Government Consultation: New homebuyers – why you should be bothered!
So after four years of campaigning for the government to set up an independent New Homes Ombudsman, new homebuyers finally have a golden opportunity to tell government to set one up. Given the 100,000 or more that buy a defective new-build home each year, (98% reported issues to their housebuilder within a few weeks of moving in, 41% reporting 11 or more “problems”) you would think new homebuyers would be ‘chomping at the bit’ to complete the government consultation!
But here’s the rub; the government are not publicising this consultation at all. National newspapers have given it scant coverage of the consultation since the 18th February 2018 press release. Last Sunday, The Observer provided the only coverage of this important government consultation in a national newspaper since the press release. Even so, it only briefly touched on it saying “The government is consulting on proposals that include a single housing ombudsman to handle complaints” but didn’t say the views of new homebuyers are being asked for. On 10 March, I contacted 35 journalists from national newspapers, just four replied! One had already written the story above, another has plans to cover the topic, PA to the Editor of the Mail on Sunday said she would “forward it to the news desk” and another forwarded my email to her editor as she will be abroad until April.
The Consultation “Strengthening consumer redress in the housing market” was “announced” on a Sunday, 18 February 2018, in a ‘blaze’ of publicity that was little more than a regurgitation of the MHLG press release which soon fizzled out faster than a budget supermarket firework on a wet night. Has lazy journalism replaced investigative journalism? Has anyone actually read the Consultation documentation?
But even if this government consultation was well publicised and made clear that the public should take part, it looks to me that the vast majority of new homebuyers wouldn’t be prepared to spend a few minutes to complete it. There are times, when I feel I am the only person trying to do something about defective new homes and errant housebuilders. Those that buy new homes, apart from a very few, in the main seem happy to do nothing themselves apart from seek help and moan about their new homes on social media. Ignorance and apathy? I don’t know and I don’t care!
I emailed around 400 new homebuyers (those that had previously contacted me for help and advice) asking them to complete this consultation, one replied saying: “Why would I help you out? I’m sorted now.” Point to note you are not “helping me out” you are helping yourself and all future new homebuyers! On a personal level, I will never have a need to use a New Homes Ombudsman, as I would never buy a new home!
Posts on housebuilder Facebook “new homebuyer action” groups usually start:
“has anyone…” “Can anyone….” “Does anyone….” “Question about….”
“I was wondering if anyone could help me…..” But very rarely: “This might be useful/help others”Ask not what other new homebuyers can do for you, but what you can do for other new homebuyers! But how many members of these various Groups will actually complete this consultation? I would be astounded if it was even as high as 1 in 20!
The previous government consultation “tackling unfair practices in the leasehold market” stated: “The response to those plans, published here was overwhelming. We received a staggering response with 6,075 replies” [5,336 private individuals of these 4,489 being leaseholders], demonstrating the strength of interest in this issue.” This due to a large degree by very active Facebook Campaign Group with over 10,000 members and the support and backing of a registered charity with full-time employees, The Leasehold Knowledge Partnership vigorously promoting that Consultation in the press.
So government considers a response of a little over 6,000 is “overwhelming”. Imagine what the response would be if 15,000 (around just 10% of those that buy a new-build home every year) completed the current government consultation and demanded an independent, stand-alone, new homes ombudsman be set up by government.
Just when I think it couldn’t get any worse – two ‘copy cat’ consultations are been launched:
The Chartered Institute of Building (CIOB) consultation is asking members and other industry professionals for views on some of the exact same questions of current government consultation on strengthening consumer redress in the housing market. A spokesman from the CIOB told me:
“we are in support of a New Homes Ombudsman as we highlighted in our response to the APPG for Excellence in the Built Environment Inquiry. What we are trying to do by asking members a select number of questions in the survey is to get some data together to put forward in our response. We are not duplicating the work just that in our experience, members maybe too busy to respond or simply not know the process. Therefore, many CIOB members often share their views with us so we can formulate a response. Of course, what our members say isn’t gospel and we act entirely in the public interest.”
Hot on the CIOB heals comes yet another Consultation, this from Ombudsman Services that only last month declared said it would no longer offer “a broken solution to a broken market“. But it would seem is now touting to be the single “Housing Ombudsman” that is Sajid Javid’s preferred option. Ombudsman Services new survey, “Building Balance”, has been launched, asking for views on a topics such as whether there should be a single ombudsman, and whether the current system is muddling for users. Well the number of simultaneous consultations certainly is!
These are in addition to another consultation on commonhold – a result of the consultation on leasehold reform last year, which is also ends on 16th April 2018.
The RIBA has a “Building on Quality” consultation. Point to note: to build on something it has to exist in the first place!
At least this one from What Mortgage comes with a chance to win £500 (now there’s an idea Mr Javid!) but this looks to me to be little more than an exercise to harvest consumer data that can be passed to housebuilders!
In all likelihood, the housebuilding lobby will get what they want, an ineffective ombudsman, which the industry has control over, that consumers don’t know about (just like their ineffective Consumer Code for Home Builders) and it could well be buried within a wider “Housing Ombudsman” which government would prefer. Great job Jibber Jabber!
If new homebuyers don’t know about this consultation, or worse can’t be bothered to complete it, nothing will change.
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This 8-week consultation, hot on the heels of the ‘behind closed doors’ sessions of the APPG EBE Inquiryto “look into the potential and detail for a New Homes Ombudsman”, announced by Sajid Javid on 29 November 2017, was finally launched on 18 February 2018 and is indeed taking place “in the New Year” It is titled “Strengthening consumer redress in the housing market” but is it what it seems?
Is Javid fully committed to giving beleaguered new homebuyers a statutory New Homes Ombudsman? This being paid for by a levy on housebuilders as recommended in the APPG EBE strangely titled Inquiry report “More Homes – Fewer Complaints” published as long ago as 13 July 2016!
Since this Inquiry report, we have had three housing ministers, yet none of them has seen fit to implement any of the APPG Inquiry report recommendations. We have reviews, considerations, discussions with stakeholders and all manner of excuses and delays. In the meantime, I have encouraged new homebuyers to write to their MPs and demand a new homes ombudsman be set up. So now 20 months later, we have yet another ongoing APPG EBE Inquiry (with any report due August at the earliest with October more realistic) and Javid’s 8-week Consultation ending on 16th April 2018.
The last housing 8-week consultation regarding unfair leasehold practices was from 25 July to 19 September 2017. The government response, dated 21 December 2017, (91 days after that consultation ended) indicted that just 5,336 private individuals took part. The Facebook National Leasehold Campaign Group has 10,000 members! It is to be hoped that at over 15,000 new home buyers will take part in the current consultation and leave the government in no doubt that a stand-alone new homes ombudsman is badly needed. Given previous experience, the government response can be expected around 16 July 2018.
So let’s go through the nitty-gritty, of the Consultation notes, page by page:
So first point to note on page 4 is “Any policy changes brought forward as a result of the consultation would be subject to appropriate assessment” A ‘Get out of Jail Free’ card for housebuilders?
It is clear from Javid’s Foreword that he personally favours a single housing ombudsman. But a Housing Ombudsman already exists, so is Javid saying it isn’t working effectively? Is he using the furore surrounding defective new homes as a way to force through root and branch changes to the existing Housing Ombudsman? It would appear that the current proposal he favours is to combine the various existing ombudsman dealing with housing issues into one and add a function within that for new home buyers to seek redress against their failing housebuilders. Page 25 states that “primary legislation would ultimately be required to create an entirely new organisation to combine most of the existing housing redress functions and potentially also new functions” (a new homes ombudsman?)
On page 6 we find another ‘Get Out of Jail Free Card’ this time for the warranty providers as consumer redress would still remain with the Financial Ombudsman Service. Issues with new homes can be both technical and complicated and not suitable for an assessor at the FOS to rule on even though a new home warranty is in essence, an insurance product.A great deal of this consultation scope relates to tenants, social housing, estate agents, park homes and finally, buyers of new build homes (page 9) where it states that if the housebuilder fails to resolve issues and “the buyer disagrees with the warranty provider’s decision, or no action is taken the consumer can find they have no route to redress.”
Finally, on page 19 we have three paragraphs under the heading “Buyers of new build homes” there is an acknowledgement that “there are gaps in protection and there needs to be more robust protection for homebuyers in the first two years after purchase.” It also states that “We [the government] are working with the Home Builders Federation and warranty providers to address these issues and we want them to continue to drive improvement.” The clear reality is there has been deterioration in the last 20 years. The HBF will always seek to protect the interests of their member plc housebuilders and warranty providers will protect their own interests, both ahead of those of consumers.
Guidance for new homebuyers completing the consultation survey:
Question 2 answer “A person who has recently bought a new home” This is important as it will show the number of new home owners that took part in the consultation and demonstrate the need for a specific new homes ombudsman.
Questions 6 and 7. If you tick “The Consumer Code (IDRS)” please also give your opinion of how satisfied you are. Around 61% of new homebuyer’s cases with the CCHB adjudication scheme succeeded since it started but awards averaged just £1,498 – just 18% of the amount claimed! The government may try to claim the CCHB IDRS is effective even though the previous APPG Inquiry found it “limited in scope” and “does not appear to us objectively to offer consumers a wholly satisfactory form of redress”
Question 8 answer “there are gaps in redress” That is, there is no independent, government-appointed new homes ombudsman!
Question 9 has no option for a New Homes Ombudsman. Those completing are advised to select “Other” and write “new homes ombudsman” in the box
Question 10 answer “Yes” and add “an independent statutory new homes ombudsman” in the box.
It is vital that the new home disputes are regarded as a separate issues from the existing housing ombudsman that deals with tenant disputes etc so,
Question 11 should be answered “NO – different sectors require different practices.”
Question 13 should be answered “Yes” All ombudsmen should publish decisions as it is in the public interest to do so.
Question 14 “Time to deal with a complaint” is more difficult, so answer -“it depends on the complexity of each case” as specialist testing and reports may be required for new home issues.
On page 16 we learn that the Housing Ombudsman awarded compensation in a third of cases ranging from a ‘massive’ £20 to £8,195 – hardly suitable for new homebuyers! Most common awards across the three existing property schemes were stated as a paltry £50 to £500. Clearly miserly awards like these are not going to force housebuilders to improve what they do and don’t do!
Question 16 “Sanctions” Answer – “Financial award greater than £25,000” as justifiable, meaningful compensation must be available for the new homes ombudsman to award. Be wary of “Do you want to continue with the survey?” Click “YES– continue to section 5 addressing the gaps” otherwise you will miss the crucial questions for new home buyers! Was this a cynical attempt by government to avoid responses from new homebuyers? Question 17 Answer “Yes” adding in the box that “the CCHB does not cover disputes regarding snagging, quality and defects in new homes or any warranty issues or disputes with warranty providers.”
Questions 18, 19, 20 and 21 are crucial for all new homebuyers and need your responses as shown below: Question 30 is perhaps the most significant question as it is the only opportunity for a response to ensure that a new home ombudsman is separate from a general ‘one-size-fits-all’ “housing ombudsman” that Sajid Javid appears to prefer.It is imperative that the link to this consultation is shared via social media with all those that have bought a new build home. It needs a high response from new homebuyers to force government to sit up and take note and set up an independent new homes ombudsman as soon as possible. https://www.surveymonkey.co.uk/r/Housingredress
If such a new homes ombudsman existed, all new homebuyers would be able to claim justifiable compensation, not just get their defective new homes rectified eventually! This is in everyone’s interests, those that have bought a new home and those that will in the many years to come! It is just too important to ignore.
Non-Disclosure in ‘Closed’ APPG EBE New Homes Ombudsman Inquiry
Despite 15 organisations and 19 individuals submitting written evidence to the APPG EBE Inquiry “looking into the potential and detail for a New Homes Ombudsman”, there is scant sign of any progress. Initially, written submissions were required to be in by a 22 December 2017. This “deadline” was then extended by the Construction Industry Council (CIC) to 12 January 2018. Yet only recently did a list of those who submitted written evidence appear on the CIC website! At the time of writing there are no details or links to pdfs of these written submissions to the APPG EBE New Homes Ombudsman Inquiry.
So I asked why and the CIC confirmed that:
“We will not be providing links to the submissions this time as some of the witnesses requested not to do so. Therefore, we decided not to be selective not to publish any of them on our website instead of being selective. The evidence received was submitted to us by those who voluntarily wanted to provide information and all evidence has been accepted – and the only selection criteria used was the relevance to the scope of the Inquiry and the questions presented in the “call for evidence”.
Whilst I can understand that many of the individuals who made written submissions might fear repercussions from their housebuilders for doing so, there is no reason why any organisation or institution would not be happy for their submission to be available to download on the CIC submissions page. The CIC spokesperson confirmed to me: “If CIOB or Housing Ombudsman would like to share their evidence they can do so on their websites or issue press release about it.
“The CIC/APPGEBE page is not a public information source.”
Surely that is the purposes of any publicly accessible website? It is also strange and unexplained, that this is the only Inquiry that does not have listed details of the evidence sessions. In addition, half of the Inquiries on the CIC APPG EBE web pages give links to pdf notes of sessions and written submissions.
So when exactly are the sessions?
It is not being disclosed! It would appear this APPG EBE New Homes Ombudsman Inquiry is being conducted behind closed doors with the CIC spokesperson confirming to me that:
“Information will be available to invitees in due course. I am afraid, one must be invited to give evidence or to attend the session. The evidence giving sessions have already started and there will be three of them. The Committee members can only commit to three 2-hour meetings and will invite those whom they would like to ask further questions.”
Just three 2 hour sessions! Really? Is that it for such an important Inquiry that has the potential to help many tens of thousands of people every year? The Inquiry “Into the impact of Brexit on future skill needs” had five sessions! It is such a great pity that the previous APPG EBE chair Jo Churchill was promoted in Theresa May’s January re shuffle. I have no doubt that Mrs Churchill, who is passionate about the issue of defective new homes and indifferent housebuilders, would have taken this APPG EBE New Homes Ombudsman Inquiry by the scuff of the neck and pushed through the setting up of an independent, government-appointed new homes ombudsman. The new APPG EBE New Homes Ombudsman Inquiry chair Eddie Hughes, an MP for all of seven months, would appear to prefer to spend his time tweeting about pancakes!
Laughably, for this important Inquiry, the CIC have said:
“The only room available [at the House of Commons] to hold the last session was hardly big enough for all members of the committee and all witnesses to sit at one time!”
The comments from the CIC spokesperson are as enlightening as they are frustrating.
Why is this important APPG EBE New Homes Ombudsman Inquiry being conducted in secret, behind closed doors?
Who has been invited to attend the three evidence sessions?
Are any from the 19 “Individuals” being “invited” to give evidence?
Are representatives from this dreadful industry being given an opportunity to corrupt the Inquiry report?
Will this Inquiry Report when it does eventually get published, even be in the public domain?
There are most certainly more questions than answers for an Inquiry that has barely begun. Even worse, this Inquiry is being conducted outside of public scrutiny!
Do APPGs achieve anything?
As I already knew, the CIC confirmed the “APPG EBE – is a voluntary initiative of a few parliamentary members, who share interest in issues related to the built environment – not housing/ new built exclusively.”
APPGs have the potential to be used covertly, by organisations representing big business as a lobbying opportunity. But in my opinion, most APPG’s generally serve little purpose, Parliament is not required to act on their findings or research. There are literally hundreds of APPGs, more than 630 on 2nd May 2017. An APPG appears to me to provide little more than something for MPs to do before the restaurants open and the London rush hour subsiding. With many MPs using them as a means to get noticed and an opportunity to be interviewed by the media, promoting their personal political profile in the process. Not that it did previous chair Oliver Colville (58) any favours; he lost his Plymouth seat in the 2017 general election.
This APPG, Excellence in the Built Environment has in the last 6 years, according to the CIC, followed a format of:
Autumn [September-November] – call for evidence
Winter [December – February] – evidence gathering and evidence-sessions
Spring [March – May] – composing the report
Late spring [May]/ early summer [June/July] – launching the report.
So pretty much a whole year per Inquiry – so no great sense of urgency then?
Nice work if you can get it! So given the ‘call for evidence for this Inquiry was in December, (winter) we can’t expect the Report much before the end of August at the earliest. Taking into account the 2018 summer recess from 30 June to 2 September and the following party conference season (15 September to 3rd October 2018) there is a potential that this Inquiry report won’t see the light of day much before October 2018!
Meanwhile the Government announced on Sunday 18th February 2018 an 8-week consultation “Strengthening consumer redress in the housing market” which I will examine in depth, in my next article. The CIC have already confirmed the APPG will: “participate in the recently announced MHCLG consultation by feeding in our findings to them by 16 April, (using the same channels available to wider public)”
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The great weak mortar scandal that housebuilders and warranty providers want to keep hidden.
There is now increasing incidence of new homebuyers reporting the issue of weak or soft mortar in the brickwork of their new homes. The solution if carried out, could in the worst case scenario, involve the demolition and rebuilding of the entire home, perhaps even all the homes on a development as it is also highly likely that most, if not all, of the houses were built with the same weak mortar. Needless to say both housebuilders and the warranty providers don’t want this and obstruct and frustrate new homebuyers who report weak mortar at every turn.
I first came across the weak-mix mortar issue when a foreman bricklayer I knew said he was taking down all the brickwork on a completed Bryant Homes site in Ashington, West Sussex in 2003. It would seem the mortar is question had ‘insufficient cement’ and just a quarter of the required strength.
Ten years later, I was contacted in October 2013 by an owner of a Bellway new home built in 2004 at De Haviland Way, Skelmesdale Lancs WN8 6DG. It had weak mortar and other serious structural issues. In April 2014, the then homeowner thanked me for my support, help and advice I gave regarding his NHBC warranty claim and said he could not discuss it further with me. The home, bought for £159,995 on 26 November 2004, was finally resold for £132,500 on 30 November 2016 – at a loss of £27,495 over 12 years in a rising market! I can only presume that the home was blighted, hence the knock-down price!
Just add water
Since the days, when hod carriers were entrusted to mix mortar in the required proportions, often simply half a bag of cement per mixer batch, most housebuilders have switched to using pre-mixed mortar, delivered dry by tankers to site silos. All the hod carrier has to do is turn on the water tap, switch on and out comes ready to use mortar.
This has advantages over the sand and cement being mixed on site. The primary one being that all mortar would be of consistent strength, colour and workability. “High quality constituent materials are used to produce the perfect dry mix under rigorously quality controlled conditions.” And, according to the manufacturers, the availability of many different colours, any of which would be consistent throughout the building or development. The new silos offered flexibility, with easily adjusted water content to compensate for wet bricks and blocks and the ability to “mix” only use what was needed avoiding waste on site. The new electrically-powered silos meant less noise, fewer deliveries and tidier sites. Above all, the mortar was Quality Assured being manufactured to BES 6001 and BS EN 998-2:2003, and “guaranteed unrivalled quality and technical expertise.”
So what’s not to like?
In recent years there have been a growing number of new homebuyers discovering the mortar in their brickwork is crumbling and “powdery”. This is not confined to a single housebuilder or a particular geographical area. The weak mortar, which can be easily brushed or lightly scraped from mortar joints is being washed away by the effects of weather and is evident in many newly-built homes across the country. The solution (the most commonly one offered by both housebuilders and the NHBC warranty) is to rake out mortar joints to a depth of 25mm and re-point using new, sometimes higher strength mortar. However, the mortar not replaced would still be of inadequate strength. More importantly, the wall ties connecting the inner and outer skins of a cavity wall will be structurally less effective. Unless the external mortar is different, it is conceivable that the structural load-bearing walls of the inner skin, hidden from view, would also have been built using the same weak mortar. During a debate in the House of Commons regarding quality in the built environment, the then APPG EBE chair Jo Churchill MP for Bury St Edmonds, used the example of:
“…the repointing of joints on walls where purposeful demolition and reconstruction should have happened”
No doubt in response to the growing incidence of weak-mix mortar.
Is the weak mortar weak caused by a site issue?
The first line of defence used by mortar manufacturers is to claim the mortar was subject to circumstances on site beyond their control, resulting in the mortar being weakened. This can be caused by the following:
1) Building masonry walls in low or freezing temperatures and/or not protecting walls from freezing overnight. “The agent lets you build at 0 degC if the NHBC is not in”
2) Mortar is damaged or weakened by the use or overuse of brick acid cleaners and/or jet washing.
3) Mortar is remixed on boards after the initial set and has started to harden.
4) Walls are built in dry hot weather and the dry bricks suck water from the mortar before it is fully hydrated.
5) Too little or too much water added during mixing.
This is often further substantiated by their own in-house factory production control compressive strength testing data. It should be pointed out that this mortar is mixed and cured in ideal, controlled conditions, which could never be realistically exactly replicated on a building site.
However, I have seen independent test results which have analysed the mortar mix proportions and these reports categorically prove that in this instance, the mortar has insufficient cement and does not meet the NHBC mortar mix technical and performance standards.
The NHBC warranty “protection” for new homebuyers
As previously mentioned, the first line of defence (claim mitigation) is to offer a 25mm repointing of joints in the affected areas. If the homeowner refuses, the NHBC have a “mortar expert”; 85-year old Barry Haseltine, who the NHBC dispatch to buyers’ homes to carry out “independent assessments”. I am given to understand he is kept very busy!
I possess one of Haseltine’s reports and it makes very interesting reading. For a start, the disappearance of the mortar is being credited to “erosion” not caused by insufficient cement. He says:
“the surface [of the mortar] is somewhat dusty, and when rubbed can allow sand to be removed.”
“For the last 20 years or so, cement has become a complicated subject compared with the relative simplicity that existed when we had Ordinary Portland Cement and a small number of specialist mixtures for example masonry cement”
“It is a regrettable fact that mortar has become a potential problem with regard to durability in recent years, probably linked to the use of cements that have considerable proportions of additions which reduce the active cement in the mixes.”
Haseltine’s report shows the results of 14 test samples, analysed by three different and unrelated laboratories, all reporting a cement : sand mix ratio of 1 : 7.5 at best, to 1 : 9.6 at worst, all being below the required mix ratio in the NHBC standards 6.1.14 Mortar for “general use” (not severe exposure) being 1 : 5.5 cement : sand by volume – designation (iii) under BS EN 1996-1-1.Despite these clear proven results – at least 26% less cement than NHBC standards require and with less cement equating to weaker, less durable mortar – Haseltine concludes:
“The mix proportions that are listed in the table of analyses should not be used to judge the compliance of the mortar with the masonry codes that cover the strength of masonry, or with the Building Regulations simple rules, since the mortar supplier has supplied a design mix not a prescribed one.”
“Unless one has evidence that the strength of 4N/mm2 (M4) that defines a designation (iii) mortar has not been achieved on control tests, there can be no objection to the mortar or the strength of the walls in which it has been used. I do not think that the reduced amount of cement in the mix, as illustrated by a comparison of the analyses with the prescribed cement sand mixes in standards, will have any deleterious effect on the structure of the house, even if such a comparison were to be accepted as being relevant”
A “prescribed mix” is one where the mortar is made in pre determined proportions the properties of which are assumed from the stated proportions (recipe concept). A “design mix” is a mortar whose composition and manufacturing method is chosen by the producer in order to achieve specified properties (Performance concept)
So in summary, the NHBC’s go-to mortar “expert” doesn’t “think” that a significant (26.6%) reduction in cement quantity in a mortar mix would structurally weaken a wall or reduce its durability to withstand the extremes of weather!
Can Barry Haseltine from Jenkins and Potter be considered independent?
The Jenkins and Potter website states that “We have formed a number of close associations with housing developers after many years” – in my opinion, it is a moot point that any of their consultants could be considered truly independent of the housebuilding industry. Barry Haseltine was Chairman of the CEN Eurocode Committee for Masonry and chairman of the British Standards Institution Code of Practice Committee for the design of masonry and its sub-committee responsible for the structural masonry codes. His own reputation and credibility could be called into question if it can be shown that he is wrong. It could therefore be argued it is in his own best interests to protect the housebuilders and in doing so, ring-fence his own reputation.
It is ludicrous that mortar tested by the manufacturer’s in a controlled environment to above a 4N/mm2 compressive strength can be sold as an M4 Design Mix mortar and deemed equivalent to a mortar designation (iii) Prescribed Mix with a cement : sand ratio 0f 1 : 5.5 when the laboratory proved cement content is circa 26% less than the mix proportions required in the NHBC warranty standards require.
What is the cause?
This has yet to be fully established, there are several theories which I will explore in detail in my follow up article. However, whilst mortar suppliers are free to put whatever they like, in whatever proportions, as long as they can achieve a compressive strength of 4N/mm2 in their own tests and the warranty providers appear indifferent to requiring the specific mortar mix proportions in their standards and banning cement replacement additives such as GGBS, the number of homes with weak mortar can only continue to rise. Until there is an industry recognised compression test for mortar in-situ, new homebuyers will be forced to accept sporadic repointing as a “solution” to defective weak mix mortar, with potentially catastrophic consequences, not only for many thousands of individual homeowners, but the overall housing supply. Further reading: What is happening to masonry mortar – (Oct 2017) by Graham True of GFT Use of Ground Granulated Blastfurnace Slag (GGBS) in mortar (Jan 2008) Best practice- potential site problems 2014 – Mortar Industry Association
The government has finally recognised the need for an independent New Homes Ombudsman and an APPG Inquiry is currently calling for evidence on how it would operate.
It is not impossible to build a defect-free new home. All that is required is the will to do so – building with care and with a thorough inspection regime that requires all sub-standard work to be taken down and re done. Yet 98% of new homebuyers report defects to their housebuilder within a few weeks.
Defects in UK new homes are injuring children!
For far too long the industry has used the “built in the open in all weathers” excuse and lowered buyers’ expectations. Bricklayers do not and cannot work in the rain! Render is not applied in the rain, yet there are many defects associated with both. Superstructure accounted for 38% of all NHBC warranty claims in the year to 31 March 2017, costing £35million (41% of total claims) to rectify. Adverse weather does not contribute to walls being built out of plumb, render cracking or missing insulation! All other trades (apart from groundworkers) work inside, often in the same conditions found in most factories.
The APPG Inquiry Report, published on 13th July 2016, concluded:
“Housebuilder’s own quality control systems are not fit for purpose”
“there needs to be an industry aspiration to achieve a zero-defects culture”
“good practice should be seen as building a new home that is defect-free”
It clearly stated the number 1 “key recommendation” – the Department for Communities and Local Government (DCLG) setting 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.”
So it is somewhat disappointing that, 18 months after the report was making the recommendation that an independent, government-appointed New Homes Ombudsman be set up to give buyers an independent form of redress, there has been so little progress. It is to be hoped that following this latest Inquiry, an independent New Homes Ombudsman will be set up by government without recourse to further delay, consultation, consideration, or review.
“Too many new homebuyers are suffering, many are physically drained as a result of engagement with errant 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.” – Rob Wilson ex MP Reading East
The housebuilders’ lobby group the Home Builders Federation (HBF), will no doubt tell this Inquiry that (according to the industry’s own customer satisfaction survey) “84% of new homebuyers are satisfied with their new home.” But as Communities Secretary, Rt Hon Sajid Javid alluded to in his speech at the NHBC on 29 November 2017:
“too many new-build homes are simply not good enough.” You [HBF] can point to customer satisfaction levels of between 80 and 90%, something I’m often told about but [of new homebuyers] finding faults that take months and sometimes even years to remedy. It’s not just disappointing – it’s devastating. But just think about those 217,000 new homes built last year. Even if 80% of them have no issues, that still leaves well over 40,000 families living in accommodation that they don’t think is good enough.”
An ever growing number of new homebuyers have to move out of their new homes, often for several months, whilst their house is taken apart to rectify serious, often structural defects. More recently, there is a growing incidence of weak-mix mortar.
It is to be noted that the APPG Inquiry deadline for written submissions has recently been extended – the day after the BBC reported on the dire quality and defective new homes – from 22 December 2017 to 12 January 2018. It is hoped this is not to give the industry extra time to get its “ducks in a row.”
The current “procedures” limited as they are, serve to protect housebuilders and the warranty providers rather than help consumers. The only “alternative”, as has been written in many letters from various housing ministers and staff at the DCLG over the years, is for buyers to take action through the courts for monetary compensation.
As most buyers realise, even those with legal expenses insurance, this is a lengthy and costly process with no guarantee of a successful and fair outcome. Indeed, housebuilders have deep pockets and vigorously defend every attempt by the very few new homebuyers who courageously take this course of action. Housebuilders do this in the certain knowledge that it will cost them far 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.
It is no longer a case of getting (all be it eventually) a few minor defects and snags rectified by the housebuilder being a satisfactory outcome. Now there is a clear case for justifiable compensation paid by housebuilders and/or warranty providers, to all buyers of sub-standard defect-ridden new homes.
A recent announcement by Communities Secretary Sajid Javid on 29 November 2017, mentioned “bold options” that the Government “will look at to improve consumer redress across the housing sector” – Setting up an independent New Homes Ombudsman should be its priority.
Worryingly, it would appear that it is the Government’s intention of rolling all existing ombudsman (Housing Ombudsman, the Property Ombudsman and Ombudsman Services’ Property, and the Property Redress scheme) into one, all-encompassing, ‘one-size-fits-all’ “Housing Ombudsman” rather than a simplified New Homes Ombudsman, purely for consumers that buy new homes. I firmly believe a separate, stand-alone, fit-for-purpose, independent New Homes Ombudsman is the only way that this industry will be forced to look inwards at what it does and make both the quality of new homes and customers, their number one priority.
As it stands, housebuilders are showing no intention of taking proactive measures to improve the quality of the new homes they build. Consumers need a fully independent means of redress. It is now essential to appoint a New Homes Ombudsman for the house building industry. All existing legislation to protect consumers, including The Consumer Rights Act 2015, does not apply to property.
“I applaud the Department for Communities and Local Government for getting the Home Builders Federation to look into the voluntary ombudsman scheme, but perhaps the time for any such voluntary scheme has passed.” Perhaps?
“…the repointing of joints on walls where purposeful demolition and reconstruction should have happened” – No doubt in response to the growing incidence of weak-mix mortar.
“We must have not a nice, cosy, industry-led ombudsman, but an ombudsman process that has real teeth and the capacity to make a material difference” said Tony Lloyd MP for Rochdale
A New Homes Ombudsman, by its very existence would force housebuilders to look at what they do (and don’t do) forcing them to strive to do better, in the certain knowledge that a buyer can complain to an independent ombudsman who would potentially, be able to award unlimited, justifiable compensation. Such awards would become a matter of public record. No longer would housebuilders be able to delay and defeat buyers’ repeated attempts to have their defective new homes fixed.
New Homes Ombudsman: FREE – FAIR – FOR EVERYTHING
Free – At no cost to new homebuyers making a complaint following the housebuilder or warranty provider issuing a final deadlock letter.
Fair – A New Homes Ombudsman would (and must) be entirely independent of the housebuilding industry – something that clearly the warranty providers and the Consumer Code for Home Builders are most definitely not! Fully transparent, appointed and audited by Government.
For everything – Everything and anything that can and does arise when buying and living in a new home. Dealing with buyers’ complaints including misleading and incomplete marketing information and underhand selling practices, unfair contracts, poor build quality, defects, non-compliance with Building Regulations and/or warranty standards, inadequate or indifferent after sales service, conflicts of interest, tenure and boundary issues, contractual disputes – with the New Homes Ombudsman being able to order housebuilders and/or new home warranty providers to pay buyers justifiable and meaningful compensation awards.
The New Homes Ombudsman must be fully-independent and government-appointed, NOT one of many “Ombudsman” in the Ombudsman-services.org who act as little more than an outsourced dispute resolution service to various sectors. Cost Effective Dispute Resolution (CEDR) is not going to work either!
But the New Homes Ombudsman should not be part of a wider, ‘one-size-fits-all’ one-stop, general purpose “Housing Ombudsman” as the current rhetoric from Government would indicate. I was horrified that merging the various existing residential Ombudsman into one “Housing Ombudsman” is being given serious consideration even though it would also include a mechanism of independent redress for new homebuyers for the first time. Whilst this is better than the complete absence of any independent means of redress that new homebuyers currently have, it would not be in the best interests of new homebuyers if the badly needed New Homes Ombudsman was set up as part of a wider “Housing Ombudsman” service.
It would take a considerable amount of time and presumably new legislation to combine the existing ombudsmen into one office. Furthermore, the new-build industry is sufficiently large and errant to fully justify a dedicated New Homes Ombudsman of its own – which would specialise in the many unique issues and technicalities of the new-build sector. Camouflaging a New Homes Ombudsman under the umbrella of a general “Housing Ombudsman” would also make the New Homes Ombudsman less conspicuous to the very people who would need and benefit from it.
Housebuilders and warranty providers operational basis is to ‘bat away’ buyers’ complaints and warranty claims rather than work in the consumer’s best interests. Despite many years of opportunity, this isn’t going to change. It is now time, as I would hope this Inquiry will conclude, that UK new homebuyers were given something from this government. A small concession that if (or rather when) they are unfortunate enough to discover major, preventable defects in their new home, or housebuilders fail to rectify defects in a timely manner, they can apply to an independent, government-appointed New Homes Ombudsman who could award justifiable and meaningful levels of compensation.
As Communities Secretary Sajid Javid MP announced on 29 November 2017 recognising the need for an Ombudsman to give new homebuyers a form of redress, I would hope, following the recommendations and evidence I have submitted to this Inquiry, he will announce that a stand-alone independent New Homes Ombudsman will be now be set up by the end of 2018.
In the past, government ministers and the DCLG have been hoodwinked into believing that the industry’s own voluntary Code, the new home warranty and the building regulations offer sufficient protection for new homebuyers. Government also believed that consumers are “more likely to be supported by independent professional advice from lawyers and others capable of giving advice top their clients and because the terms of the contract are more likely to be negotiated.” and “they can take action through the courts for monetary compensation.”
However, despite the obvious need and benefits a New Homes Ombudsmanwould give consumers, many within the industry, will maintain that a fully independent New Homes Ombudsman is not necessary. Their lobbyists, the Home Builders Federation (HBF) claim “the overall quality of new homes has never been higher than it is today” stating that “the overwhelming majority of people are happy with their new homes. In the small number of cases where buyers encounter problems the industry is fully committed to completing them as soon as practically possible.”
This is quite simply, not the case.
Comments Off on New Homes Ombudsman – APPG Inquiry 2018
Posted on29/04/2017byNew Home Expert|Comments Off on Taylor Wimpey Announces £130m Leasehold Sticking Plaster Solution To Housebuilders’ PPI
Caught in a trap! Taylor Wimpey “sorry” for ripping off leaseholders!
Some mistakes are hard to fix. It is better to be careful – not sorry!
Taylor Wimpey used a trading statement last week to announce their ‘conclusions’ following a review into the company’s historic lease structures. This focused solely on a specific lease structure used from 2007 to late 2011, which provides that the ground rent doubles every 10 years until the 50th year. In doing so, the company created a new asset class that is now very attractive to specialist investors, because it equates to an annual interest rate of 7%. Taylor Wimpey claimed these leases “are considered to be entirely legal.” It remains to be seen whether the charges would be deemed by a court to be ‘fair and reasonable’ Under the Unfair Terms in Consumer Contracts Regulations 1999. Taylor Wimpey now admit that: “the introduction of these doubling clauses was not consistent with our high standards of customer service and we are sorry for the unintended financial consequence and concern that they are causing.” Surprisingly, Taylor Wimpey says the total cash outflow of around £130million “will be spread over a number of years.” In addition, this only applies to the “qualifying customers subject to eligibility checks” – only those owners who bought from Taylor Wimpey are to be “helped.”
Ground Rent Review
Taylor Wimpey has written to buyers who have complained about their leases with the onerous ground rent doubling clause. In the letter Taylor Wimpey outline its “Ground Rent Review Assistance Scheme” funded by the company, which offers to negotiate on the customers’ behalf with freehold owners for a ‘Deed of Variation’ to “convert existing doubling leases to an alternative lease structure incorporating materially less expensive ground rent review terms.” with Taylor Wimpey covering the financial cost of doing so”.
Welcome to ‘rabbit hutch’ Britain as Government gives the green ight to even smaller micro homes
“Ridiculous” – “immoral” – “dog kennels” – “shoe boxes” – “rabbit hutches” These are just some of the words local residents have used to describe Britain’s micro homes – Government-endorsed “favelas in the sky.”
It would appear the Government is intent on cramming an ever increasing number of ‘hard working British people’ into ever smaller areas and living spaces. Evidence of this provided by the Housing White Paper, with its proposal to review the guidance on minimum sizes for new homes, despite the “nationally described space standard” only being in force since October 2015.
“The Government proposes to amend the National Planning Policy Framework to make it clear that plans and individual development proposals should:
make efficient use of land and avoid building homes at low densities where there is a shortage of land for meeting identified housing requirements;
address the particular scope for higher-density housing in urban locations”
We also want to make sure the standards do not rule out new approaches to meeting demand, building on the high quality compact living model of developers such as Pocket Homes ”
“The evidence points to an industry…..which will at times ride rough-shod over dissatisfied buyers”
“the Code [Consumer Code for Home Builders] does not appear to give homebuyers the safeguards we think they should expect”
“it does not appear to us objectively to offer consumers a wholly satisfactory form of redress”
“The Consumer Code for Homebuilders is limited in its scope”
Well it’s about to get a whole lot worse! In September 2015, the CCHB announced a triennial review of Code, at that time changes were expected to come into effect in 2016 – “to ensure it continues to evolve with the industry and changing consumer needs and as a result of adjudication cases.” It claims “The industry has now made great strides in producing an updated Consumer Code which is fit for purpose in today’s world” Talk about hype!Changing consumer needs? Fit for purpose? Last week the CCHB published the 4th incarnation of their consumer code, which I believe now contains specific revisions which severely diminish the likelihood of a successful claim by new homebuyers seeking redress and justice from errant housebuilders. The changes, place additional restrictions that can best be described as obstructive, the sole purpose of which is to protect the industry from the very few homebuyers that go through the rigmarole of Code’s dispute adjudication process.
Posted on30/03/2017byNew Home Expert|Comments Off on Latest HBF Customer Satisfaction Survey shows new home quality is still falling
HBF Customer Satisfaction Survey Results 2017
HBF survey results 2017. After a long and unexplained delay, the Home Builders Federation (HBF), with an income of over £3million (2015), mostly funded by its member housebuilders, finally published its annual New Homes Customer Satisfaction Survey Results and house builder star ratings for 2017 late yesterday. Unlike the rest of us, housebuilders have known their scores throughout the year in real time, thanks to the NHBC online portal providing monthly updates on just how their customers are rating them. So why the delay HBF? What possible reason could there have been for requiring a total of 12 weeks, two more than in 2016, since the last customer responses for the HBF survey year to 30 September 2016, were received on the 14 January 2017 cut off? By strange coincidence, it was the same day that Article 50 was triggered, making it unlikely the poor survey results would get any media attention with all the Article 50 coverage.
Did the HBF decide it was a good day to bury their bad news?
Perhaps calculations were being done to effect an overall more favourable impression of customer satisfaction with new homes. Perhaps there were discussions about including late, more favourable surveys and ruling out unfavourable responses on the grounds of invalidity? Perhaps the PR spin was more difficult to write this year? Who knows? Certainly not me. Even though the HBF Chief Executive Stewart Baseley stated on national radio just last month that he is “a great believer in transparency”, the HBF survey remains a mystery to all but those involved in its carefully scripted questions and the statistical “methodology set out by the NHBC themselves” used in the analysis and validation of the survey by the University of Reading’s Statistical Service Centre.
Posted on24/03/2017byNew Home Expert|Comments Off on Reward for failure as ex Bovis CEO David Ritchie stands to receive nearly £2m pay off
Regardless of what fictional character Gordon Gecko once said, “Greed for want of a better word is” most definitely not good! As details emerged earlier this week of David Ritchie’s pay-off. The former chief executive of Bovis Homes “resigned” on 9th January 2017 after a profit warning and ahead of the scandal of buyers being paid up to £3,000 to legally compete on homes that were not finished, and the announcement by Bovis that they had set aside £7 million in February to redress complaints.
A Section 430(2b) statement by Bovis homes, confirmed Ritchie is to be handed a total of £635,430 in salary and bonus and a further £909,250 in shares under the long-term-incentive-plan. He also stands to receive a further tranche of 40,556 shares currently worth £357,805 up to 24 February 2018. A total possible payout of £1,902,485!
He will be paid a lump sum of £242,180 and will receive a total of £338,250 from July until December salary in lieu of notice. His contractual notice period runs until 8 January 2018.