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 2019 some nine months ago, 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. “
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!
The 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!
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!
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”