New homebuyers are short-changed as the latest revision to housebuilders’ ‘non-mandatory’ Consumer Code is published.
A year ago, I wrote an article that I showed the Consumer Code for Home Builders (CCHB) is failing new homebuyers. The all-party parliamentary group (APPG) Inquiry Into the quality of new homes concluded in its Report that:
- “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.
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.
The parliamentary petitions system has come under criticism lately when it was revealed that fewer than ten of the thousands of petition appeals launched by the public had led to a change of policy.As at 3 March 2017, more than 28,400 applications were submitted to the Commons petitions committee in the past 19 months.
The Petitions Committee review all petitions published. The website says they “select petitions of interest to find out more about the issues raised” and “have the power to press for action from government or Parliament.”
Carbon Monoxide Alarms
The fitting of carbon monoxide alarms in new homes should be a mandatory requirement of the Building Regulations in England and Wales. It may come as a surprise to learn that every year over 4,000 people are admitted to hospital with carbon monoxide poisoning that could lead to brain damage and strokes – with 40 fatalities recorded in England and Wales. One in nine British homes have boilers classified as unsafe.
You can’t see it, you can’t smell it. Carbon Monoxide – the new home defect that kills!
In Scotland and Northern Ireland, the equivalent to the building regulations, requires a BS EN 50291 kite-marked carbon monoxide alarm to be fitted when any new or replacement fuel appliance is installed (except cookers). This covers any fuel burning appliance, including those that burn gas, oil, coal and wood. The alarms must be fitted in any room with the appliance or if it is an enclosed boiler, just outside the enclosure and any room that has a flue running through it. Alarms can be mains or battery powered but if the alarm is battery powered then the battery should last for the life of the alarm.
No requirement in England and Wales:
But the Building Regulations for England and Wales, Approved Document J, only require carbon monoxide alarms to be fitted when any new or replacement solid-fuel appliance is installed. Examples of solid fuel burning appliances being wood burners, open fires etc. There is also additional legislation requiring a carbon monoxide alarms to be fitted in all rented residential accommodation with gas appliances, but not in owner-occupied homes.
“We were promised a White Paper, but we have been presented with a white flag – feeble beyond belief”.. said John Healey shadow minister of state for housing. Others commented it was a “predictably damp squib” and a “missed opportunity.” Even Redrow said it was “disappointing” with chief executive John Tutte saying the housing white paper was very light on details and he was surprised it was “more of a consultative document.” This is hardly surprising as the stench of the Home Builders Federation (HBF) was all over this housing white paper, an example being the caving into pressure from the likes John Tutte regarding newts “delaying” new home building. Britain needed ‘Donald Trump’ style action and got a Donald Duck builders’ puppet. “Hard-hitting” proposals were watered down to Westminster’s famous thin gruel, generally becoming ideas for consultation, subjects for further discussion and situations to monitor. This 104 page housing white paper is little more than a plan for more talking and a missed opportunity for decisive, positive action.
On Tuesday DCLG secretary Sajid Javid declared that Britain’s housing market was indeed broken. With the average home costing eight-times average earnings and a total of 2.2 million working households with below-average incomes, spending a third or more of their disposable income on housing, it’s hard to disagree! Mr Javid claimed his housing white paper will provide “radical lasting reform” to fix it.
The NHBC has come into justifiable criticism in the national press recently. The NHBC provides warranties for around 80% of new homes built in any given year. Last year its accounts show it spent £90 million fixing 11,000 defective new homes. What is not listed is the total number of claims the NHBC rejected because the estimated cost of remedial work was judged (by the NHBC) to be less than their ‘minimum claim value’, currently £1,550. So unless buyer’s homes need costly repairs, their warranty claims are often rejected.
The NHBC state on their website:
“Our purpose is to work with the house-building industry to raise the standards of new homes and to provide protection for homebuyers in the form of Buildmark warranty and insurance. We are an independent, non-profit distributing company limited by guarantee – neither part of government, nor a charity. Our business is run by the Board of Directors with surpluses being re-invested in the improvement and development of our products and services.”
The standard of UK new homes is at its lowest since 2009 according to the results of the NHBC’s own Customer Satisfaction Survey! So it might come as surprise to learn that in yesterday’s Guardian, Graham Ruddick reported that the NHBC has been paying around £10m-£15m every year to housebuilders in what he describes “is effectively a profit-share agreement.”
Is your new home killing you?
The shocking truth is, any new home built since 2000 that has a gas central heating boiler could be lethal. There is now widespread recognition that systems with concealed twin extended boiler flues, pose a significant risk of carbon monoxide poisoning. I am calling for a mandatory requirement that all new homes must be fitted with carbon monoxide alarms. In addition, every new home must be independently inspected, not merely ‘signed off’ and certificated by the installer.
Carbon monoxide poisoning kills
14 November 2007
Maria Ighodalo (28) dies from carbon monoxide poisoning
London and Quadrant housing association tenant, Maria Ighodalo, died in a block of flats, known as ‘Beulah Hill’, in Upper Norwood from carbon monoxide poisoning. The flat had a gas safety certificate and a concealed flue heating system.
27 February 2008
Elouise Littlewood (26) dies from carbon monoxide poisoning
You would think that following the tragic death of 26 year-old dance teacher Elouise Littlewood on 27 February 2008, who died from carbon monoxide poisoning from a faulty boiler installation in her flat on the Barratt development at ‘Bedfont Lakes’ in Notting Hill West London, that all house builders would be double checking every boiler in every new home they build, to ensure they are 100% safe and installed to manufacturer’s and GasSafe instructions. Elouise bought the two-bedroom property through a shared ownership scheme with Notting Hill Housing confirming: “Barratt had installed the gas system and produced a gas safety certificate with a one-year guarantee.”
We all know about the oft-quoted HBF survey question: “Would you recommend your builder to a friend?” In the 2016 survey results an somewhat unbelievable 85% said they would, but did they? Most of the large house builders have recommend a friend schemes also known as “send a friend.” Normally a leaflet outlining the scheme is dropped in the Welcome Pack buyers are given when they move in to their new home. They offer a cash payment to buyers who recommend a friend or someone who goes on to buy a home from the house builder. These payments vary considerably from a paltry £300 (Keepmoat) up to £4,000, although it appears £500 is the most common.
For most, the extra money will come in handy at a time of need, especially with all the costs associated with moving home. But beware there is a procedure and significant hoops to jump through before you can get your referral cash, even then it can take several weeks. The referral payment is only made following the friend’s legal completion.
Firstly, you should also consider whether your house builder is worthy of recommendation. Would your friend thank you if their new home turned out to be an unmitigated disaster from hell as they often do?