Just when I think there isn’t anything else this industry can shock me with – coverage in the national press has revealed that Bovis Homes offered “bribes” of up to £3,000 to their buyers if they legally completed or moved into unfinished new homes on or before 23rd December 2016. This was done in a vain attempt to meet the City forecasted target of 4,170 completions for their financial year-end.
The “incentives” were offered to buyers just days before Bovis issued a profit warning, stating that 180 homes were “being deferred into early 2017” resulting in profits lower than previously expected. Equity analyst Anthony Codling at investment bank Jefferies, told The Times: “This will be where they are trying to make their targets. They would have been trying their hardest to complete those homes to get people moved in before Christmas. There is pressure from an investor perspective to meet the volume target and they will do what they can to meet those targets.”
Other analysts said that the cash incentives from Bovis were part of a failed attempt by the FTSE 250 company to meet City targets saying Bovis’ share price had “substantially underperformed the sector over the last seven years.”
Have Bovis Group attempted to deceive investors and the City as to the true year-end results of the Company, by pushing through legal completions (sales) on new homes that were not 100% finished at year-end? I am no expert on financial reporting regulations but more is here. Perhaps this is something that the Financial Conduct Authority [FCA] should be investigating.
Well it was about time something was done regarding the dire quality of new homes built in the UK and the total indifference shown by the housebuilders to even begin address the thousands of defective new homes handed over to their misty-eyed customers every year. Something they have all been aware of for many years. This APPG Inquiry is a start.
Whether this latest inquiry by the All Party Parliamentary Group for Excellence in the Built Environment actually forces through the changes so badly required remains to be seen. At the outset, it is only an inquiry and we have had many previously including The Barker Review of Housing Supply in 2004 and the Office of Fair Trading (OFT) ‘Home Building Consumer Survey’ of 2007. Yet as any UK new homebuyer will tell you, the quality of new homes has not improved. In the 2015 results of the HBF New Homes Customer Satisfaction Survey, some 93% of respondents had problems with their new home. Indeed the industry has done such a good job of normalising defective new homes that all of those surveyed actually expected to have some problems after they moved in.
The inquiry will look at the quality of UK new home building and the potential for improving every aspect of the product handed over to new home-owners.
Posted in New Homes, Snagging and Quality
Tagged customer care, end of year figures, help to buy, house builders, new homes, new homes ombudsman, NHBC, quality, snagging, standards
Buying a brand new home built to exacting standards, the latest energy-efficient designs with a ten-year warranty, where could naive, trusting new homebuyers possible go wrong? Read on to discover the twenty most common mistakes made by Britain’s new home buyers and make sure you don’t become yet another victim of the UK housebuilding industry.
1) Buying a new home because they can not because they should Various government schemes such as Help to Buy schemes make it easier and often the only financially possible way to get on the housing ladder. Being able to buy is not alone a good enough reason to buy a new home.
2) Using the housebuilder’s recommended, suggested or nominated firm of solicitors
The number one mistake made by new homebuyers. Despite it being illegal for housebuilders to insist that buyers use a certain solicitor, it still occurs. One major plc housebuilder even pre-filled in reservation forms with their preferred solicitor! By using the housebuilder’s solicitor buyers are not only relinquishing control of the process to the housebuilder, they are actually putting themselves at a legal disadvantage by not having their interests represented. Issues include; buyers legally completing on unfinished houses, a buyer of a flat later discovered specifications had been changed and the length of lease reduced and being told that completion certificates and warranty documents had been received when they had not even been issued, due to unresolved compliance and warranty problems with the home.
3) Not having their new home independently professionally snagged and inspected
The second biggest mistake new homebuyers make is not having their new home professionally snagged and inspected before they legally complete. It is a sad fact that around 96% of all new homes buyers will have defects and problems with their new homes after they have moved in. Many, if not all of these could have been prevented if the property had been properly inspected at each construction stage by both the housebuilder’s site management and warranty provider. It is therefore essential that new homebuyers use an independent professional to thoroughly snag and inspect their new home before they legally complete. This not only ensures it is, at the very least, fully completed before they pay for it, it also highlights all visible defects, snags and breaches of regulations and warranty standards. Unfortunately both the housebuilders and warranty providers cannot be relied upon to properly carry out the inspections and oversee remedial works to correct defects.
4. Not doing any research regarding housebuilders or new homes before buying
Websites such as our sister site www.brand-newhomes.co.uk and various forums have a wealth of information available for the new homebuyer. This enables them to make a fully informed choice, aware of what can and does go wrong and what steps they can take to reduce disappointment and feelings of regret and resentment after moving in.
5. Paying too much – not getting a discount
All house builders have a price list but only a fool actually pays the full price. Site sales staff nearly always have “negotiables” they can offer buyers with discounts amounting to 5-10% off the full advertised price on certain plots at certain times of the year. In addition, many new homebuyers buy at or near the top of the market paying too much only to later watch as the resale value of their home plummets just as interest rates rise and the housing market crashes.
In the days of British Leyland, it was often said that a car with several faults was a “Friday Car” – meaning it had been built on a Friday, with workers not being quite as attentive to quality and what they were doing as perhaps they should have been. Fortunately, the car industry has come a long way since those days with both the quality and reliability of new cars much improved.
However the same cannot be said of the house building industry. New homes are still being built with as many, if not more faults and defects than they were 20 years ago. The situation is even worse in an “end-of-year figures” new home. These are homes that are sold and the construction process rushed to enable legal completions to take place so as many homes as possible can included in the house builder’s financial year-end report to the City and shareholders. Homes built in the run up to the end-of-year date are always of inferior quality, even worse than the national house builders usually build, with a lower overall standard of finish, incomplete works and forced drying out causing excessive cracking to finishes.
Rush job! Will it be completed in time for you to move in 4 weeks?
Each regional office will report how many homes they have built and sold, within the company’s financial year. The overall total is then recorded in the firm’s final annual financial accounts. Each region is given a target number of completions to achieve each year and everything (and anything) is done to ensure the required figure is reached. In the past it has been known that buyers were handed large cheques by directors as a “sweetener” to persuade them to legally complete on their new home – even though it was nowhere near finished or even ready for occupation. It was not unheard of for buyers to move in with their electricity and heating powered by a temporary generator or their water supply provided from a hose connected to a standpipe in the footpath! Another ruse sometimes used when a part-exchange is involved, was to let the buyer remain in their old home whilst their new was being finished. Quite frankly this practice was nothing short of fraud.