Stewart Baseley, Executive Chairman of HBF interview on BBC Radio 4 Today – Saturday 11 February
True to form the Home Builder’s Federation [HBF] the industry’s PR and lobby group, conducts a perfect whitewash on the facts as their executive chairman Stewart Baseley trots out a well-used, well-rehearsed HBF rhetoric. The two main points the industry is keen to focus on at the moment:
“promoting awareness of increases in output and rebut negative claims on build quality” are well covered. Mission accomplished! Move along there is nothing to see. Money well-spent? The HBF was funded mostly by its house builder members to the tune of £3,037,449 in the year to 31 December 2015.
Questions to Stewart Baseley, Executive Chairman of HBF
Do you accept there is a problem?
“No I don’t accept there is a problem although clearly there are in some cases that you have highlighted some of those on your report and I totally accept that anybody that’s in a situation where they have got a problem, it’s very serious for them.”
“No problem – some cases”
Fact: As Stewart Baseley knows, the NHBC paid out £90million in warranty claims for remedial works to fix serious defects in 11,000 new homes (an average of £8,181 each) in the 12 months to 31 March 2016. That equates nearly 9% of the 124,720 new homes built in the same period. In the previous year, the NHBC spent £86million on remedial works including £23million on foundations and £32million on superstructures to 11,000 new homes.
But the main housebuilders, satisfaction ratings have gone down
“They have gone down, well as an industry of course you have to put that into context the fact that first of all we went through the most tremendous recession seven or eight years ago and we lost getting on for half our workforce. As Oliver Colvile quite rightly says, capacity is a challenge and we have increased output over the last three years, by in excess of 50% and we are taking on and training tens of thousands of people to do that; in that context, we actually conduct what I believe is the biggest opinion poll audience research that is undertaken in the UK every year, I am not aware of anything bigger. We sent out 85,000 questionnaires in the last survey year to customers of new homes of all the builders that have been mentioned, we get about a 56% response rate we have about 45,000 returns, which is pretty impressive in terms of the sample size compared to most surveys, and around 85% of the customers of all those homes would recommend their builder to a friend. Clearly there are 15% who wouldn’t and there are a variety of reasons for that and I don’t want to suggest in any way that those reasons are not important and vital to the people that have got those challenges.”
“We have increased output by 50% in the last three years.”
Fact: In the year to 30 Sept 2013, 108,270 new homes were completed. The latest official government figures to 30 September 2016 show 141,690 new homes completed a rise of 31%! Furthermore the number of new homes being built is still 23% lower than the peak in the year to 30 March 2007. Surely Stewart Baseley is aware of the official statistics?
New Home Customer Satisfaction Survey
Yes satisfaction scores, in even this industry’s own manipulated survey (with some buyers being given £250 John Lewis vouchers for favourable responses!) have indeed gone down to 85%. It was good that Stewart Baseley acknowledged this. But of a total of 135,860 homes built in the last HBF survey year, 80,582 surveys were sent out by the NHBC and just 56%, 45,342 were returned representing just 54% of the homes sold privately. Furthermore, not all survey responses are ‘validated’. Surveys returned late (not within 7 weeks of the date of the letter) are not counted as are those that are “not filled in correctly.” I would suggest if the responses of these surveys were favourable to the industry, they are used in the results!
The HBF state in their Annual Report:
“The Customer Satisfaction Survey and star rating scheme has played a key part in measuring industry performance and providing data to rebut negativity. To ensure the survey is seen to be as robust as possible, HBF and NHBC will be launching a review of the scheme.”
In other words, people like me can see through the hype and are (along with the APPG Inquiry) calling for a survey that is completely independent of the industry.
Well Stewart Baseley has certainly used the “data” to try and “rebut negativity”. By way of comparison, the John Lewis’ customer satisfaction survey score in 2016 was 84.9% and Amazon were top with 86.6%, both are streets ahead of anything the housebuilding industry does!
It is true the industry “lost” a large proportion of the workforce, not forgetting this was something companies within the industry chose to do at the time!
The level of dissatisfaction of those buying new homes is at its highest level since 2009 according to your national new homes survey, are you saying that survey is wrong?
“No I am saying that’s our survey, we are talking about a drop from 90% to 85% all companies and I know the CEOs and I know the managing directors of all the companies that were mentioned in the report, plus many other companies across the country and I am absolutely convinced of one thing and that is they all get up in the morning and go to work and all their people go to work with the intention of delivering a good product to a high service across the country.“
”they all get up in the morning and go to work with the intention of delivering a good product to a high service across the country”
Fact: You only have to look at Taylor Wimpey’s Loddon Park development recent press coverage especially concerning Bovis, to know this just cannot be true, otherwise surely action would have been taken long ago to address the issues.
“Now clearly things go wrong on building sites, we are working in all weathers with all sorts of raw materials that have to be imported and clearly there are challenges and I think most customers accept that actually is not necessarily possible to always produce a perfect house. The key thing is to make sure we deliver their house on time and where they do have issues and when they do have problems making sure we address.”
“not necessarily possible to always produce a perfect house”
Fact: The housebuilding industry that Stewart Baseley is attempting to defend, cannot even produce a home that is 100% finished by the date builders say it will be. There can be no excuses for handing over a defective, poor quality and often unfinished new home. Whilst it is true a new home is exposed to ‘all weathers’, but so are new hospitals, schools office blocks etc all built to much higher standards handed over 100% compete, on time, with very few (if any) defects. It is not impossible to build a perfect new home. All that is required is care, desire and sufficient time. The industry has lowered expectations, so buyers expect to have defects and faults. You do not expect to have faults in a new car. You don’t drive it for a week and then take it back to the dealer with a list of things that need sorting out!
But that doesn’t always happen people have to go through complaints procedures etc
“Well I accept that and Oliver Colvile talks about an ombudsman and we already have procedures in place. If you have a warranty like the NHBC or Premier or LABC there is a disputes resolution service, we set up a Consumer Code for Home Builder back in 2010 that also has a disputes resolution service for areas that are not covered by the warranty provider, and I’m a great believer in transparency and I’m a great believer in people having access to services that are cheap for them to use to get quick remedies to their problems.”
“We already have procedures in place”
Fact: Dispute resolution by warranty providers, that are funded by housebuilders, to adjudicate on disputes with those very housebuilders about their reluctance to fullfil their obligations under the warranty policy!
“The NHBC Dispute Resolution Service can help with help to settle disputes over defects which relate to the NHBC standards. The NHBC standards require builders to fulfil all of their obligations under the Buildmark policy.”
The fact is house builders don’t and the NHBC has to mediate in disputes, which they find in favour of homebuyers in around 70% of disputes.
The Warranty dispute resolution cannot help with non-warranty matters, such as disputes over boundaries, planning, contractual or financial matters or if arbitration or legal proceedings against the builder have started.
“we set up a Consumer Code for Home Builder back in 2010 that also has a disputes resolution service for areas that are not covered by the warranty provider”
Fact: Unsurprisingly the HBF “sits on the Code advisory forum to ensure house builder’s interests are represented….to ensure that any changes are workable for the industry”
The new revised Consumer Code for Home Builders comes into effect 1 April 2017. I believe the revisions to the Code are further to the detriment of the homebuyer. They have been made following decisions in cases of claims made by new homebuyers. These include the abolition of the ability to claim £250 for inconvenience, the removal of the requirement to give a copy of the Code to anyone that asks and non-provision the “home builder guidance” – so much for transparency Mr Baseley! Furthermore, in the case summaries since the Code was introduced in April 2010, there have been a total of 193 cases to June 2016. Out of these, 56% that succeeded or succeeded ‘in part’ resulted in total awards of just £221,869, just 19% of the total claimed £1,150,755.
Stewart Baseley says: “I’m a great believer in transparency”
Fact: The Customer Satisfaction Survey and builder star rating for example has no access to NHBC survey portal so buyers can see survey responses and builder scores in real time, [as house builders can] just the industry adjusted results in March. The HBF should publish all builder scores not just the Q1 star rating score. Why do they not publish the NHBC 6-month survey results? The NHBC could publish details on how many claims for each builder and how many disputes for each builder go through the resolution process.
The NHBC should publish details on the number of warranty claims for each builder and how many disputes for each builder go through their resolution process. The Consumer Code for Home Builders should not be confidential. The CCHB should publish the names of housebuilders in case summaries along with what sanctions (if any!) have been made to the housebuilder.
Fact: The LABC and Premier Guarantee warranties are administered by MD Insurance Services. The Dispute Resolution Service Team is supported by Claim Investigation Surveyors; Premier Guarantee Surveyors is the trading name of MD Warranty Support Services Limited. The NHBC has entered into a joint venture with MD Insurance Services Limited under the name of the Consumer Code for Home Builders Limited (CCHB). The CCHB operates a code providing protection and rights to purchasers of new homes. Ian Davis, Executive Director of NHBC, is a Director of the CCHB. The NHBC paid the Code £235,000 in 2016 and £175,000 in 2015.
The use of ‘Gagging Orders’ isn’t transparency!
Fact: The NHBC and housebuilders use of ‘Non Disclosure Agreements’ also known as “gagging orders” is hardly “transparent” and used for no other reason but to conceal the extent of defects in homes built by housebuilders and the amount of compensation paid. The NHBC also use them when settling warranty claims, especially when further claims might result on particular developments such as weak mix mortar.
“We do not want to increase quantity at the expense of quality”
In order to do this, new homes would need to be being built to a certain higher quality to begin with. Does Stewart Baseley really mean that “we [his house builder members] must be careful not to build homes with even more defects as they slash them up to increase the quantity the government is asking us for?”
It’s time that Stewart Baseley, the industry (NHBC, HBF, house builders) and government came clean, admitted that there is a problem with both the poor quality of new homes being built and the poor service customers receive from indifferent house builders and implement the ten recommendations of the APPG Inquiry Report starting with setting up an independent, government-appointed, New Homes Ombudsman. Anything less is unacceptable.
“we took the decision to take Bovis to court last year – but our contract doesn’tt allow it unless NHBC resolution process has been activated and failed – it has been 7 months since we got NHBC involved and they have played us as much as Bovis – the result is always the same nothing happens.”
We are currently waiting for NHBC to start the agreed work – we had to complain to the financial services ombudsman who upheld our complaint to get some action from NHBC, but it is over 18 months since we complained to NHBC and work has still not started. Once the work has completed we will then pursue Bovis for breach of contract and compensation. We have legal expenses cover on our home insurance so can use that if needed”
A Wainhomes buyer told me:
“it is stunning how little comeback you have, the whole system is massively skewed in the developers favour and they know that and completely abuse it. NHBC is just a method by which they give some apparent credibility and peace of mind to their victims, it’s virtually worthless and also crucially means they don’t need to answer to local authority Building Control. It’s akin to fraud/organised crime, yet you have less protection than when you buy a loaf of bread.”
BBC Radio 4 Today said they asked the big companies if they wanted to take part in the programme – none of them did. But Bovis wanted to apologise and said:
“in some recent cases we haven’t met our customers’ expectations for which we apologise”
Taylor Wimpey PR statement:
“We sincerely regret that some of their customers have experienced issues with their homes at London Park and they apologised for the disruption this has caused. They say they are working with those affected customers and said they would like to re assure them that they are fully focused on completing their programme of remedial works as soon as possible.”
“We are sorry …. we are working with those…” blah blah blah! In one case they have been “fully-focused” on one particular house at Loddon Park for over two and a half years! Stewart Baseley and his builder members have their work cut out! The poor build quality of new homes cannot be dismissed like this.