for expert opinion if when given, it is then ignored. This is being suggested purely in the interests of simplicity and speed “because it can be set up more easily and quickly. Our overriding concern is to see consumers getting better redress as soon as possible.” It has now been over two years since the first inquiry report “Key” number 1 recommendation being the setting up of a new homes ombudsman. Why has government failed to do anything regarding setting up an ombudsman for new homebuyers’ redress, when it is obviously time critical? Indeed the Government’s own consultation  which ended on 16 April 2018, has not even finished “analysing feedback” over 3 months later!

The Ugly

A new “Industry-wide code of practice”

There are apparently seven consumer codes regarding new homes – “all different but sharing a general lack of obligations placed on home builders.” The Property Ombudsman said that the Codes “are written in a way to suggest that they exist to contain complaints” which indeed they do, all being set up following The Consumer Protection for Unfair Trading Regulations 2008.

But the worst part of this report is the proposal for a new “industry-wide code of practice, with government, warranty providers, housebuilders and consumer groups working together, in consultation, to draw up a code that would be used by the new homes ombudsman (NHO) to adjudicate on disputes.”  Not only will this give the industry an opportunity to influence what the new homes ombudsman can and cannot rule on, it will also mean the NHO would be shackled by the requirements of a single, industry-approved code of practice, which many housebuilders will be able to circumnavigate as they currently do with their own CCHB. I cannot think of a single ombudsman, in any sector, that can only adjudicate within the confines of a specific industry code. No single code could possibly cover every eventuality for new home consumer redress. It gets even worse with the HBF suggesting that “a detailed set of finishing standards for an ombudsman to apply when assessing the merits of complaints and resolving disputes” no doubt in their mind the housebuilder’s existing NHBC ‘Get out of Jail Free’ card The Consistent Approach to Finishes which is used to justify atrocious workmanship standards as permissible, if deemed “within tolerance”

It remains to be seen whether this APPG EBE Inquiry Report is given any consideration by government. Clearly, none of recommendations of the previous inquiry have been implemented. In the meantime, every week many thousands of new homebuyers move into homes that have defects, often serious defects, only to discover housebuilders and warranty providers are failing them. It is time the government stood up to ‘big housebuilding’ and set up an independent New Homes Ombudsman without any further unnecessary bureaucratic delay.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Housebuilding industry attempts to derail the setting up of an independent new homes ombudsman.

As the Consumer Code for Homes Builders (CCHB) fights against its own imminent extinction, an ever growing recognition that a fully independent New Homes Ombudsman is gaining traction and support in government circles. The CCHB starts to “bend and amend” in an vain attempt to head off fully independent consumer redress, which would make the CCHB redundant and take control of buyers’ complaints away from those paid by the industry, to safeguard housebuilders’ vested interests.

The APPG Inquiry in 2015 and the subsequent report published as long ago as July 2016, stated as its number 1 “key recommendation” that a New Homes Ombudsman be set up by government. Indeed it went further saying that the Consumer Code for Home Builders “was limited in its scope” and “did not give a satisfactory form of redress.” The CCHB does not, as it so often claims, “give new homebuyers extra protection”. It is merely the industry’s interpretation of requirements of existing laws such as the Consumer Protection from Unfair Trading Regulations 2008.

So what are Noel Hunter Chairman ‘Consumer Code for Home Builders’ Management Board suggestions to the Consumer redress consultation?

1.2 An Ombudsman will not deal with issues of build quality and customer service which have concerned consumers but would simply address the problems that arise. A more fundamental approach to improving the quality of all new homes is therefore essential, and that is what the Consumer Code for Home Builders (“the Code”) is working to achieve.

"limited in its scope" - The Consumer Code for Home BuildersNot true. A fully independent, government-appointed new homes ombudsman (NHO) would force housebuilders to look at what they do. All complaints to the NHO would be public and through meaningful, justifiable compensation payments housebuilders would be forced to improve the quality of the homes they build. The Consumer Code for Home Builders has been in existence for 8 years and it is a quantifiable fact the overall quality of new homes has fallen over that period. “Working to achieve”? – maybe, but only now a new homes ombudsman is about to make the CCHB redundant.

1.5 We are currently working with the Home Builders Federation, Homes for Scotland and others in the home warranty and home building sector to find an industry-led solution that could more easily be implemented to address concerns in the new home build sector.

“Find an industry-led solution”? The CCHB was industry-led and was found by a government inquiry to “not give a satisfactory form of redress” This profit-driven industry has had the last twenty years to improve quality and customer service when buyers report defects. It has failed all-ends-up to do so. It is not about doing what is “easily implemented” but doing what will be better and most effective for new home buying consumers.

2.5 Whilst we are supportive of the Communities Secretary Sajid Javid’s desire to improve consumer protection within the housing sector, we do not believe that a single Housing Ombudsman will provide the solution given the complexities involved in the construction and sale of new homes and the very different issues within the broader housing sector relating to second-hand homes, the rental market and social housing sectors, by way of example.

On this we can agree. The CIOB also agree that a separate, stand-alone New Home Ombudsman is required their spokesperson told me: “it shouldn’t be about condensing all the work of the various ombudsman but in fact offering something that really meets the needs of the consumer”

2.8 However, on those occasions where there are matters that need to be addressed, an Ombudsman will not be able to deal with any intrinsic systemic and operational issues within a specific home builder company that do concern those consumers, but will simply address the problems that arise. A Consumer Code can work with builders to ensure quality is further raised across the board.

“Can work with builders to ensure quality is further raised”  The quality of new homes has got worse, it has never been raised at all. More and more new homebuyers are contacting me in distress, due to their indifferent housebuilders failing, to not only fix defects in their homes, but even to recognise their own responsibility to do so. There are also increasing instances of buyer’s dissatisfaction with the way NHBC deals with buyers’ warranty claims. How could the CCHB possibly ensure quality is raised, when it hasn’t even managed to get plc housebuilders to abide with the basic 19 requirements of the CCHB in 8 years!

3.2 Since its launch, the Code has led to a step-change in how builders deal with customers through the sales process and is now in its fourth edition. It has been reviewed three times with wide consultation across the industry; consumer groups and Government, most recently in 2016 whereby the review was overseen by a former Director General of Fair Trading. Each time, the Code has been updated and improved to provide greater protection for consumers.

Four revisions to the CCHB in 8 years! “Updated and improved” – for who? The latest CCHB evision making it more difficult for new homebuyers to get justice. The CCHB is not even a Chartered Institute of Trading Standards approved scheme!

Moving forward
4.1 All that said, to further improve consumer protection and address any identified gaps when dealing with new home problems, we are working closely with the HBF, Homes for Scotland and representatives from other warranty providers. To date, those discussions have included:
• Working towards a single common Code;
• Working towards an agreed set of warranty standards which conform to best practice;
• Improving the independence of the existing governance structure;
• Improvement of the existing Independent Dispute Resolution Scheme(s) by way of providing free access to consumers and extending it to cover any gaps identified between the home builder and the home warranty cover in relation to dealing with quality issues;
•  Implementation of an Ombudsman redress scheme.

All of which is too little, too late. It is ONLY now being looked at because of the threat of a fully independent, government-appointed, new homes ombudsman. Otherwise why haven’t the CCHB and the industry acted before now? The Barker Review was way back in 2004 and the Office of Fair Trading Market Study of Home Building in the UK published in October 2008, both many years ago!

7.2 However, we believe it [CCHB] can be strengthened further by making it more independent of the Industry. This would not preclude the Industry being represented on the Board; on the contrary we believe that this would be desirable in the interest of reaching effective and practical solutions. However, the Board should be balanced, but with a majority of independents. Plans are already in place to make such changes.

The CCHB will never be independent of the industry. Its tentacles will be all over it, even with “independents” on the board. The NHBC has a council from many disciplines, but it has been controlled and influenced by housebuilder representation. Only a government-appointed new homes ombudsman, accountable and answerable to government, would be truly and demonstrably independent.

8.1 We are currently looking at ways we can improve the existing Independent Dispute Resolution Scheme by way of providing free access to consumers and extending it to cover any gaps identified between the home builder and the home warranty cover in relation to dealing with quality issues.

The CCHB should have included defects, poor quality and warranty issues but these were and still are, specifically excluded to protect housebuilders and warranty providers, not new homebuyers.

8.2 You have asked within your consultation whether purchasers of new build homes should have access to an Ombudsman scheme; we consider that the importance is not necessarily whether it is an Ombudsman scheme, but more that there should be access to an Independent Dispute Resolution Scheme that can determine on issues that arise.

Unsurprisingly, as a proper new homes ombudsman would make the CCHB redundant. IDRS has not served new home buyers within the “limited scope” of the existing CCHB. Far too often, even when buyers succeed, payments are a small fraction of what was justifiable.

8.3 Whilst we understand that the Property Ombudsman and Ombudsman Services (Property) have proved to be effective in addressing issues with estate agents in the second-hand homes market, our Code along with others in the sector already use CEDR Ltd:  They are the leading independent commercial Alternative Dispute Resolution (ADR) provider in Europe and one of the largest and leading ADR organisations internationally, dealing with over 300,000 people in commercial disputes and resolving over 100,000 consumer disputes across 30 differing sectors.

CEDR Ltd are indeed a commercial ADR, As such they have commercial interests to protect. An independent new homes ombudsman would be non commercial: FREE – FAIR – FOR EVERYTHING

8.4 CEDR Ltd are accredited with the Chartered Trading Standards Institute under the ADR Directive and are an associate member of the Ombudsman Association and we are already in discussion with them as to how they may alter their services to meet Government’s expectations.

CEDR may well be accredited with the Chartered Trading Standards Institute (CTSI) but the CCHB is not approved by the CTSI.

8.6 We do not believe an Ombudsman scheme in isolation would, or could, offer the same levels of protection to consumers as home buyers currently have under the Code as it would not, by definition, embody a compliance regime as referenced above. A voluntary Ombudsman scheme inevitably would not engage all home builders as happens with the current warranty-led scheme where involvement in the Code is made mandatory by way of the warranty bodies’ Rules of Registration.

As previously mentioned, the CCHB does not offer any “protection” to buyers whatsoever! A New Homes Ombudsman scheme would not be voluntary at all. Every housebuilder would be legally required to be bound by its decisions and scrutiny, paying a levy based on the number of homes each build.

8.14 Many of the issues being raised recently in the media are deemed to be “snagging” issues. This is a broad term and further clarity on what this means would help – some may be quality issues, others maintenance issues that appear over time as the property “settles in” and dries out, and others might relate to work that needs to be completed. An agreed timeframe for resolution of defects may reduce the volume of complaints and it is then possible to consider that those that are not dealt with in that time could then be escalated either through the home warranty provider or failing that, the Independent Dispute Resolution Scheme.

This is typical of this industry, to attempt to minimise often serious defects in new homes as minor, snagging, or maintenance issues after “settling in”. In reality, thousands of new homebuyers have recently found a voice and engaged with the media to make very public the extent and often serious defects in their new homes, such as missing insulation, weak mortar, defective render and issues with timber floors.

Increasingly, buyers are required to move out of their dream homes whilst their homes are torn apart and (hopefully) defects are rectified. It is neither fair nor just that in these instances, many of which cause ill health due to the stress and anxiety caused by housebuilders’ persistent denial of obvious issues, that there is currently no independent mechanism for justifiable compensation to be paid. An independent new homes ombudsman would address this gap.

8.16 Given all of these issues, we would suggest that a time-limited and independent study is carried out to review the way in which quality issues are dealt with, and to identify the gaps which an independent dispute resolution service would be best to address. Such a study would ensure consumers are fully covered for all matters of complaint in the future.

The last thing beleaguered new homebuyers need is yet more delay. There is no need for a study, this industry knows full well the serious nature of defects, poor quality and how it acts towards its own customers. It chooses to do nothing. Further consultations, calls for information or green and white papers will only give more delay. What is needed is action, the setting up of a new homes ombudsman as soon as possible.

Sanctions
9.1 In respect of your consultation question around what kind of sanctions should a redress scheme have access to, we do not believe the purpose of a redress scheme is to act as a regulator but rather the purpose of the scheme should be to put the individual back in the position they would have been in had the service failure not occurred.

A redress scheme that does not actively punish or sanction miscreants or act to prevent reoccurrence of similar complaints will be ineffective and not give consumers the redress they deserve or seek. To “put the individual back in the position they would have been in had the service failure not occurred.” With new homes would mostly mean remedial works to bring the new home up to the required standard. It would not address the issue of compensation for inconvenience and stress caused both before and during the required works.

Publication of decisions
10.2 A large business may receive more complaints just by the nature of the volume of homes sold but that may not mean that it is worse than perhaps a small business that might receive one or two cases, which could, therefore, indicate a more severe problem. Consumers often only look at the volume of complaints and perception is often the more complaints the worse the company.

The more complaints the worse the company is a fairly logical conclusion. Barratt (17,395 homes) have fewer complaints than Taylor Wimpey (14,842 homes) and both have fewer complaints than Persimmon (16,042 homes) – based on HBF survey star rating and social media. With a housebuilder league table, new homebuyers would be able to avoid the worse of the plc housebuilders, or at least know what they were letting themselves in for!

10.3 Trends data and context is key here and while we would not oppose the publishing of such information, it nonetheless should be in a considered and balanced way given that consumers will often buy a new home due to the location and affordability as opposed to the identity of the developer building it.

“A considered and balanced way”? In other words, in a way that the industry approves of.

Next Steps
11.1 The consultation asks if there should be a statutory body and our concern is that this will require parliamentary time to establish, which could take several years through the legislative framework. 90% of the home building industry is already supported by, and complies with, our Code and we believe that by finding an industry-led solution, we can increase the cover.

Time is of the essence. The only delay being government lack of urgency. Any legislation could be sorted out in a week if there was a will to do so. Implying a new homes ombudsman would take several years as a justification to trust the existing and failing CCHB to “find an industry-led solution” is ridiculous. That time has long since passed as Tony Lloyd MP for Rochdale said:
“We must have not a nice, cosy, industry-led ombudsman, but an ombudsman process that has real teeth and the capacity to make a material difference” During a debate in the House of Commons the then APPG EBE chair Jo Churchill said: “I applaud the Department for Communities and Local Government for getting the Home Builders Federation to look into the voluntary ombudsman scheme, but perhaps the time for any such voluntary scheme has passed.”

11.2 By expanding its remit to cover the issues currently being faced by home buyers in relation to redress, and by working with others within the home warranty and home building sector, supporting HBF, we believe we can provide an industry-led solution that could more easily be implemented with support of both the industry and key stakeholders.

The CCHB had an opportunity to “expand the remit” during the fourth revision to the CCHB.  Yet the latest incarnate of the Code made it even more difficult and placed new obstacles for new homebuyers seeking redress.

11.3 If agreed, we will continue to work with HBF, Homes for Scotland and other colleagues to address the issues raised within the consultation setting out a framework and agreed timetable for implementation.

In other words work with the wider industry to protect its interests and ensure that any new homes ombudsman redress scheme is managed and set up by the industry, no doubt as the CCHB was and will be “limited in its scope” and “not appear to us objectively to offer consumers a wholly satisfactory form of redress”

The British new homebuyer deserves better from government! The CIOB hold the view that only a fully independent New Homes Ombudsman, by its very existence, would drive housebuilders to reflect on the work they carry out and drive them to aspire to ‘do better’ in the knowledge that their customers can complain to an independent ombudsman.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Are new homebuyers taken in with bogus builder star rating?

Home Builders Federation (HBF) 8-week “Satisfaction” Survey 2018

So six months after the industry’s in-house “customer satisfaction ” survey year-end on 30 September 2017, the HBF have finally released the results. So what do they say to the new home buying British consumer?
HBF 8-week Satisfaction Survey

The HBF claim “Homeowner satisfaction with new homes remains high”

Despite the HBF survey responses being repositioned this year, (with the key question “Would you recommend your builder to a friend?” buried in the third row!) the ongoing failure of this industry to its customers cannot be hidden.
FACT: Whilst the “Would you recommend your builder to a friend?” key star rating question score this year was 86% – up 2% on last year’s nine-year low of 84%, it is still at the same level it was in 2011 so no improvement.

“As output has risen, so quality has fallen – The evidence points to an industry…..which will at times ride rough-shod over dissatisfied buyers”+++ This demonstrated by the fact that 4% fewer than would recommend their builder, would buy another new home from any housebuilder.

Credit is due for the slight increase the number of surveys issued and the percentage returned. Out of 156,120 new homes built by housebuilders in the survey year, 93,444 (73%) surveys were sent out to the 127,800 private new homebuyers with 57,972 (62%) returned. Avant, rated 2 stars in 2016 are now 4 star rated in just two years, with a 193% increase in their “sample size” over that period.

The HBF say their Star Rating scheme:
“awards participating members a star rating based on the survey results is now an established barometer of performance and a widely used industry marketing tool. The survey also helps participating members identify areas they can improve and is used by HBF to rebuff unwarranted criticism of our industry.”

“Identify areas they can improve”
Taylor Wimpey have been rated 4 stars for the last 4 years, one of the few housebuilders to publish their actual percentage for the key star rating question – 87% (2014); 86% (2015); 85% (2016) and 88% in 2017. Just a 1% improvement over three years! Persimmon have been 3 star rated every year over the same period.

HBF 8-week Satisfaction SurveySurvey results “used by HBF to rebuff unwarranted criticism of our industry.”

Well they try to. The fact is, 99% of homebuyers reported defects in their new homes to the housebuilder within a few weeks of moving in. For the second year, 41% reported more than 10 defects. Imagine if virtually all new cars had defects? If housebuilders built cars, many would be on our roads with defective brakes and wheels falling off!

Why does the HBF not publish individual builder results for every question?
John Stewart HBF Director of Economic Affairs told me back in 2011:
“From a personal perspective, I think publishing more detailed company results would not have had any more impact on raising customer satisfaction among new home buyers. But it would most certainly have provided food for those who are prejudiced against the industry and simply seek to criticise. I see no value in this.”  

Yet according to HBF chief Stewart Baseley who is by his own admission says he is “a great believer in transparency” – “achieving such high levels of customer satisfaction, whilst delivering the steepest increase in the rate of house building we have seen for 40 years, is a considerable achievement.”
Considerable achievement? Well Bovis are still rated just two stars. This despite building 332 FEWER new homes last year – a drop of over 8% on the previous 12 months, according to the company, to “focus us once again on delivering high quality product and service to our customers.” Bovis have became the only plc housebuilder to be rated 2 stars in consecutive years, with less than half of Bovis’ buyers completing the survey.

Quality and satisfaction are not the same

To many, being “fairly satisfied” does not indicate full satisfaction, yet the structure of the HBF survey adds the “fairly” score to the “very” to get the overall “satisfaction” score the HBF publish.  In addition, a heavy emphasis is placed on the Yes/No responses to “would you recommend your builder to a friend?” It could be argued that many would, give a ‘Yes’ purely on the basis their experience was “not that bad” rather than “terrible” which would be a ‘No’. This is borne out by the result from the second question: “how likely would you recommend your builder to a friend?” with just half indicating a positive response. In addition: “NHBC 9-month customer satisfaction survey scores generally 5-10% LOWER than the HBF 8-week survey”+++ These 9-month survey responses have never been made public!

The HBF claim these latest results: “once again prove the industry’s commitment to achieving the highest levels of customer service and satisfaction. The results have been achieved over period that saw the steepest increase in house building activity we have seen for 40 years.”
Well not exactly. The number of total new homes built in 2017 was 162,490 still below the peak of 168,640 to 30 March 2007. As for the “prove industry’s commitment to achieving the highest levels of customer service” this is a disgraceful statement considering the nightmare that thousands of new homebuyers are suffering across the country, due to the ineptitude of indifferent housebuilders. Tell that to the 11,000* buyers – equating to 8.4% of all new homes completed in 2017 – that make an NHBC warranty claim every year, 30% ** of which are within the initial two-year period when housebuilders are responsible!

In addition to the high level of Customer Satisfaction revealed by the survey, the industry also has its own self-imposed Consumer Code, ensuring customer concerns are heard and that disputes can be resolved through an independent adjudication system.”
Self imposed? The requirements are derived from the Consumer Protection from Unfair Trading Regulations 2008. Customer concerns regarding poor quality, defects and warranty issues are not covered by this Code which “does not appear to objectively to offer consumers a wholly satisfactory form of redress and is limited in its scope”+++

“The survey results and the Code, in addition to a ten-year warranty on all new homes, combine to give new build home purchasers genuine confidence in the product they are buying.”

A survey with results used by this industry to “rebuff unwarranted criticism” and for marketing, an ineffective Code “limited in its scope” and warranties that seeks to bat away claims.
Let’s face it; this in-house industry survey is easily manipulated. All housebuilders can see their customer’s responses in real time on the NHBC portal, enabling them to incentive buyers of their homes to answer positively to the crucial star rating question: “Would you recommend your housebuilder to a friend?”  Furthermore 11,803 survey responses were not used for the sample size of the key question.  I asked the HBF why and they said:
“The Star Rating part of it is just for HBF members. Hence adding up the sample sizes for the Star Rated builders will not get you to the total 57,972 responses as other non HBF members are sampled as we want to get as full a picture as possible. However, every single valid Barratt response counts towards Barratt’s rating; every single valid Bovis response counts towards their score etc. Valid simply means completed by an owner occupier within the 20 week response window. Not one single valid survey was ‘not used’”

The APPG EBE in the report “More Homes – Fewer Complaints” agreed with me that the survey should be conducted completely independently of the industry. “Recommendation 10: Housebuilders should make the annual customer satisfaction survey more independent to boost customer confidence.  We believe it would boost consumer confidence if the Customer Satisfaction Survey is seen to be more independent of the NHBC and the HBF – bringing in a high profile third party to conduct and take ownership of the research….”
The HBF reaction? To attempt to reaffirm via a IPOs MORI review of the survey that said it is “fit for purpose” nevertheless “changes are being implemented in the next survey year.”
It may well be fit for the industry’s purposes, but is not in my opinion, fit to demonstrate rising customer service, satisfaction or that higher quality new homes are being built. In fact it is and always has been, woefully inadequate. Nevertheless, such as it is, it does paint a grim picture of an uncaring industry, hell bent on ever increasing their profits, whatever the consequences for naïve, trusting new homebuyers that believe their spin and hype.

*       NHBC annual report to 31 March 2016
**     Figures supplied by NHBC
+++ APPG Inquiry Report “More Homes Fewer Complaints” July 2016

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter