MPs call for the DCLG to set up a New Homes Ombudsman in APPG Inquiry Report published on 13 July 2016.
At long last seven months after the last evidence session on 14 December 2015, the All Party Parliamentary Group for Excellence in the Built Environment (APPGEBE) has finally published the findings and recommendations in the report following its: “Inquiry Into the Quality of New Build Housing in England”
It would appear that the house builders’ share price rise since the financial crash of 2008, has been built on the same dodgy foundations as some of their houses are. A business model built on selling sub-standard houses to sub-prime borrowers.
This was illustrated during the first two days of trading following the UK’s historic vote leave the EU. Worst hit in the initial market panic were Banks and shares in the listed house builders. Despite this, some ever-greedy directors used the Friday crash to buy more shares on the cheap, known as “catching a falling knife” and promptly lost another 15%! Taylor Wimpey Non-Exec director Dame Kate Barker, 59, who produced the Barker Review on housing supply in 2004 – which resulted in the industry setting up the HBF Customer Satisfaction Survey two years later, but has failed to have any impact on improving either supply or quality – bought 20,000 Taylor Wimpey shares for £26,953 but the shares closed down 15% leaving her with a paper loss of £3,800.
Earlier today, BBC Radio 4 You and Yours interviewed Oliver Colvile MP, chairman of the All Party Parliamentary Group Inquiry into the Quality of New Build Housing in England, looking into measures that would improve the quality of new-builds and how to give greater protection to new homebuyers.
Oliver Colvile MP told the programme:
“I am afraid I’ve had an awful lot of constituents who have come to see me and talk to me about how they don’t feel they have got the product which they thought they had actually bought.”
“The consumer wants to see, they want to actually see something that is going to deliver a quick and easy resolution as far as their contractual decisions have been made. After all, when we go and buy a new home it normally is the most expensive thing biggest investment which we make in the whole of our lives, for them [HBF] to be complacent I have to say, to say its 85% [satisfied with their homes] well what about the 15% then who have actually had a fairly a bad deal out of it. The other thing as well is that I don’t think the house builders generally understand that they’re dealings with the person who is buying it [the new home] isn’t necessarily always particularly brilliant. The consumer feels that actually somewhat concerned that they are actually banging their head against a brick wall, by trying to get the builders to take some notice of all of this.”
The waiting is nearly over. Its official! The New Home Ombudsman is coming! A culmination of two years’ campaigning and ten years dedicated work highlighting the plight of UK new homebuyers.
I spoke. They listened!
The APPG Inquiry report is being finalised and is due for publication in “at the beginning of June 2016.”
On Tuesday 17 May 2016, chair Oliver Colvile MP made a speech at the JCT Parliamentary Reception highlighting the findings and the main recommendations.
He said that he, and “many of his Parliamentary colleagues across the country have had new homebuyers coming to their MP’s surgeries to complain about the way their new home was built. Although the report hasn’t been finalised, I can confirm that the Inquiry Committee has agreed on a number of recommendations and I would like to share a few of those with you”
- A New Homes Ombudsman should be set up. This would mediate disputes between consumers and their builders or warranty providers to offer a quick resolution procedure.
- Standardised house building sales contracts should be enforced, meaning uncertainty surrounding bespoke builders’ contracts would be removed.
- There should be a mandatory right for buyers to inspect and, should they wish, carry out a full survey prior to financial completion. More details of this particular point will be announced in the final report.
- To improve transparency, builders should be required to provide homebuyers with a comprehensive information pack. This would include plain English explanations so that homebuyers can understand exactly what they are buying.”
It is not just house building that has dissatisfied customers. However, most other industries have an Ombudsman and official Regulator.
If you bought a new home in the last ten years, the following statements will have a familiar ring to them. After all, the house building industry has a dreadful reputation for both quality and customer service, yet makes every effort to smokescreen and spin the opposite.
- “Stop solving problems…just make the customer happy”
- “staff are under pressure to bat away complaints and instead focus on appeasing callers to boost satisfaction ratings”
- “persuading customers to believe all is fine is more important than getting to the bottom of their problems”
- “All [the company] care about right now is the net promoter score. Staff are rated on this survey it sends out after a call or web chat. Well actually, on the first question only, “How would you rate [the company] to a friend?”
- “one of the advisors I spoke to made promises they didn’t deliver. I wonder if this is the way they are trained – to reassure the customer but actually not to do anything.”
- “other support departments are unhelpful and more interested in their own KPI, pretending they care about customers, but the reality is they are treating them appallingly”
The idea for a New Homes Ombudsman is not new. I have been campaigning for nearly two years, see this blog, my website forum, the “Unhappy New Home Buyers” Facebook Group and lobbying on Twitter. More recently I attended the APPG Inquiry into the “Quality of New Build Housing in England” and proposed the introduction of a fully independent New Homes Ombudsman as one of a series of measures that would force house builders to improve both quality of the homes they build and the service they give their customers after they discover the inevitable defects and problems.
My proposal for a New Homes Ombudsman was met with widespread acceptance at the APPG Inquiry (2nd meeting) and during the question and answer session; Lord Richard Best said “I chair the property ombudsman which looks after estate agents and things like that and it works well, so at some stage I’d like to explore the Ombudsman concept as a way of trying to handle some of these disputes…..”
APPG Inquiry Second session: – What we suggested.
The majority of those that made submissions to this APPG inquiry into the “Quality of New Build Housing in England” were from either commercial organisations or institutions with a vested interest in or close affiliation to the house building industry. Their presentations would appear to be focused away from the actual problem – housebuilders’ poor workmanship standards and inadequate levels of customer care – with their emphasis on their own operations and/or sustainability and energy conservation. However, the committee were given presentations by what the APPG Secretariat (CIC) deemed “concerned citizens” four in the second session and one in the last session.
The All Party Parliamentary Group for “Excellence in the Built Environment” was formed in July 2010. The group is chaired by Oliver Colvile MP, with Nick Raynsford and the Earl of Lytton acting as vice-chairmen. The latest APPG Inquiry is looking at the Quality of New Build Housing in England and “examining the potential for improving every aspect of the product handed over to new home-owners.” (For details of the full committee see end of this article)