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Response to Consultation Government Delay with New Homes Ombudsman

Response to consultation and government delay in creating the Statutory New Homes Ombudsman

Another consultation? On 1st October 2018, now ten months ago, the then Housing Secretary James Brokenshire announced the government would create a statutory new homes ombudsman which in his words:

 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.” 

It is hugely disappointing that this has yet to take place, meaning tens of thousands of new homebuyers have no available recourse to seek unequivocal, 100% independent redress and meaningful compensation awards for the often nightmare new homes they now own and the indifferent service received from errant housebuilders and inadequate warranty policies.  

As the one person that suggested the statutory new homes ombudsman at the APPG EBE Inquiry on 23rd November 2015, I had no idea at that time, it would take this government over 4 years to implement. Many thousands of new homebuyers are aware of the government’s failure to listen to their concerns, hear their pleas and start a long process of change, beginning with the creation of a statutory new homes ombudsman. The government should be aware that the lack of urgency and constant prevarication will lose votes, from homebuyers, their families and friends, whatever their political persuasion.

Will Robert Jenrick create the statutory new homes ombudsmanIt is my hope that following this somewhat unnecessary Consultation (closing on 22 August 2019), the statutory new homes ombudsman will become fully operational and not be further delayed by Brexit fallout, political grandstanding and become yet another one of those classic wishy-washy government promises that take a decade to materialise if at all.

When 99% of new homebuyers report defects to their housebuilder, 43% reporting more than 10 defects* within the first few weeks of moving in and many new homes not even built in full compliance with existing building regulations, clearly government must act.

It has come to my attention that the MHCLG has been giving advice to the Consumer Code for Home Builders (CCHB). The cynic in me is concerned that the CCHB could be being tasked by government, to come up with a watered-down set of rules and requirements agreeable to plc housebuilders and warranty providers, with a view to setting up an industry-led “Ombudsman” perhaps a temporary ‘beta’ version of the new homes ombudsman, ahead of legislation “at the earliest opportunity” “when parliamentary time allows” which will be operated on a voluntary membership basis. Could this even be the “Shadow form” the MHCLG has outlined?

The time for debates, announcements and consultations with stakeholders has passed. It is now time to deliver on the promise made on 1st October 2018 and create a statutory new homes ombudsman.

Too many new homebuyers are suffering, many are physically drained as a result of engagement with indifferent housebuilders when trying to get their new homes brought up to warranty standards and statutory regulations. For some buyers, the mental anguish has become almost unbearable, with some contacting me for help even mentioning thoughts of suicide, such is their hopelessness! Like Yvette Davis and her contaminated uninhabitable Linden new home in Sarisbury Green

New Home Expert’s Consultation responses:

Having completed the online version and answer all the specific questions I also sent in expanded comments some aspects. 

Q4      Who should be covered by the new homes ombudsman
To avoid housebuilders wriggling out of compliance with the statutory new homes ombudsman and depriving new homebuyers of effective redress, it should also encompass anyone who is involved in the selling of new homes or what are effectively new homes as ‘second-hand’. 

Q5      Should a New Homes Ombudsman only cover complaints where redress cannot be sought elsewhere?
NO! Clearly the New Homes Ombudsman should cover ALL complaints from new homebuyers regardless of the nature or existence of alternative Ombudsman or redress. The “limited in its scope” Consumer Code for Homebuilders has clearly failed new home buyers over its ten-year existence.
It should also include warranty providers as the Financial Ombudsman Services NHBC complaint decision in Appendix A demonstrates, this despite 71% of complaints against the NHBC being upheld in new homebuyers favour * originally shown here  now deleted because, according to Which, The NHBC is a “warranty supplier and not a home insurer” and the data was therefore “not correct.” 

Q6      Anyone else able to seek redress through the New Homes Ombudsman?
YES! Anyone who buys a new home from the original buyer within the 10-year warranty period.  

Q7      Should anything be excluded from the new homes ombudsman remit?
NO! It should include anything and everything including complaints about new home warranty providers.

FREE – FAIR – FOR EVERYTHING

Q8      Awareness of requirement to belong to the New Homes Ombudsman
The requirement should be a condition of planning and building regulation approval. Building control inspectors and warranty providers should be legally required to seek proof of membership before carrying out inspections.  

Q9      Should there only be a single New Homes Ombudsman
YES! It should be single Statutory New Homes Ombudsman administered by a PUBLIC BODY in a way not dissimilar to the Financial Ombudsman Services.

There should not be any form of “voluntary” New Homes Ombudsman, “shadow form” New Homes Ombudsman or any “Ombudsman” scheme or services, created by any of the housebuilding industry’s stakeholders. 

Q10b Additional circumstances a purchaser can access the New Homes Ombudsman

  • When a sale did not go through and housebuilder is withholding money, such as reservation fees and other payments such as for optional extras.
  • It should also cover breaches of written agreements regarding carrying out remedial works to defects.
  • When a purchaser of a new home is given a non-disclosure agreement to sign as a condition of carrying out remedial works to defects. 

Q12    Should the New Homes Ombudsman be delivered by a public sector body?
YES! Anything less, would be a sell-out to the housebuilding industry and a betrayal of trust to every new-build buyer. On no account whatsoever, should any private sector organisation, either existing or newly created, be allowed to deliver the New Homes Ombudsman. Already the industry’s own Consumer Code for Home Builders (CCHB) is attempting to manoeuvre and reinvent itself as an ‘Ombudsman’ with advice from the MHCLG! The New Homes Ombudsman must be unquestionably, 100% independent of the house building industry and its stakeholders (various Codes and warranty providers) and be clearly seen to be. The only way to ensure and guarantee independence is a New Homes Ombudsman service delivered by the PUBLIC SECTOR.

The MHCLG should take note of the abject failure of deregulation of Building Control function with the use of “approved inspectors” with the now many documented, poor quality standards and examples of non-compliance in “completed” “inspected” and “signed off” new homes. 

Q16    Should access to the New Homes Ombudsman be free for purchasers of new build homes?
YES! Any charge to access redress will deter consumers making complaints and questioning their validity. It has been previously announced by government that the New Homes Ombudsman would be free and on Page 41 of the 24 January 2019 response to the last Housing Redress Consultation it stated it would be free. Even on page 17 (3.19) of this consultation it states “we want to see better redress faster so that consumers can benefit from FREE, FAIR and EFFECTIVE redress as soon as possible”  

Until this year, the CCHB charged new homebuyers seeking redress £120 (including vat!) as a registration fee. Just 357 complaints were received in 8 years with many no doubt being put off by the fee and the bias of adjudication.  

It would be idiotic to have the opinion that a free service would be subject to misuse giving rise to vexatious complaints, as any new homebuyers that angry and frustrated, would in all probability have genuine, justified grounds for making a complaint.  

Q17    Funding the New Homes Ombudsman
A simple levy for each and every house built. I am suggesting £100 per home built giving around £20 million on 200,000 homes a year completed. In addition, for each complaint the housebuilder concerned should also pay £750 towards the cost of investigating the complaint and also any additional amounts to cover the cost any independent external specialist’s inspections, assessments and testing. 

Q20    Sanctions for New Homes Ombudsman
All of the above. In addition, when considering sanctions, expulsion or suspension, this should apply to all companies and regional companies within a plc housebuilder’s group. It should also apply to the directors of those companies. This is to prevent any plc corporation simply using another company within its Group, acquiring another housebuilder or setting up a new company to carry on trading and avoid the Ombudsman sanctions. 

Q21    Powers of the New Homes Ombudsman
It is essential that the New Homes Ombudsman has the power to force housebuilders to buy back (‘reverse the purchase’) defective new homes at full market value. This should be offered to the buyers of any new home where defects are serious or extensive enough to require the new home owners to move into temporary accommodation for more than 28 days.  

In addition, the New Homes Ombudsman should have the powers to stop work on any development where serious defects are reported, such as weak mix mortar, missing fire barriers and structural issues. In all such serious instances, the New Homes Ombudsman should INFORM all other home owners on any particular development, that their home may have a serious defect(s). This will nullify the use of non-disclosure agreements by both plc housebuilders and warranty providers to cover up their shortcomings and limit their financial liabilities. 

The purpose of a New Homes Ombudsman is to make meaningful, justifiable levels of compensation awards to new homeowners, taking into full account the impact on their family life. It should not just exist to enforce the rectification of defects and ensure any financial loss is reimbursed. This should ensure that housebuilders are suitably encouraged to improve quality and service. Each case should be judged fairly on its merits, in most cases compensation awards of less than £2,000 will be insufficient, as it will be cheaper for plc housebuilders to write-off the Ombudsman’s award for the few buyers that take their complaint to the New Homes Ombudsman against the cost of improving quality for every new home built.  

Q22    Maximum award by New Homes Ombudsman
This should be up to £200,000, in line with the Financial Ombudsman Service upper limit. A home is the most expensive purchase anyone makes in their lifetime; indeed, it can take a lifetime to pay off the loan. The upper limit must therefore properly reflect the investment, thus the likely cost of a total demolish and rebuild, to properly cover those new homebuyers who do not wish to take advantage of the buy-back option. 

Statutory New Homes OmbudsmanBy implying that taking legal action is an option for larger claims would dismiss its impossibility for most new homebuyers. For even those with legal expenses insurance, this is a lengthy and costly process with no guarantee of a successful and just outcome. Indeed, housebuilders have deep pockets and vigorously defend every attempt by the very few new homebuyers who take this course of action, in the full and certain knowledge that it will cost less to defend the small number of claims that could potentially end up in court, than routinely pay justifiable compensation to homebuyers. Even if an agreement is reached ahead of a court hearing, this is normally subject to a non-disclosure agreement clause, (“gagging order”) to avoid any precedent being established and to reduce likelihood of action being taken by others, often with identical issues.  

Taking legal action against a plc housebuilder is a serious barrier to access to justice, in terms of cost, risk and time. As I said on national television, “Buyers who go to court will run out of money long before the housebuilders ever will.” Most having just bought a new home at a premium price, perhaps using help to buy, cannot simply afford long and protracted legal battles with plc housebuilders and their bullying ‘Rottweiler’ litigation mitigation solicitors.

Q23    What information should be published to empower consumers?
There should be a builder league table, revised bi-annually naming house builders and the number of complaints made against them to the New Homes Ombudsman. It should detail the number of complaints upheld, amount of awards and compensation, with statistics divided into categories such as pre purchase, defects and poor quality, non-conformance with building regulations and unfair terms and charges. 

In time, this incorruptible government data, should replace the industry’s own, in-house and highly criticised ‘8-week HBF survey’ designed with the sole intention of “providing data to rebut negativity” and completed by purchasers at a time when the full extent of defects and their housebuilder’s indifference are unknown. Indeed the NHBC have said that the responses to its 9-month survey, which is never made public, show the satisfaction levels are normally 5-10% lower than those in the 8-week survey. 

Q26    Should a New Homes Ombudsman remit be UK-wide
Whilst there is a case for this, given most plc housebuilders have operations in the devolved nations and clearly have the same need, it will inevitably result in further legislative delay. For this reason the Statutory New Homes Ombudsman should apply only to England with devolved nations free to copy or amend their own legislation if they choose to do so. 

The nations were devolved for a reason and have autonomy to change and revise their own building regulations, so why, if they feel a statutory New Homes Ombudsman is required, would they not be able to act and create their own? A requirement for a UK-wide New Homes Ombudsman would only serve to delay implementation. 

Q28    What should be included in a Code of Practice for developers?
Obviously everything listed in the consultation should be included, but any industry collaborated/created Code of Practice will invariably be used to limit or restrict the redress available to new homebuyers and the effectiveness and powers of the New Homes Ombudsman (as is the case with the industry’s own CCHB). This must not be allowed. 

The New Homes Ombudsman must not be confined to decisions from any Code requirement not met. Each and every complaint should be judged in its own individual merits. Whilst the FOS does make reference to the ‘Banking Code’ and the ABI ‘Statement of general Insurance Practice’ it does not appear bound to them implicitly. Neither should the Statutory New Homes Ombudsman be restricted in what it can and cannot rule on. 

FREE – FAIR – FOR EVERYTHING 

It must be said, that the universal practice of housebuilders encouraging, incentivising and in some cases insisting, new homebuyers to use a particular solicitor of the housebuilder’s choice must be banned. Clearly this practice leaves buyers at a distinct disadvantage as there is a clear conflict of interest. This being demonstrated by the harm thousands have suffered as a result of being led into leasehold ownership of houses, without fully understanding the implications and disadvantages of doing so. Housebuilders recommending/suggesting solicitors (because “it will be quicker/easier as they know the development and have already done the searches”) should and must be banned. Until it is, this should be included under the New Homes Ombudsman remit. 

3          Conclusion
The housebuilders and warranty providers operational policy is to bat away buyers’ complaints and warranty claims rather than work in the consumer’s best interests. Despite many years of opportunity, nothing has changed. It is now time, as the previous Consultation recognised, a Statutory New Homes Ombudsman is required to award justifiable and meaningful levels of compensation. It needs creating now, as a government priority, without further and unnecessary delay.

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The Chameleon Consumer Code for Home Builders now plan their own “Ombudsman”

New Homes Ombudsman – Who is running the show?

The zombie Consumer Code for Home Builders just doesn’t realise it’s dead yet.
The Consumer Code for Homebuilders is dead - it just doesn't know yet.Just what is going on?  Who is running the show? Is the housebuilding industry’s tail wagging the government dog?

I have my suspicions that the housebuilding industry is using its party political donations as means of leverage to interfere and delay the creation of the statutory new homes ombudsman and other government policies that could adversely affect their highly profitable business model.

The latest from the Consumer Code for Home Builders (CCHB)  “Spring 2019 Status Report” , (note the CCHB haven’t managed to produce an Annual Report since 2017!) appears to indicate that a government department is advising the housebuilding industry:
“ following advice from [James Brokenshire’s] MHCLG”, they are “working on a number of initiatives“!

The Consumer Code for Home Builders (CCHB) said on Twitter (8 July 2019):
“We’ve been working on a number of initiatives to strengthen the Code following advice from MHCLG and the All Party Parliamentary Group (APPG) on Housing. [sic]”

APPG EBE Inqiury Report July 2016But why only now?  The APPG EBE Inquiry Report was first published as long ago as July 2016!  Let me guess; it’s because the creation of a statutory new homes ombudsman will mean the end of this industry-led, zombie Code which was found by the APPG EBE Inquiry to be “limited in its scope – does not appear to give homebuyers the safeguards we think they should expect and – it does not appear to us objectively to offer consumers a wholly satisfactory form of redress”  This is a Code that has been failing new homebuyers for 10 years, even charging them a fee of £120 (until last month when it was scrapped) to seek redress!

James Brokenshire - busy doing nothingSo why is James Brokenshire and his department bending over backwards to give this corrupt, scandal-ridden industry every opportunity to shape and limit the effectiveness of a new homes ombudsman? An ombudsman that was supposed to be “championing homebuyer’s interests” and “holding developers to account”? But it appears the zombie CCHB has every intention to hold the Ombudsman to account, no doubt to limit financial awards and judgements in favour of new homebuyers and protect the interests of the industry it exists to serve and safeguard.

“The referral of complaints to a new homes Ombudsman: The new Board will commission an Ombudsman by open competition. This will replace the current Independent Dispute Resolution Scheme. Commissioning the Ombudsman in this way will allow the Board to seek best value, ensure operational standards are maintained and give confidence to consumers that the Ombudsman will be held to account”

Is this what James Brokenshire and his MHCLG mean by a “shadow form” “voluntary” new homes ombudsman?  Is this the reason for the shameful suggestion in the Consultation for the New Homes Ombudsman could be delivered by a private sector body? Is government short-changing new homebuyer redress?

This latest missive by a dying Code is full of potential mechanisms for delay, if government allows it. It contains the words “consultation with stakeholders” four times. Thus far, nine months on from Brokenshire’s historic announcement, nothing has been done. In the meantime the CCHB has been publishing nonsense like this as it struggles for its very existence. As The APPG EBE Inquiry report in July 2016 concluded:
A “completely independent [new homes ombudsman] would replace the dispute resolution service offered as part of the Consumer Code for Home Builders.”
The Consumer Code for Home Builders days are numbered
So far, nothing at all has changed since July 2016. Only the government MHCLG is keeping this failing and ineffective form redress alive on life support. It’s time the power was cut and it was put out of new homebuyers’ misery. How much longer will it remain on death row, appealing for clemency?

Recommendation 1: DCLG should initiate steps to set up a New Homes Ombudsman
“The role would include mediating disputes between consumers and their builders or warranty providers to offer a quick resolution procedure paid for by a housebuilders’ levy. We see this is as the key recommendation to provide more effective consumer redress, if things go wrong, and a good way of applying pressure on housebuilders and warranty providers to deliver a better quality service. Our view is that the new service should be funded by a levy on the sector, but it would need to be completely independent and replace the dispute resolution service offered as part of the Consumer Code for Home Builders. Our recommendation picks up on one made by the Office of Fair Trading, in its 2008 market study into the house building industry, which suggested that, if the industry failed to make satisfactory progress, it would recommend further intervention in the form of a statutory redress mechanism for new homebuyers funded by a levy on the industry.

The CCHB response to the Scotland New build buyer protection bill

The Consumer Code for Home Builders is keen to “improve customer protection” UK-wide rather than in isolation. They say they are “working toward” “looking at ways to improve” their Code but have done little in the ten years of its existence to offer better redress for new homebuyers. Indeed revisions to the Code have made it more difficult for buyers to seek justice.  It then tries to promote itself over eleven pages which include its opinionated dismissal of the statutory new homes ombudsman.

The Code is apparently “currently working on its response” to the current MHCLG Consultation on the new homes ombudsman. I think we can conclude what will be in it!

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Is the Government Consultation to delay a Statutory New Homes Ombudsman?

New Homes Ombudsman Consultation

Not another consultation! As the person that first suggested a statutory new homes ombudsman be set up as long ago as 15 November 2015 at the APPG EBE Inquiry, I was delighted, after my many years of campaigning, that at the Conservative party conference on 1st October 2018 some nine months ago, Time for Mr Brokenpromises to deliver the New Homes OmbudsmanHousing Secretary James Brokenshire announced the government would create a statutory new homes ombudsman which in his words:
“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. “

So what has happened since then?
It took the government 284 days after the “Strengthening Redress in the Housing Market” consultation  closed (16 April 2018) before finally publishing the results and its response on 24 January 2019. The 1,209 (355 new homeowners) that responded showed a clear, unequivocal and virtually universal desire that new homebuyers should have access to an ombudsman (91%), with 84% replying it should be statutory.

A year on, we are still awaiting the House Building Federation (HBF) publication of its formal report on the APPG’s New Homes Ombudsman Inquiry findings published on 26 June 2018.  The HBF have also set up a working group to “…simplify the legal process and create a clearer and simpler process for signing off new homes as complete”. They have also commissioned an independent report on consumer redress for new home buyers. But just when are the HBF publishing these? And government isn’t exactly showing any sense of urgency either!

Last week on 27 June 2019, the government published yet another Consultation “Redress for Purchasers of New Build Homes and the New Homes Ombudsman.”  Seeking “views on the detail of the proposed legislation and how a New Homes Ombudsman can be delivered and will run until August 22.”
New homebuyers can respond to the consultation here

But it appears house builders have until 2021 to get their act together and belong to the new homes ombudsman or they will be excluded from Help To Buy. This was previously “announced” so not new and not exactly showing any degree of urgency. “The purpose of the consultation is to gather evidence and seek views on improving redress for purchasers of new build homes. Any policy changes brought forward as a result of the consultation would be subject to appropriate assessment.” Just how long would that take?

No doubt this will end up in can-kicking the eventual legislation, not just further down the road, but into the long grass beyond the next general election. If it takes another 284 days for government to respond to its latest consultation, publication may be as far away as June 2020! So much for “access to redress is a priority for this government”

At least the members of the Committee for Public Accounts in their report “Planning and the Broken Housing Market”  have put a time limit on when the government should say what it is going to do regarding poor quality news homes and compensation for new homebuyers!

“By October 2019, the Department should set out how it will work with local authorities, developers, and other agencies on how they will prevent, penalise and compensate for poor residential build quality.”

But the MHCLG statement in this paper says it all! “21.  In terms of new builds, the Department acknowledged that it did not have a specific programme to address concerns about the quality of new builds……” 

We find the same old rhetoric from the “ministry of cut & paste” [MHCLG]: “we will” – “we Intend” – “when parliamentary time allows” But when will these work-shy wasters actually get on with setting up the badly-needed statutory new homes ombudsman?

In stark contrast, there is considerable momentum in Scotland where MSP Graham Simpson has submitted a private members Bill “Proposed New-Build Homes (Buyer Protection) (Scotland) Bill” Not one Westminster MP has bothered to do this despite many receiving hundreds of letters from their constituents about their defective new homes and indifferent housebuilders.

Perhaps this is the reason that the consultation asks in Q26 whether the new homes ombudsman’s remit should be UK-wide. Whilst this is desirable given that most the large plc house builders also operate and commit the same scandals in Wales and Scotland, “engaging and consulting with devolved administrations to seek agreement on UK-wide legislation” will inevitably lead to even further delay and ministerial procrastination.

Does this Government fully appreciate the urgent need for a new homes ombudsman?

Government has been to an extent, hoodwinked by the industry and its spin-doctoring Home Builders Federation (HBF), into making statements such as:

“The Government knows that on occasion things may go wrong.” On occasion? Around 99% of new homebuyers report defects to their housebuilder within a few weeks of moving in;  42% reporting more than 10 defects. Most experience difficulty in getting their plc housebuilder to come back and deal with these!

“The Government believes that the majority of developers act responsibly when building new homes.”
“The majority of new home purchasers are satisfied with their new homes.” Believes? From the propaganda of the HBF and its highly suspect customer satisfaction survey, which exists purely “to provide data to rebut negativity” which is sent to new homebuyers just 8-weeks after they move.
Wake up at the back and smell the coffee!
Government should stop thinking most new homebuyers are satsifiedThe consultation states: “In March 2004, Dame Kate Barker DBE’s review of Housing Supply made a number of recommendations for the house-building industry to improve service quality and customer satisfaction ratings”
But nothing changed!

“In 2008, the OFT’s review into ‘Home Building in the UK’ identified problems for consumers when buying a new home, such as delays in moving in, faults in new homes and potentially unfair terms in contracts. If the industry failed to deliver a solution to these issues…….the review recommended that a statutory redress mechanism should be implemented with the ability to award homebuyers compensation”

Since then, 11 years later, the house building industry and our government has failed to deliver a solution!

Voluntary Code of Practice for new homes

No! “Voluntary” doesn’t work in the housebuilding industry. The failed “limited in its scope” Consumer Code for Home Builders (CCHB) being a prime example. CCHB Graphic

Legislation and regulation is what is required yet this government intends to “..work with industry and consumer groups to establish a voluntary code of practice for new homes ahead of legislation” Thus far I have not been contacted to take part, despite the thousands of new home buyers that have over the last 10 years, contacted me for help and advice. Q28 suggests what the Code of Practice might contain, but any finite Code of Practice means the powers of the new homes ombudsman, will be restricted and limited. Apparently “Good progress has been made towards a unified code of practice” says government.

Warranty schemes excluded from the new homes ombudsman

The Financial Ombudsman Service upholds an average of one in three complaints in favour of the consumer. The NHBC has the highest percentage of complaints found in the customer’s favour at 71%. This shows that clearly the NHBC are not dealing with warranty claims and customer complaints fairly and as it claims “Protecting Homeowners” . However, many disputes with the warranty companies are of a highly technical nature and would be better addressed by the new homes ombudsman.

It is also planned that the scope of new homes ombudsman will be limited to the “first two years, when the majority of problems occur.” But this means latent defects, often of a very serious structural nature such as weak mortar, would be excluded.

Different consultation – same questions!

Struggling to fill 51 pages with needless questions, this latest consultation is asking some of exactly the same questions as the previous redress consultation (question in brackets).

  • Q10a  Time frame – How long before buyers can use NHO (Q14)]
  • Q20   Sanctions (Q16)
  • Q22   Amount of award (Q16)
  • Q23   Complaints awards data published (Q13)
Do we want the new homes ombudsman delivered by the private sector?

The consultation has added a sneaky move where the government is trying to devolve who administers the new homes ombudsman to the private sector. Respondents have an opportunity to indicate it should delivered by a public sector body in Q12. Especially given the abject failure of building regulation compliance since private sector companies were able to carry out the building control function as approved inspectors. It is also not inconceivable that the house building industry could create a company, specifically to tender for the role of new homes ombudsman.

Q16 Should access to a new homes ombudsman be free for new homebuyers? Strange as it is stated earlier in the consultation notes (page 17) that the government expressed its desire and intention “that consumers can benefit from free and fair and effective redress as soon as possible”

Q17 How should new homes ombudsman  funded – By far the most fair and effective way to fund the new homes ombudsman is by a levy for each new home each housebuilder sells. This can (and perhaps should) be collected at the planning stage. Alternatively, it could be collected on legal completion. I have suggested £100 per home completed meaning the larger plc housebuilder pay more than SME housebuilders building 20 homes a year. In addition each housebuilder should be required to pay £500 towards the cost of investigating each complaint made, this should encourage housebuilders to settle small disputes with their customers.

Q21 New homes ombudsman – additional powers
Yes! in the most serious complaints the new homes ombudsman should be able to require the housebuilder to re purchase the home at a fair (non-defective) market rate, adding an extra award to compensate and cover the costs of moving home, stamp duty, carpets, legal fees removals etc.

“Shadow form” new homes ombudsman!

Quite frankly, I hope James Brokenshire is watching this programme and seeing the anguish of these poor people, who don’t deserve to be treated like this by plc companies.”On 11 April 2019, I was asked by Victoria Derbyshire what is the latest on the New Homes Ombudsman?  All I could say at the time was that James Brokenshire had announced it would possibly be in shadow form until parliamentary time allows for legislation for the statutory new homes ombudsman. At that time as now, are no further details of what shadow form means or when it would be operational. On 27 June 2019 Brokenshire said: “we are also exploring the options to appoint a New Homes Ombudsman in shadow form – someone to work closely with industry, consumer groups and government to ensure improvements and standards are delivered quickly and help shape the future scheme”

It would seem the ‘shadow form’ could even be an industry-led, voluntary new homes ombudsman, shackled to a new Code of Practice drawn up by the industry itself and limiting its scope and overall effectiveness!

What exacxtly is a shadow form new homes ombudsman?As James Brokenshire said in his “ministerial foreward“There can be no excuses for half measures when it comes to quality, safety or standards” It is a pity he does not appear to do as he says. Since his announcement, we have had half measures from him and his MHCLG such as the ‘shadow form’ new homes ombudsman! “We are committed to taking bold action to reform the sector and will be pressing ahead as soon as parliamentary time allows” You cannot claim to be “committed” but only when “parliamentary times allows” a phrase used as an excuse for delay over the last 9 months. In the meantime new home buyers like Yvette Davis are being driven to the brink of suicide from the stress and despair they are suffering at the hands of this indifferent, failing industry. New homebuyers deserve better than a plastic ‘shadow form’ new homes ombudsman in name only.

At the Chartered Institute of Housing (CIH) conference on 27 June 2019 in Manchester, Brokenshire said: “I’m mindful these aren’t quick wins. These are decisions taken today to help tomorrow.” He also acknowledged the government was currently undergoing change, even foreseeing his own demise as housing secretary: “There may even be a new housing secretary. But our approach to housing won’t change. We’ll continue to approach all of this in a serious way.”

In May 2019, Brokenshire told The Sunday Times that he is frustrated by the slow pace of change. “There is a real pressure on legislative slots going through parliament right now — something that prolongs the two years it usually takes for new laws to take effect. “You sort of think, Oh, for goodness sake!”

Yes you do, but an MP’s private members bill to outlaw upskirting on 6 March 2018 gained Royal Assent and became law on 12 April 2019,  shows can be done!

It’s time James Brokenshire stepped up, or stepped down, so someone more capable could start doing, rather than announcing, re announcing, dilly-dally-delaying and making silly videos showing his ‘support’ for minority groups. Unfortunately, “Mr Brokenpromises” time and that of his government’s is fast running out. As Boris says “Get it Done”

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Weak Mortar In Taylor Wimpey New Homes

The great weak mix mortar scandal – Part Three

My first article highlighted the weak mortar scandal and the reasons why the industry has now widely adopted factory manufactured ‘just add water’ mortar, along with technical reasons which might explain why incidence of weak mortar in new homes is increasing. My second article I followed up on “Britain’s crumbling new homes” on the BBC2 Victoria Derbyshire programme on 6 December 2018.

So in this part three article, I will expand on last week’s BBC Victoria Derbyshire story featuring 130 homes built using an incorrect M2.5 weak mix mortar on the Taylor Wimpey ‘Kingsmeadow’ development at Kittlegairy in Peebles and the seven homeowners’ 2-year battle with Taylor Wimpey. Weak Mortar Taylor Wimpey development Peebles

In 2008, Taylor Wimpey started building houses in Kittlegairy, Peebles,  approved by Scottish Borders Council with designation (iii) prescribed mix mortar specified. That is mortar with a cement content of 14% – 17% and deemed equivalent to an M4 factory produced design mix mortar. Unbeknown and undeclared to Scottish Borders Council, Taylor Wimpey, for reasons as yet unknown, used a Tarmac silo M2.5 design mix which had a cement content 6% less than that approved and under HALF the cement content required (M6 or 1:3-4) to meet the NHBC warranty standard for areas of severe exposure, in which this development is located.

Tarmac Silo Design Mix Mortar

Sheila ChalmersPeebles homeowner Sheila Chalmers first contacted me for advice in October 2017 and featured on the programme. She told me: “In 2008, the Tarmac Mortar Specification Sheet (as supplied by Taylor Wimpey) stated that their M2.5 mix was the equivalent strength of (iii). This has changed since (I do not know when) with Tarmac’s current literature saying that their M4 is now the equivalent of (iii).” Tarmac also state on their website: The mix proportions of Tarmac dry silo mortar conform to values specified in the following table when tested by the methods prescribed in BS EN 1015 and BS 4551.

Tarmac recently confirmed to me that their PDF data sheet (April 2007)  sent to homeowners by Taylor Wimpey is genuine. Perhaps Taylor Wimpey used this data sheet when considering which design mix was required to match the specified designation (iii) equivalent mortar?
Taylor Wimpey attempts at concealing the issue

Sheila told me that around 2011/12 and unknown to the rest of the estate at that time, a house had started to show signs accredited to weak mortar, this being raised with Taylor Wimpey, the NHBC and the Scottish Borders Council. It was discovered that an undeclared change from prescribed mix mortar to design mix mortar had taken place. Sheila said “It was all kept very quiet with Scottish Borders choosing to not alert home owners that their houses may start to fail over the coming years.” Peebles site plan showing extent of homes Taylor Wimpey built using incorrect M2.5 mortarIn the years that followed, houses started to empty, with people literally disappearing overnight – Taylor Wimpey were buying back houses. Sheila indicated that “probably around 10 or 12 houses but it was still being kept hushed up. People were signing gagging orders and therefore kept quiet. Taylor Wimpey’s solution at the beginning of this, was to buy back the homes and silence the homeowners with non-disclosure agreements” Apparently some of the homeowners recently confirmed that Tradecast the repointing contractor, had been put under “severe pressure” by Taylor Wimpey and were instructed not to acknowledge any issues when challenged by homeowners. “In the early days, Taylor Wimpey were wanting Tradecast to park off-site and take taxis onto the estate in order to keep the problem quiet”

On 28 September 2016, four years after the mortar started to crumble on the first home,  Taylor Wimpey wrote to home owners admitting “some of the homes” did not meet the requirements of the NHBC. It outlined a 20-year extension warranty cover for mortar on every home on the development. Apparently then, if any homeowner was concerned, Taylor Wimpey would inspect with their engineer. Shelia told me that “as would be expected most did, with the majority being informed that there was nothing wrong with their houses, this despite owners now “scratch testing” their own mortar and seeing it crumbling away.” More owners began having their own mortar tests done with a wide variety of results, from between designation (i) 30% cement, to below (iv) less than 10% cement

Sheila said that Scottish Borders Council were coming under increasing heavy pressure from concerned homeowners and, after several families provided their structural results to the Council, it was forced to arrange its own structural assessment which carried out by Harley Haddow, on a random selection of houses within the development on 17 May 2018 . The Harley Haddon report had similar findings as the owners’ structural reports and giving a 10-year timeframe “the mortar will weather, will subsequently weaken and will undoubtedly result in failure” for the properties built with M2.5 mortar.

Harley Haddow’s report, shared with Taylor Wimpey, ultimately resulted in Taylor Wimpey letter on 19 September 2018 to all houses built with M2.5 mortar. It advised homeowners, despite Taylor Wimpey’s original rejection of repair works in many cases, that it has now finally agreed to carry out repointing works if the homeowner requested. The company still maintains that “only some houses in phase one have a durability issue and a significant number of houses where no issues have been identified.”
Weak mortar at Taylor Wimpey development in PeeblesSo despite Taylor Wimpey stating in their 2016 letter “we are fully committed to carrying out the works that are needed for the remaining affected homes as soon as possible” nevertheless, over three years later, homebuyers like Sheila have had a long battle with Taylor Wimpey to arrive at such an undertaking. Sheila says that “we felt that at that time if there was a problem, Taylor Wimpey would step up and rectify the problem no questions asked.”  The repointing Taylor Wimpey has finally agreed to “falls way short of what we should all be getting, ie, knock down and rebuild of our properties.”

“…the repointing of joints on walls where purposeful demolition and reconstruction should have happened”
Jo Churchill MP for Bury St Edmonds House of Commons debate (13 Dec 2017)

Even in statements for the BBC Victoria Derbyshire programme last week, Taylor Wimpey maintain that raking out and repointing with M6 mortar, which they have now finally agreed to carry out for Sheila during this summer, is still considered by them not to be necessary for Sheila’s home. This despite independent laboratory analysis of the mortar her home was built revealing as low as 8% cement content. It is interesting to note that Taylor Wimpey used Alastair Dick from David R Murray Consulting Engineers the same consultants that produced some of the engineering plans who have been involved in the project all along, can hardly be considered independent. When Sheila spoke to Mr Dick a couple of weeks ago, he told her “he was now relieved that Taylor Wimpey had agreed to repoint all the houses.” Sheila said, “you’ve knocked mine back several times” he told her “… there was a lot of pressure on them before the agreement was put in place.”
Independent mortar test resultsHowever, Taylor Wimpey told the BBC that the tests Sheila and her neighbours used were “not appropriate.” It said “The weaker mortar used on some of the houses is of sufficient strength to meet structural requirements… but it may present as less durable under prevailing exposure conditions”   “May”?

The good news is the internal mortar with 13% cement content just under the lower end of the 14% for M4 mix so could possibly be structurally sound. However the cement content of the remainder of the external walls falls below even M2.5. Of particular concern is the mortar used below ground which should have been a 1:3 mix as it is often saturated and subject to the actions of freeze thaw, even more likely in this area.

The 25mm deep raking out of mortar joints and repointing works will only improve durability and does not address the issue of the potentially weakened bond with the wall ties, reducing the stability and integrity of the cavity wall, which could in certain conditions, result in external walls becoming unstable and dangerous on exposed elevations. However, it is interesting to note that wall tie pull out tests, arranged by Taylor Wimpey and witnessed by Harley Haddow, found a pull out of 1KN or more, greater than the anticipated tension loads of 0.6KN and “the tensile capacity had not been demonstrably compromised by the bedding mortar’s friability. “

It is unimaginable, the extreme anxiety, worry and mental anguish that at times, must have been almost unbearable and detrimental to health, suffered by Sheila and her neighbours. This coupled with the expensive legal fees (around £350 an hour), structural survey fees and the cost of mortar testing which basically forced Sheila’s household into debts totalling £16,000, all caused by Taylor Wimpeys’ intransigence and the NHBC’s ongoing denial of what I believe, is a wholly valid warranty claim, over the last 24 months. Sheila told me “this could have all been avoided if Taylor Wimpey had admitted it instead of trying to bat this away and lie through their teeth. They knew all along when they built this bodged Estate but were quite happy to lie to us and say all is well, forcing us to spend huge sums (I am not the only one) to prove it. Legally, they don’t even have to reimburse our fees despite us proving all this.” Although Taylor Wimpey has told the BBC they will now do so.

Pete and Jill Hall have "garage built with sand"Sheila’s neighbours three doors away, Pete and Jill Hall also had a 2-year fight on their hands with Taylor Wimpey. They too had independent testing of their weak mortar, which in the worst case showed their garage had such a small cement content it could be considered to be built with virtually wet sand! After a heated meeting with Taylor Wimpey’s solicitors, Dentons UKMEA LLP, during which the Halls outlined the only options they would accept either: 1) Buy back the house, 2) Demolish it entirely and re build as it should have been or 3) Carry out works required to bring it to the standard it should be; much to their astonishment they received a letter from Taylor Wimpey’s solicitor. It said they were considering reporting the Halls under “Proceeds of crime legislation” with allegations of “clear and specific threats linked to demands of money and offering to conceal information if such money was paid and other demands met” Not quite as Taylor Wimpey claim “we always aim to do the right thing for our customers?” Now two years on, Taylor Wimpey has made an offer to the Halls. Jill told the BBC “It falls short of where we think a proper full repair should be but they [Taylor Wimpey] have basically turned round and said it’s that or nothing….I would never buy a new house again”

Notwithstanding the site-wide weak mortar, apparently this development also had other “workmanship” issues. As noted in Harley Haddow’s report: they “found examples of what we consider poor overall site quality control, over and above that of the mortar.” This including: poor restraint strapping details, homes with garden rooms where foundations are misaligned, missing wind posts in some house types and external DPCs below ground level. Shelia says “and the list goes on with regards to boilers and heating systems supplied.”

What about the NHBC? “Protecting homeowners”?

Shelia asked the NHBC reinspect her house and yet again it rejected her warranty claim saying that despite obvious gaps and holes in mortar joints there is no evidence of physical damage. At that time Sheila tells me the NHBC were made aware that M2.5 mortar had been used and not the M6 required for severe exposure areas and required in the NHBC warranty standards, but still “they would not budge”. Even the NHBC’s own inspector report concluded that the mortar class used throughout this development “indicates it may not be suitable to provide adequate durability”
NHBC Inspector's weak mortar report Peebles

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

The final response from the NHBC:

Sheila’s home is now outside the 10-year warranty (by 5 months) and as far as the NHBC are concerned “that’s end of the matter”. The NHBC said:

“I should advise you that this is unlikely to change our view on liability. Section 3 of the Buildmark policy provides cover for actual physical damage to the home that was caused by a defect in a part of the property listed in the policy document if the cost of repair is more than the minimum claim value. Regardless of whether, or not it is identified that there is a defect with regard to the specification and/or preparation of the mortar mix this item is not covered by the policy in the absence of actual physical damage to the home.

The construction is now 10 years old and during this time the mortar can be considered to have generally performed, given that there is little sign of erosion to date to indicate any failure within the compressive strength of bedding material used and/or impair the structural integrity of the load bearing walls. As such, the criteria that is required for a valid claim under the terms of the policy has not been met.”

This, despite three separate independent Structural Engineers reports concluding: in the longer term (beyond 10 years) the mortar will weather, will subsequently weaken and will undoubtedly result in failure.”
Are NHBC worried about the high costs of remedial works?
So much for the NHBC:
“Preventing problems before they happen and being on hand when they do” Their own technical materials requirement R3 in the warranty standards states: “All materials products and building systems shall be suitable for their intended purpose”  That is having a life of at least 60 years.”

In my opinion, the NHBC are behaving abysmally regarding the issue of weak mix mortar. It is a serious issue which the NHBC have been aware of for many years. As far as I am aware there is no research being carried out to discover why it is on the increase. The NHBC has not revised its standards to prohibit the use cement substitutes such as GGBS and PFA or to require regular ongoing site testing of mortar used.

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.”

In addition, the NHBC’s Technical Extra Issue 11 in September 2013  (Page 22) specifically warns against using M2.5 design mix factory mortars.
NHBC have known about issues with M2.5 mortar for yearsThe NHBC spent a total of £94.6million on remedial works on warranty claims in the 12 months to 31 March 2018, around 11,000 claims a year. Around £28 million for claims made during the first two years. Superstructures (walls including render/floors/roof) accounted for around 38% of the total cost of claims in 2015/16. The NHBC has reserves of £462million and additional investment assets totalling £1,560million. This non-profit distributing organisation, can well afford to do right by those new homeowners with weak mix mortar policyholders.
Repointing works to 130 Taylor Wimpey new homes at PeeblesTaylor Wimpey is currently repointing 130 homes in the M2.5 area of the development, but not those built using M4 mortar. Taylor Wimpey said they “sincerely apologise to the homeowners affected… we are fully committed to resolving matters” They claim “this is a localised issue and falls short of the high standards we uphold. We are committed to carrying out the works that are needed to the remaining homes as soon as possible” However, Taylor Wimpey’s latest letter advises that it considers it is not under any obligation to undertake this work and it is committed to complete all repointing work within three years! Sources on site, tell me their contractor Tradecast is aiming to complete repointing works on 90 houses by the end of this year and surprisingly, some homeowners being unwilling to have the work done at all.

Sheila has raised a formal complaint against the NHBC through their complaints team.

The NHBC’s 86-year old ‘go-to’ “mortar expert” Barry Haseltine stated in his report:

“I recall that, up to 2012, Tarmac were concerned that achieving a strength of 4N/mm2 would require them to use more cement than they would have done in a prescribed mortar of the equivalent designation, (iii). I suspect that the designation (iii), M4, was used throughout; however from what I can see of the mortar quality in photographs taken by the Claims Investigator, there is nothing that I can call damage within the NHBC definition of the word. The house is structurally sound and should remain so for a normal life. There is no need for any remedial work.” 

Barry Haseltine basing the statements in his report from NHBC photographs and never visited Sheila’s home and inspected it himself.

The NHBC would appear to base their rejection of the M2.5 mortar when M6 is required purely on the basis it hasn’t (as yet) structurally failed in the last 10 years!

Taylor Wimpey Annual Report 2018 (27 February 2019)

This specifically makes reference to Sheila’s development although again, plays down just how potentially serious and expensive it could be for its shareholders.

“We acknowledge concerns raised by some of our customers in connection to mortar durability on a development in Peebles, Scotland. While a significant number of houses on the development are unaffected, a robust technical solution, supported by an appointed structural engineer and the NHBC, to fix the durability of the mortar has been identified and homes are being remediated as soon as possible”

This despite the company knowing about the weak mortar issue in 2011 and all homes built using a mortar not considered sufficiently durable for the severe exposure location of this development!

It would appear that Taylor Wimpey also have structural failings on their 2013 development ‘The Chariots’ in Andover.  As I understand it, the roofs to 75 homes are being removed, work which will take 2 months per house to complete.Taylor Wimpey extensive remedials at The Chariots Andover

Taylor Wimpey 30-year weak mortar warranty

In their letter dated 28 September 2016, Taylor Wimpey undertook to provide a total of 30-year warranty up to 31 December 2045, for “issues specifically caused by mortar quality” for EVERY home on their ‘Kingsmeadow’ development in Peebles. This does not include what it refers to as “fair wear and tear” but “defective mortar which has failed to maintain its strength and durability” It would appear the mortar warranty is only for the external mortar which can be seen. Amazingly, Taylor Wimpey also said  it “takes such concerns seriously and stand by the quality of our construction.”

No integrity. Taylor Wimpey CEO Pete Redfern should apologise to Peebels homeowners in person.Obviously in 2045 everyone will have departed this mortal coil and CEO Pete Redfern will no doubt be keeping ex-Persimmon CEO Jeff Fairburn company, stoking the fires of hell. It will be interesting to see whether the correct mortar (M6) is used on the adjacent development land. I very much doubt any works will begin until long after the current repointing works are finished.

For those wishing to take legal action against their housebuilder, the case of Halvorson v Persimmon Homes 2018 (Scotland) is case law which determined that all NHBC warranty standards form part of the contract and non-compliance of any guidance or recommendations could be judged as a breach of contract.

A sea-change of behaviour is required

It is time the tin-eared, corporate bean counters running the nation’s plc housebuilders did the right thing right away and stopped trying to minimise what are huge issues like weak mortar. First with denial, then the great cover up, using non-disclosure agreements limit their exposure. Finally, as on this Peebles development, when a weak mortar issue became widely known, threatening, intimidating and mentally torturing its own customers for two years before finally agreeing to undertake repointing works to all 130 houses. This has got to stop!

This whole industry lacks moral integrity. It says one thing, then does the opposite,  frequently exposed lying and cheating its own customers, concealing the extent of defective homes and quietly carrying on with apparent impunity from this weak government. James Brokenshire promised a new homes ombudsman but has yet to deliverIt is to be hoped that the current Housing Secretary James Brokenshire is good on his word and legislates for the statutory new homes ombudsman which in his words: “will champion home buyers, protect their interests and hold developers to account.” as a matter of urgency, a government priority, rather than as current, “when parliamentary time allows.” Make time!

Until government acts, new homeowners like Sheila and her neighbours will be left wondering,  in the words of the Pet Shop Boys,
“How I’m gonna get through  ……….what have I, what have I, what have I done to deserve this.”

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Persimmon Homes Announce Independent Review

Persimmon Homes announces an “independent review of workmanship, culture and customer care”

Following on from Persimmons announcement last month of its 1.5% homebuyer retention scheme, made in response to growing criticism about the quality of its homes, Britain’s worst housebuilder – rated only 3 stars by its own customers five years in a row, is now launching an independent review of its customer care, culture and workmanship as part of an attempt to move on from the executive pay scandal and complaints about its defective homes.The wide-ranging, independent review will be led by Stephanie Barwise QC of Atkin Chambers,  and will look into Persimmons customer care approach, systems and culture, quality assurance processes, and the speed and consistency of its response to issues. The company intends to publish the findings towards the end of 2019. It seems strange that Persimmon has chosen to employ a QC to conduct its independent review. However with her “expertise lies in civil engineering and construction disputes” and “considerable experience in alternative dispute resolution methods including adjudication and mediation.” perhaps not.Independent review of Persimmon homesSince the introduction of Help to Buy in 2013, Persimmons share price has more than doubled. Persimmon relies heavily on the scheme with almost half of its buyers having used Help to Buy last year.

In a company statement Persimmon said:

“Persimmon has been focused on rapid change and improvement of its customer care culture and operations, and on eliminating cases of poor workmanship. To assess the effectiveness of the new measures and processes and to determine whether they appropriately position the business for the future, Persimmon’s board … has commissioned an independent review.”

This Persimmon “independent review of its culture, workmanship and customer care” looks to me little more than a plastic, public relations stunt designed to obtain some credibility with third parties and a government that has already indicated it is mindful to suspend Persimmons access to Help to Buy. Even the death of a 4-year old child caused by a defect in a Persimmon home didn’t force change, but as soon as James Brokenshire threatens to take away access to the Help to Buy gravy train, Persimmon make two press release announcements in as many weeks!

Persimmons culture is one of unparalleled boardroom greed. Driven by a hunger for increasing profits year on year, whatever the cost, with total indifference to its reputation, build quality and its customers.

Year after year Persimmon has said in their annual reports:

In 2016, Jeff Fairburn said:

“The Group’s priority is to serve our customers well by providing good quality new homes and great service. During 2015 we invested substantial resources in new customer focused initiatives to improve our customers’ buying experience and our NHBC/HBF 3 star rating.”

In 2017, it was repeated:

“During 2016 we have continued to invest additional resources in new customer focused initiatives to improve our customers’ buying experience and our NHBC/HBF 3 star rating.

In 2018:

“Delivering good quality new homes with a high standard of customer service is a priority for the Group. Although we have increased our build numbers significantly in recent years, our quality control procedures and increased use of standard house types have helped to maintain our build quality.”

This year Persimmon said:

“Delivering a good quality product for our customers and providing high levels of customer service throughout the home buying process is a top priority for the business.” and more recently: “we hear the message that we need to continue to raise our game in customer care.”

Do Persimmon Homes really need an in-depth, independent review of the way it has been operating to find out where it could, if it chose to do so, improve? It is inconceivable that those on the board haven’t known for many years what they are doing, building very poor quality defective new homes and what they are most definitely not doing, putting their customer first. Why do Persimmon routinely refuse to allow buyers’ professional snagging inspectors access before legal completion?  “Company policy” they tell their customers”

Persimmon could ask their employees. Here is what a Contracts manager no less said about the company!

Ask the thousands of unhappy customers


And Persimmon need an independent review?
They could ask their buyers 13,476 members on the Facebook Group Persimmon Unhappy Customers’  There are many stories like this online, going back many years. Persimmon even made a counter claim against one of their buyers for the cost of repairs to his home! Persimmon appear to go out of their way to be confrontational and intransigent to any customers who take issue with the builder. The phrase “the Customer is always right” isn’t even on their radar if this story from the North East Evening Chronicle is anything to go by. Persimmon   failed to fix defects for nine months in this house.

Why don’t they also publish their 9-month NHBC customer survey results for the last 5 years?  Plenty in there to show those head burying, bean-counters on the board that are now, apparently, so keen to discover where it all is going wrong!

So do you really need a root and branch “independent review” of your business practices at Persimmon. It’s obvious what is wrong when you do things like this?

“They chop down trees, build shoddy homes and go to the lavatory. On Wednesdays they sell dodgy leaseholds and have buttered scones for tea!”

Cutting down around 260 trees and more than 80 metres of hedgerow from the eastern boundary of their Millennium Farm development is hardly going to improve Persimmons public image. North East Lincolnshire Council believe Persimmon have “breached planning regulations”, and has launched an investigation to discover whether they have been working outside their agreed terms.

Persimmon built homes with missing cavity fire barriers. In Cornwall  In Devon with their development in Cranbrook was the first development site identified. In fact this could be a widespread systemic omission/defect. Perhaps Persimmon owe it to their customers to be conducting an independent review into why and how hundreds, maybe thousands, of their new homes can be built with a potentially fatal defect.

When it is discovered by buyers they first deny it then say it is limited to one site. Eventually forced to check many developments as the issue becomes known to BBC Watchdog.   The difference between Persimmons financial performance and customer satisfaction is so stark, this, surely, is an area where the government should take an interest. James BrokenshireYet the most we have heard are comments from James Brokenshire, the housing secretary, that he will be “considering carefully” how developers that are part of an updated Help to Buy scheme from 2021 should “meet the standards and quality that customers expect and deserve”. We’ve heard it all before James – nothing has changed! Be careful, as voters will remember you as ‘James Brokenpromises’

Persimmons latest headline grabbing homebuyer retention scheme is strangled by restriction and limited only to the defects buyers spot the day they get their keys. How daft do Persimmon think we all are?

These smokescreen PR gestures will not change Persimmon. In fact, I firmly believe that once the company has fooled government and secured approval to continue with the next extension of Help to Buy, the homebuyer retention scheme will be quietly ended and the independent review report will be ignored, gathering dust on a boardroom shelf. If Persimmon did really want to change, it needs to do much more and even then, it will take a generation to repair its terrible reputation as Britain’s worst housebuilder.

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HBF Satisfaction Survey shows number of buyers reporting defects as high as ever

HBF New Home Customer Satisfaction Survey Results 2019

So the latest 2019 new home customer satisfaction survey results have finally been published by the Home Builders Federation (HBF) – six months after the survey year ended on 30 September 2018. All HBF housebuilder members having known their current star rating and individual survey scores as they come in throughout the year via the NHBC portal.  Taylor Wimpey and Bovis even crowed about their “achievement” in their annual reports last month. Persimmon has (again) pledged to improve its five year run of 3 star ratings, by announcing its 1.5% homebuyer retention last week.

But do the general public take note of the housebuilder star ratings?

Persimmon Homes 3 star rated 5 years running!Apparently not. On the face of it 16,449 still bought a Persimmon new home in 2018 despite its continuously poor star rating, with just 8,234 of these returning the survey! Amazingly, 7,404 buyers bought their new home from Bovis despite the builder being rated an industry low of just 2 stars in both 2016 and 2017.

So why is this survey so important for the industry?

For a start it is the ONLY survey of new home buyers “satisfaction”. Even if this is an in-house survey, controlled by the industry with carefully crafted questions and sent to new homebuyers just 8-weeks after moving in, it is all there is. The HBF and its PR machine goes into overdrive, making crass overstatements with headlines such asHomeowner satisfaction with new build homes increasing” 
more people happy with their new homes than ever” “new homes are built to a higher standard than ever before”  when the reality is, this is a small increase over two years, from an all time low in 2017 (84%) and way below the all time peak of 91% in 2013 – results from the year before Help to Buy was launched!

“The improvement in satisfaction levels have been achieved as output has continued to increase.”
That is according to the HBF, who were apparently oblivious to the weak mortar issue in Britain’s crumbling new homes! HBF Steve Turner grilled on national TV about weak mortar The HBF have stated that the primary purpose of this 8-week satisfaction survey is to “provide data to rebut negativity” What other industry at the outset, designs a survey so it can rebut negativity? Surely the sole purpose of any customer survey should be to indicate unknown areas of weakness so these can be demonstrably positively addressed. Not the HBF survey, where the HBF crows: “two thirds of those polled said the number of defects was in line with their expectations” Satisfcation? New homebuyers expect defects!Actually it was 43%, with another 34% indicating more “problems” than they expected. Again, in what other industry do consumers buy a product in the full and certain knowledge and expectation that it will be faulty?

The latest government figures show “output”, despite the twice extended, government subsidy for the industry, Help to Buy and the HBF’s spun  “78% increase in housing supply in the last 5 years”, is still below the peak of March 2007 12 years ago! Actual government figures for the last survey year to 30 September 2018 (2017/18) show private sale completions at 126,970 (116,350) with a total homes completed of 155,250 (142,870) (previous year in brackets)

HBF satisfaction survey - 99% of new homes have defectsOne survey response the HBF never care to highlight, one that cannot be easily influenced, is the indisputable fact that virtually all new homes have defects, with 99% of buyers surveyed reporting defects to their builder within a few weeks of moving in, and an increase this year to 42% reporting more than 10 defects! The HBF spins it “new homes are complex bespoke products and the number of problems (snags, usually minor such as paint drips, cupboard doors out of line etc) was in line with buyer’s [low] expectations” and “58% having less than 11 issues with their new home” Cigars all round, break out the champagne!

Well not quite. The Government has announced it is proposing to get tough on housebuilders that fail to deliver good quality and service. James Brokenshire - talk but no actionBut whether James Brokenshire who spoke at the HBF Annual Conference and would do well to distance himself from this broken industry, is daft enough to use the industry’s star rating as his yardstick remains to be seen! Government need to take a much tougher stance against the industry wolves dressed in Granny’s nighties (covering up everything) and avoid being taken in like Little Red Riding Hood, by their meaningless pledges, promises and plastic PR spin.

New cars are also “complex bespoke products”, some models have around 1,000 different customer options yet they are routinely, delivered to the customer defect-free having been inspected many times, both during and after manufacture. Those collecting the keys of a new car would be horrified to discover “misaligned doors and paint drips” defects which the HBF attempts to state as “usually minor” but nevertheless, are not inspected, checked or eliminated, being left for the customer to discover by the profit-driven industry the HBF serves and promotes.

So its congratulations to Russell Armer Homes awarded a 5-star rating, this from only 20 of their customer’s survey responses! No doubt contributing to:  “This year’s further improvement is a clear demonstration that the intense focus within the industry on build quality..” so spins the HBF. It is interesting to note the percentage “sample size” of buyers returning the survey/answering Q1 for the main plc housebuilder has fallen dramatically this year to an average of around 44% of total homes built. The stated ‘sample size’ for each housebuilder totals 48,001, this despite 60,955 surveys being returned. Perhaps many of those dissatisfied buyers, badgered and threatened by housebuidler’s to complete the survey form favourably, believed they would hurt the housebuilder more by not doing so, rather than completing to survey to reflect their discontent.
Some new homebuyers do not even get the survey. SM said on the Unhappy New Homebuyers Facebook Group
“I never got a questionnaire for a survey. Wonder how they were selected. I did have great fun completing my 2nd NHBC survey about Persimmon though!” “Intense focus on build quality” HBF?
For those that do get notification codes from the NHBC, the survey can be completed online here But many new homeowners find out after they move in that broadband is painfully slow or in some cases, non-existent.

In 2016 I asked the HBF why the total number of surveys “sampled” for the Star Rating was less than the number of surveys returned?  This year it was 78% of the total. It would seem that more and more surveys are being sampled out! Why there is a need to sample at all? Surely all the surveys responses can be counted?
The HBF responded:

“The industry scores are based on every single valid response NHBC (who operate the survey) get to what is an industry-wide survey. Valid simply means completed by an owner occupier within the 20 week response window. Not one single valid survey was ‘not used’. So all the industry scores shown in the charts on the website in the results we released are based on every single (45,342) valid response we got this year.  Whilst the ‘industry survey’ covers more than HBF members, 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 45,342 responses as other non-HBF members are sampled as we want to get as full a picture as possible.”

In 2011, I asked the HBF why it did 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.”

No surprise there! The industry also keep the results of the NHBC 9-month survey under wraps too, no doubt for similar reasons. The NHBC told the an APPG Inquiry in 2015: “The NHBC 9-month customer satisfaction survey scores generally 5-10% LOWER than the HBF 8-week survey”   Taylor Wimpey - 3 star rated in reality?This year Taylor Wimpey indicated that its overall satisfaction star rating score at nine months was 76% – 3 star territory, 2 stars and 15% below their official 5-star rating.

The survey, and in particular the all important housebuilder star rating question, can be manipulated by housebuilders.  Often buyers tell me they were told their faults would not be fixed if they answered “No” to question 1 – “Would you recommend a friend?”

In the halcyon years of “customer satisfaction” 90% in 2012 and 91% in 2013 with the number of surveys returned were 23,778 and 29,330 respectively. The financial crisis was in 2008 and housebuilders reduced their production between 2009 and 2012. This was ramped up in 2013 when the taxpayer-funded Help to Buy gravy train was launched and plc housebuilders had pound signs in their eyes.

HBF chief Stewart Baseley who by his own admission is apparently  “a great believer in transparency” says:

“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.”
“The survey proves conclusively that the people who buy and live in new build homes are overwhelmingly happy with their purchase. There has been a huge focus on quality and service across the industry and this is reflected by successive annual improvements across all question areas.
“The intense focus on quality and service, allied to a huge recruitment and training campaign has enabled builders to further raise standards whilst increasing output. New build buyers already have far more protection than second hand buyers with the security of a consumer code and ten year warranty.
“The vast majority of customers are already happy with the service and quality of their home, but the industry is determined to deliver even higher levels in the years to come. The industry is committed to further increases in protection and redress and is working with a range of stakeholders on how an ombudsman can be introduced.”

Quite how the likes of Mr Baseley sleep at night after saying those statements I don’t know! His HBF even have the nerve to use the creation of the statutory new homes ombudsman, (that I campaigned 5 years for) as a marketing tool “further enhance build quality and consumer protections for new home buyers.”  Build quality is at best poor and those buying a new home have no “consumer protections” at all as many thousands have discovered to their cost! This is precisely Why a statutory new homes ombudsman is being set up! The HBF must not be allowed any opportunity to weaken the new homes ombudsman powers and effectiveness.

The HBF has recently announced it is teaming up with charities to provide support and highlight mental health amongst construction workers, with 400 taking their own lives last year. A construction worker is now 10 times more likely to die through suicide than a fall from height! Many mental health issues originate from bullying and the unrealistic production demands by site managers, contracts managers and regional construction and managing directors, who in turn face similar from the main board directors in their pursuit of every increasing completion numbers and record profits for their dividend hungry shareholders. Those affected will no doubt be delighted by the Building Mental Health Framework and the £100,000 the whole housebuilding industry has donated to the charity and the 24/7 helpline! But the irony is, a great many new homebuyers suffer mental illness too, becoming drained as a result of engagement with indifferent housebuilders which for some, the mental anguish is unbearable as they try to cope with the daily frustration and dealing with plc housebuilders and their broken promises.

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Persimmon Launches Homebuyer Retention Policy

Persimmon announce 1.5% homebuyer retention policy

Persimmon homes - giving greed a bad nameIn a blaze of positive publicity, under headlines such as Persimmon homebuyers can withhold money until faults fixed (well not exactly); the housebuilder everyone loves to hate, has launched what is claimed will be a ground breaking initiative and a first for the industry, in response to overwhelming criticism about the quality of its homes, the obscene corporate greed-fest of executive bonuses and its part in the leasehold scandal,  Persimmon homebuyer retention “allowing buyers to withhold an average of £3.600 per home until all faults are fixed”

Nils Pratley in The Guardian suggests the homebuyer retetention could have been called the ‘Jeff Fairburn memorial clause’ – an eye-catching gesture designed to combat Persimmon’s reputation for corporate greed, as embodied by Fairburn’s infamous £75m bonus.”

A few weeks ago Nils said, in another well-written article: “It’s nice that the housebuilder wants to address its substandard scores for customer service, but shouldn’t this thought have occurred when the executives, Jenkinson included, were racking up their millions?” 

Not forgetting, this is a company that has also now admitted it lobbied government in 2015 to abandon the zero carbon policy for new homes.

In the Financial Times, Persimmon’s recently-appointed CEO Dave Jenkinson said:

“Persimmon is listening hard to all of its stakeholders and we hear the message that we need to continue to raise our game in customer care.

CEO Dave Jenkinson announces Persimmon homebuyer retention

“The initiatives we have already announced, including the action taken in the new year to deliver greater accuracy of anticipated moving in dates by adopting a more targeted approach to the phasing of sales on specific sites and the improvements and investments that we have made in our customer care team, operations and technology over the last few months are beginning to take effect.

“We are now accelerating the pace of change through the introduction of a contracted retention, which will give homebuyers far greater satisfaction at the completion of the purchase.  

“Moving into a new home should be a positive experience enhanced by all the benefits of a new build that is designed for modern living.  We are determined that the experience is not overshadowed by teething problems and providing a homebuyer’s retention is an important step towards achieving this.

Chairman Roger Devlin, said:
“This is a first among the UK’s large housebuilders and I hope will lead the way in change across the sector. This move, and the urgency with which we will introduce it, is a clear and unambiguous signal of cultural and operational change at Persimmon putting customer care at the very centre of the business.”

Other “improvements” include offering maintenance appointments at weekends and out-of-hours opening of customer care departments.

In the big announcement, Persimmon said it “would implement the homebuyer’s retention, by writing into its standard sale contract that 1.5% of the property value (£3,600 on average) could be withheld by the buyer’s solicitor until any faults identified at the point of key release are resolved
Update: During the time it took Channel 4 Dispatches to make ‘Britain’s New Build Scandal’ June-July 2019, featuring Persimmon, the time limit  buyers had to report faults was extended to 7 days.

The homebuyer retention policy, announced in haste, won’t be fully in place until the end of June 2019 – so much for its claim “we are now accelerating the pace of change”! But why wait until June? It’s hardly Brexit! Well, the end of June is Persimmon financial half-year, so homes could be rushed to get them included for the half-year. In addition, Persimmon will need to start building better, much better and all homes completed after the end of June, will not yet be started.

But quite frankly, this could easily be implemented at the beginning of April, fittingly perhaps on April Fool’s day as in my opinion, buyers and the government would be fools if they believe this small sticking plaster on a disgraceful housebuilder that gives greed a bad name, will make any noticeable positive difference for buyers.

Unlike the Barratt 5-year warranty, which despite its exclusions, was a corporate statement of quality: “our product is so good we are so confident we can afford to give our buyers a longer warranty”  The Persimmon homebuyer retention announcement shouts: “our product is so bad, we have decided to allow our customers to withhold part of their payment until we have sorted out defects”

This scheme is also  unlikely to cost Persimmon anything, with any costs being borne by the sub-contract companies it employs.  Retentions are deducted on all sub-contractor payments. Half is usually returned 6 months after the buyer moves in, with the balance normally after two years. The percentage retention is negotiated at the time the contract is drawn up, often used by housebuilders as a bargaining tool to force their sub-contractors to discount their rates or accept payment terms “monthly valuation on account.” Most sub-contractors tend to view any returned retention as a bonus, as it is priced into their rates.

Persimmon homebuyer retention – so what is not to like?
This is not as it first appears. For a start, this only applies to “faults” (I prefer the term defects) that excited and distracted buyers note and report at the time they are first given the keys. Why not make it for ALL DEFECTS notified to Persimmon in the first 6 or 9 months? It should not be limited to just those small, quickly dealt with, cosmetic “faults” which may, or more likely, may not be spotted by buyers on the day they first get the keys to their new home.  This will certainly not be of any help to buyers that later discover they have weak mortar, cracking render, issues with their floors or serious fire safety issues like this 

If Persimmon really are “determined that the experience is not overshadowed by teething problems” why does the company routinely refuse to allow their buyers and/or their professional snagging inspectors access to their homes to check the property before legal completion?

Persimmon "Teething" problem?The homebuyer retention monies are also to be held by the buyer’s solicitor. In most cases this is highly likely to be one that Persimmon has suggested, recommended, or in some cases, even bribed or required the buyer to use. A recent government inquiry found conveyancing solicitors are too close the house builder. There is a clear conflict of interest. The report says: “buyers’ interests ‘cannot be served where they are coerced into using developer-recommended conveyancing solicitors, who rely on repeat business from developers and may not be inclined to put their client’s interest first.”
This is also against the Law – The Consumer Protection from Unfair Trading Regulations 2008, In addition, it also breaches requirement 2.5 of the “limited in its scope” Consumer Code for Homebuilders and SRA rules on conflicts of interest. Yet this has been going on for years! Furthermore, as Patrick Hosking notes in The Times, “there’s a danger the scheme will descend into countless legal disputes, with buyers’ solicitors quickly swallowing up that cash buffer in fees” indeed, as sure as night follows day.

Sebastian O’Kelly, 58, chief executive of the Leasehold Knowledge Partnership, told The Times: “Persimmon has an open-ended liability on the snagging issues. If they build something appalling, and so many of our plc housebuilders build houses and flats with major defects, then they have a responsibility to fix them. I don’t think consumers would be able to take much comfort from this.”

So why are Persimmon doing this?
The homebuyer retention initiative comes following statements that the company is to improve customer satisfaction levels after being dogged by complaints about poor build quality. There had been murmurings lately about a buyer’s retention. Paula Higgins from the Home Owners Alliance told The Times last month that her idea of buyer’s being able to hold a 2.5% retention for 6 months “would be a powerful incentive for builders to put problems right”   I told The Times it would be an “administrative nightmare” and that “6 months would be too short.” Unbelievably, I even found myself agreeing, for the first time, with Steve Turner of the Home Builders Federation , when he said that “introducing retentions as the rest of the construction sector is scrapping them is a crude and naïve suggestion that could reduce consumer protection and risks creating a long drawn out legal process – the new homes ombudsman is a better way to help buyers.”  Trade bodies call to scrap retention Retention in construction under review

Pressure from Government – withdrawal of Help to Buy
In February, The Guardian reported that Persimmon’s right to use Help to Buy was under the scrutiny of Housing Secretary James Brokenshire, who was considering stripping Persimmon of its right to sell properties using Help To Buy because of poor satisfaction levels and concerns on the housebuilder’s behaviour. Persimmon has benefitted immensely from the Help to Buy scheme. Nearly half its 16,449 home sales last year were made through the taxpayer-funded scheme.

A source close to the minister said:
“Leasehold, build quality, their leadership seemingly not getting they’re accountable to their customers, are all points that have been raised by the Secretary of State privately,”

Help to Buy, should never have been extended and should now be cancelled on economic grounds but, if the government wants to keep the housebuilders’ gravy train running, originally due to end in 2016 yet twice extended, first until March 2021 and more recently to March 2023, Government should at least attach a few requirements and conditions that specifically benefit new homebuyers.

Persimmon needs evidence to shoe that they are changing their behaviour under the threat of parliamentary time being found to debate this, perhaps even a select committee inquiry. The homebuyer retention scheme, weekend appointments and the changes to customer care availability hours are little more than tokenism to keep government at bay. It looks like a cheap PR job which has given the company some much needed, positive, coverage in the quality national press.

Persimmon’s premium rating by the NHBC and LABC/PREMIER GUARANTEE may have increased dramatically. The homebuyer retention scheme may be being used to reduce their warranty premiums like an insurance voluntary excess.

An attempt to improve Persimmon’s dire HBF 8-week survey 3 star rating
Persimmon rated 3 star for 5 years in a row!Persimmon Homes have been rated just 3 stars for the fifth year in a row. Jenkinson even mentions the “contracted retention, which will, give homebuyers far greater satisfaction at the completion of the purchase” –  in other words early on, just as the 8-week, HBF survey arrives in their post or inbox. Is it really an “unambiguous signal of cultural and operational change at Persimmon, putting customer care at the very centre of the business.” or a calculated measure to improve their HBF 8-week survey scores and 3-star rating? Given Persimmon claims 79% “satisfaction” which is just 1% below the 4 star rating, you would think giving a few £250 John Lewis vouchers to buyers would have been a cheaper option!

A spokesman for the Home Builders Federation told The Times: housebuilders had “delivered consistent improvements in customer satisfaction over the past two years” and he was again not keen on Persimmon’s housebuyer retention saying it “should not be seen as an option for housebuilders generally.”

No doubt with Persimmon now learning how to “play the star rating game” the heavy weighting of their current 3-star rating drag on the overall satisfaction scores over the last 5 years, the overall satisfaction score at least, is certain to improve, even if in reality, the actual new homebuyer satisfaction does not.

This industry’s reinterpretation of defect into snag has been one of the great distortions of the narrative surrounding new homes in recent years. The likes of Persimmon will be more than happy to agree a 1.5% retention – which they are likely never to have any intention of recovering, is cheap when compared to the loss of access to Help To Buy and other possible government sanctions such as a land-banking tax.

A clear indication that Persimmon has got this wrong is their statement:
“we hear the message that we need to continue to raise our game in customer care.” When actually it is the quality of construction and inspection regimes where improvements are required. It is not a case of putting out the fires quicker, but of fire prevention, getting it right first time, or at least before buyers get their keys!

As with Barratt in the eighties, it will take a generation to turn around Persimmon’s reputation, forever historically tarnished by corporate greed, poor quality homes and contempt and indifference to its own customers. Britain’s top site managers won’t want to go there and have their CVs forever tarnished. Those that do, will justifiably demand huge salaries for their sacrifice. In directing attention to the newly moved in and including quality and customer care in site managers’ bonus calculations is a step in the right direction that should improve their HBF survey star rating. It is a recipe that Barratt have adopted with success over nine, 5-star rated years. It is amazing it has taken Persimmon so long to either begin to care about it, or cotton on!

Persimmon Annual Report 2018 27 Feb 2019
Range of new customer service initiatives implemented in late 2018 showing encouraging initial results. The Group is confident these measures will improve its customer satisfaction score once they have had time to take effect”

CEO Dave Jenkinson “A wide range of projects to improve customer satisfaction commenced in late 2018 and the initial results have been encouraging, giving us confidence in our ability to make progress in this important area”

Chairman Roger Devlin: “Alongside that we are changing our pay and incentives to include greater emphasis on both quality and customer care with plans that are more rigorous than we have had in the past.

“Delivering a good quality product for our customers and providing high levels of customer service throughout the home buying process is a top priority for the business. For the year to 30 September 2018, the percentage of our customers who would recommend Persimmon to a friend under the independent Home Builders Federation (HBF) survey was 79%, in line with the prior year and just short of the four star threshold of 80%. The Group has continued to invest in its customer care systems and resources during the year and this will continue to be the case in 2019 as we remain determined to improve customer satisfaction levels.”

But talk is cheap! Persimmon have said it all before!

Persimmon Annual Report 2016 27 Feb 2017
“During 2016 we have continued to invest additional resources in new customer focused initiatives to improve our customers’ buying experience and our NHBC/HBF 3 star rating. This is yielding further improvement in performance with the majority of the Group’s operating businesses showing progress. Prior to customers moving into their new home we have improved our communication processes with them to provide greater understanding of the progress we are making in constructing their new home. We have strengthened our build management processes to facilitate delivery to expected timeframes. Additional support is being provided through reinvigorated processes to demonstrate the features of the new home to customers, assistance with identifying any small remaining issues on moving in day and providing improved systems and processes for our customer care teams to support the prompt rectification of any outstanding matters. Customer care performance is reflected in relevant employees’ remuneration to support a closer alignment to the Group’s objectives. Whilst these initiatives are delivering tangible improvements in our customer satisfaction ratings we remain determined to deliver further advancement this year.“

Persimmon  Annual report 2015 on 22 February 2016.
CEO Jeff Fairburn stated:
“The Group’s priority is to serve our customers well by providing good quality new homes and great service. All of our team are[sic] responsible for delivering high levels of customer satisfaction….Our sales teams across the business are trained to provide excellent levels of service to our customers.”

“During 2015 we invested substantial resources in new customer focused initiatives to improve our customers’ buying experience and our NHBC/HBF 3 star rating. We have introduced dedicated customer liaison managers on our larger sites, improved communication processes with our customers, introduced new processes to strengthen our build programmes and provided additional resources in our customer care teams. These initiatives are showing some early signs of improvement in our customer satisfaction ratings and we will continue to pursue this agenda to secure further progress this year.”

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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.

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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.”

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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!

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