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Consumer Code For Home Builders Revised

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?
Consumer CodeLast 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.

The Home Builders Federation (HBF) fingerprints are all over these revisions. The HBF latest Annual Report confirmed the “HBF sits on the Code advisory forum to ensure house builder’s interests are represented. We submitted a response to the ongoing review Consultation and are working to ensure that any changes are workable for the industry.”
Well that’s mission accomplished! 

Code approval and compliance with EU Directive

Revising the Code provided an opportunity for the Code to evolve and attempt to meet the requirements of the Chartered Trading Standards Institute’s (CTSI) Standards for Alternative Dispute Resolution (ADR). Approval by the CTSI is required to comply with EU DIRECTIVE 2013/11/EU (21 May 2013) on ADR for consumer disputes. This requires the ADR to be provided by a certified body to show it meets the principals set out in the Directive and associated regulations. ADR schemes cannot achieve certification unless they meet strict criteria for impartiality and independence.

“In 2014, the Code’s management board took the decision to gain approval through the Chartered Trading Standards Institute (CTSI) Consumer Codes Approval Scheme (CCAS). It was important to show how the Code helps strengthen consumer protection and improve customer service standards by approval of the CTSI under their CCAS. This facilitates self-regulation.” 

Despite the latest revisions, the Consumer Code for Home Builders has not been approved or accredited by the CTSI. Indeed, the now defunct Office of Fair Trading (OFT) withdrew its endorsement of the scheme in 2010 before it was even launched! This was because the Code’s dispute resolution service would only deal with complainant claims below £15,000. The OFT had wanted a cap of £150,000. At the time, Rod MacEachrane, a former NHBC commercial director and chair of the CCHB management board, confirmed that the OFT was:
“no longer part of the equation. It (OFT) said we were not meeting our commitments under the market study” [OFT report in 2008]. MacEachrane told Building magazine that “a cap of £15,000 would deal with 95% of disputes and was vital to ensure it remained a low-cost dispute resolution service.”
Low cost for house builders that is!

To add to the confusion, complaints can be covered by a different and separately operated Code – the Consumer Code for New Homes  (CCNH) – which is not available to buyers with NHBC, LABC or Premier Guarantee warranties. Under the CCNH claims  “are subject to a maximum aggregate award of £50,000 inclusive of VAT and maximum awards for financial loss of 25% of the purchase price of the Home and maximum awards for emotional distress and/or claims for inconvenience of £1,000” –  far more generous than the “protection” buyers allegedly have with the CCHB!

The CCHB annual report (2015)  said:  “Consumer Code is a central part of the core criteria for the Help to Buy schemes in England Scotland and Wales.” Nevertheless many housebuilders regularly breach one or more of the Code’s 19 requirements as can be seen from the Adjudication Case Summaries which show multiple Code requirement breaches in the 57 homebuyers’ claims that succeeded in 2016. Nevertheless, the awards in these successful cases represent less than a fifth of the total amount claimed by new homebuyers. 

So what are the changes to the Consumer Code for Home Builders?

The new CCHB 4th edition April 2017  comes into effect on 1st April 2017, but there is a transitional period and for reservations made before 1 July 2017complaints will be assessed against the previous version (Version 3) of the Code.” 

Re definitions:

Consumer Code with Builder's GuidanceFirstly there are a few re definitions most notably that the “Dispute Resolution Scheme” is now referred to as the “Independent Dispute Resolution Scheme”, no doubt an attempt to give the impression of independence from industry interference and to head off the growing calls for a New Homes Ombudsman  to be appointed by government, which will make the CCHB entirely redundant. The needs of ‘vulnerable customers’ should now be considered at all times. In the absence of any definitive guidelines, we can only presume that housebuilders will have to formulate their own views of defining vulnerable customers. But I doubt naïve first-time buyers will be considered “vulnerable.” 

Scope of the Code

The Code does not apply to investors now defined as buying more than one property on the same development for investment purposes. 

Making the Code available – Code Requirement 1.2

Strikingly, for a Code that so few new homebuyers are aware of, with just 55% being given the Code on Reservation (requirement 1.2) according to responses to Q19 of the HBF survey, the requirement to display the Code and give a copy to anyone who asks for it has been removed. The Code scheme Logo must now be displayed in housebuilders’ and agents’ sales offices and in sales brochures, but the requirement for the housebuilder to inform their customers that further guidance is available and how they can get this has also been removed.

Homebuyers must still be provided with the Code (Code Scheme) with the Reservation agreement “but this can be done by electronic means” – a link to the Code website or an attachment in an e mail presumably. In addition, there is no requirement to provide the version of the Code that contains the ‘House builder guidance’ – essential for those wishing to make a claim using the CCHB Dispute Resolution Scheme. The version with ‘builder guidance’  can be found here but can hardly be considered easily accessible!

Consumer Code for Home Builders LogoI recently visited an 18-month old Barratt sales office and can confirm they were no CCHB logos anywhere to be seen. On mentioning the CCHB to the sales advisor, I was given their only hard copy, a second edition CCHB dated April 2010! However, it was confirmed that the CCHB was given to all buyers with warranty details at reservation. 

Sales and advertising – Code requirement 1.5

High pressure selling techniques are now excluded to meet CTSI requirements. Previous references to the Property Misdescriptions Act 1991 and the Consumer Protection from Unfair Trading Regulations 2008 have been replaced with “comply all relevant legislation” 

Pre purchase information requirement 2.1

All “event fees” such as deferred management charges and fees on re sale must be declared at the Reservation Stage. This is especially relevant to retirement homes, a sector that has been heavily criticised. It will also be relevant to other leasehold new homes especially leasehold new houses.

The requirement to be shown “the layout” has been qualified to now show a “general layout” following adjudication decisions made on historic complaints using the dispute resolution scheme, no doubt designed to reduce the likelihood of a claim succeeding. 

Health and Safety – Code Requirement 2.4

There is a clarification that access to areas under construction may be properly barred or restricted. In other words, you cannot view or inspect your new home until all works are completed. As is often the case, works are ongoing right up to and after buyers legally complete and are given their keys, this has the potential for confusion. No doubt all housebuilders will use this requirement as and when it suits them to do so.

Pre Contract Information – Code Requirement 2.5

It is illegal for a housebuilder to require any homebuyer to use a specified firm of solicitors. Nevertheless, under the Code, buyers can be induced to do so by builders offering incentives such as legal fees paid, part-exchange or stamp duty paid.

Reservation – Code requirement 2.6

Various clarifications including how long the price is valid and the likely range of monetary deductions from the reservation fee, if the sale is cancelled. Most important to note is that due to “a high number of adjudications have been found against home builders”, the guidance now suggests that “appendices and schedules be attached to the reservation agreement” evidenced by both the housebuilder and the homebuyer in recognition of them having been seen and received and to act as proof “that the home and its specification was agreed and explained at the point of reservation.”

The Contract – Code requirement 3.1

Reference to specific legislation has been removed. Namely the Unfair Terms in Consumer Contracts Regulations 1999. No doubt to make it more difficult for buyers to find out how they have been wronged.

Timing of construction – Code Requirement 3.2

Due to issues surrounding “completeness” of the home at handover, guidance has been extended to suggest that the housebuilder should explain to the homebuyer that there may be “minor items outstanding.” No doubt if there is a written record, this may head off claims from buyers moving into incomplete homes. The definition of “minor items” was not clarified. Builders are guided to inform buyers that they should “give reliable and realistic information when construction of the home may finish”, but housebuilders should “make it clear that they cannot be precise.” So how can it be reliable?

Health and Safety for homebuyers- Code requirement 4.2

Reference to specific legislation, namely the Construction Design and Management Regulations 2007, has been removed. Too many pesky new homebuyers were no doubt using the legislation to report contraventions to the HSE.

Changes to the Dispute Resolution Scheme

The most shocking changes concern the so-called “Independent Dispute Resolution Scheme.”    From April 2017, a claim cannot be brought until 56 days has passed since first raising it with the housebuilder and no later than 12 months after the housebuilder’s final response. Previously homebuyers had just three months to do this. These changes bring the Code in line with the timeframes set out in the Alternative Dispute Resolution Directive.

The award for “Inconvenience” can no longer be claimed by homebuyers! Considering that in 34 of the 57 successful cases in 2016, the £250 maximum payment was all they were awarded, this is certainly a retrograde step, designed to reduce the payments housebuilders are required to make. The very inconvenience of making a claim using the CCHB is enough on its own to justify the payment. However the good news is from 1st July 2017 the maximum for inconvenience is to be doubled to £500, in line with current best practice in other IDRS. The bad news is any “awards will be made by the adjudicator at their own discretion and consideration and where a breach of the Code has been identified.” Worse, a buyer cannot receive an award for “emotional upset and stress, as awards are to be judged as a matter of fact and on the resulting financial loss caused.” Strangely 4.6 of the guidance states that “home buyers may not receive an award for inconvenience alone” but the case summaries would indicate the opposite!

Finally the onus is now on homebuyers to correctly identify which Code requirement has been breached when making an application for dispute resolution, apparently “to avoid generalised complaints which may have little or no specific relevance to the Code.”

Once the homebuyer accepts an award decision, in writing, the housebuilder must pay the award in full, within 20 working days of the adjudicator’s notification.

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Reward for failure as ex Bovis CEO David Ritchie stands to receive nearly £2m pay off

Ex Bovis CEO David RitchieRegardless 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.

Laughably, Ritchie who formally left Bovis on 28 February, will even receive a £55,000 bonus next month as part of last year’s scheme which “may be subject to clawback for a period of two years”. Ritchie will also have continued use of his company car as well as medical insurance and life cover until 8 January 2018. Unbelievably, if this wasn’t already extremely generous for an individual that presided over a performance that has brought his company to the brink of being taken over by a rival, Bovis are even paying “a contribution in respect of legal costs and a further contribution towards outplacement counselling.”
(which apparently helps displaced employees manage the transition from one job to another!) Not that Ritchie needs to find paid employment anytime soon!

Bovis FlagRitchie, who became Bovis Group chief executive in July 2008, is also in line to reap around £462,850 (52,463 shares) based on Bovis’ current share price (882p) from a long-term incentive plan that vested on 25 February 2016.

Ritchie will also benefit from 50,598 shares worth another £446,400 that became exercisable last month, subject to performance conditions being met. He is also be in line for a further 27,256 shares (£240,466) on 19 August 2017 and a maximum of 13,300 shares worth £117,339 from 24 February 2018, again if certain performance conditions are met.

The details of Ritchie’s payoff being disclosed on Bovis’ corporate website.

It is to be hoped that investors who will be given a vote on Bovis’ remuneration report at its annual meeting in May will voice their displeasure at the payoff although the LTIP was approved by shareholders in 2014.

Critics have accused Bovis of paying a ‘reward for failure’.

Oliver Parry, head of corporate governance policy at bosses’ business group the Institute of Directors, told the Daily Mail:
“This doesn’t look good and it doesn’t do the reputation of British business any good.” He said: “Investors deserve to understand what senior executives are being paid at the point of stepping down.”   A spokesman for Bovis told the Daily Mail that the company had made a “prompt and full disclosure.”

Stefan Stern, director of the High Pay Centre, told the Daily Mail:
“This is a reward for failure. This sort of pay-off reflects the way in which executive pay is trapped in a world of its own. No one else would expect to receive this sort of payment after having underperformed in a job.”

The row over Ritchie’s pay adds to the mounting backlash over excess in the boardroom. Given the circumstances and the amount involved it is to be hoped that Ritchie (47) will do the decent thing and make sizable donations to homeless charities such as Shelter and perhaps donate his time providing accountancy services ‘pro-bono’ for charities.

Meanwhile yesterday, 58% of shareholders of house builder Crest Nicholson voted against the company’s remuneration report at the annual general meeting, revolting over executive pay as the company slashed profit targets that determine performance-based bonuses for its directors.

Shareholders were vented their anger at a pay policy that will enable chief executive Stephen Stone to more easily receive a £811,737 bonus on top of a basic salary of £541,158. A total of £1.35m which  would take a site manager 27 years to earn.  Crest’s chief operating officer Patrick Bergin could be on track to trouser an extra £562,500, adding to his £375,000 salary.

The company’s remuneration report outlined plans to cut the target for pre-tax profit growth for the second year running, down from 16%-20% a year earlier to 5%-8% for the 2017-2019 period, citing challenging trading conditions. It was set at 18%-22% in 2015.

While the vote against the pay proposals was not binding, it indicates growing discontent at executive pay and dissatisfaction among investors.

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No Problem With New Home Quality Says HBF Stewart Baseley

Stewart Baseley, Executive Chairman of HBF interview on BBC Radio 4 Today – Saturday 11 February

Stewart Baseley HBFTrue to form the Home Builder’s Federation [HBF] the industry’s PR and lobby group, conducts a perfect whitewash on the facts as their executive chairman Stewart Baseley trots out a well-used, well-rehearsed HBF rhetoric. The two main points the industry is keen to focus on at the moment:
“promoting awareness of increases in output and rebut negative claims on build quality” are well covered. Mission accomplished! Move along there is nothing to see. Money well-spent? The HBF was funded mostly by its house builder members to the tune of £3,037,449 in the year to 31 December 2015.

Questions to Stewart Baseley, Executive Chairman of HBF
Do you accept there is a problem?
“No I don’t accept there is a problem although clearly there are in some cases that you have highlighted some of those on your report and I totally accept that anybody that’s in a situation where they have got a problem, it’s very serious for them.”

“No problem – some cases”
Fact: As Stewart Baseley knows, the NHBC paid out £90million in warranty claims for remedial works to fix serious defects in 11,000 new homes (an average of £8,181 each) in the 12 months to 31 March 2016. That equates nearly 9% of the 124,720 new homes built in the same period. In the previous year, the NHBC spent £86million on remedial works including £23million on foundations and £32million on superstructures to 11,000 new homes.

But the main housebuilders, satisfaction ratings have gone down
“They have gone down, well as an industry of course you have to put that into context the fact that first of all we went through the most tremendous recession seven or eight years ago and we lost getting on for half our workforce. As Oliver Colvile quite rightly says, capacity is a challenge and we have increased output over the last three years, by in excess of 50% and we are taking on and training tens of thousands of people to do that; in that context, we actually conduct what I believe is the biggest opinion poll audience research that is undertaken in the UK every year, I am not aware of anything bigger. We sent out 85,000 questionnaires in the last survey year to customers of new homes of all the builders that have been mentioned, we get about a 56% response rate we have about 45,000 returns, which is pretty impressive in terms of the sample size compared to most surveys, and around 85% of the customers of all those homes would recommend their builder to a friend. Clearly there are 15% who wouldn’t and there are a variety of reasons for that and I don’t want to suggest in any way that those reasons are not important and vital to the people that have got those challenges.”

“We have increased output by 50% in the last three years.”
Fact: In the year to 30 Sept 2013, 108,270 new homes were completed. The latest official government figures to 30 September 2016 show 141,690 new homes completed a rise of 31%! Furthermore the number of new homes being built is still 23% lower than the peak in the year to 30 March 2007. Surely Stewart Baseley is aware of the official statistics?

New Home Customer Satisfaction Survey
Yes satisfaction scores, in even this industry’s own manipulated survey (with some buyers being given £250 John Lewis vouchers for favourable responses!) have indeed gone down to 85%. It was good that Stewart Baseley acknowledged this. But of a total of 135,860 homes built in the last HBF survey year, 80,582 surveys were sent out by the NHBC and just 56%, 45,342 were returned representing just 54% of the homes sold privately.  Furthermore, not all survey responses are ‘validated’. Surveys returned late (not within 7 weeks of the date of the letter) are not counted as are those that are “not filled in correctly.” I would suggest if the responses of these surveys were favourable to the industry, they are used in the results!

The HBF state in their Annual Report:
“The Customer Satisfaction Survey and star rating scheme has played a key part in measuring industry performance and providing data to rebut negativity. To ensure the survey is seen to be as robust as possible, HBF and NHBC will be launching a review of the scheme.”
In other words, people like me can see through the hype and are (along with the APPG Inquiry) calling for a survey that is completely independent of the industry.

Well Stewart Baseley has certainly used the “data” to try and “rebut negativity”. By way of comparison, the John Lewis’ customer satisfaction survey score in 2016 was 84.9% and Amazon were top with 86.6%, both are streets ahead of anything the housebuilding industry does!

It is true the industry “lost” a large proportion of the workforce, not forgetting this was something companies within the industry chose to do at the time!

The level of dissatisfaction of those buying new homes is at its highest level since 2009 according to your national new homes survey, are you saying that survey is wrong?
“No I am saying that’s our survey, we are talking about a drop from 90% to 85% all companies and I know the CEOs and I know the managing directors of all the companies that were mentioned in the report, plus many other companies across the country and I am absolutely convinced of one thing and that is they all get up in the morning and go to work and all their people go to work with the intention of delivering a good product to a high service across the country.“ 

”they all get up in the morning and go to work with the intention of delivering a good product to a high service across the country”
Fact:  You only have to look at Taylor Wimpey’s Loddon Park development recent press coverage especially concerning Bovis, to know this just cannot be true, otherwise surely action would have been taken long ago to address the issues. 

“Now clearly things go wrong on building sites, we are working in all weathers with all sorts of raw materials that have to be imported and clearly there are challenges and I think most customers accept that actually is not necessarily possible to always produce a perfect house. The key thing is to make sure we deliver their house on time and where they do have issues and when they do have problems making sure we address.”

“not necessarily possible to always produce a perfect house”
Fact: The housebuilding industry that Stewart Baseley is attempting to defend, cannot even produce a home that is 100% finished by the date builders say it will be. There can be no excuses for handing over a defective, poor quality and often unfinished new home. Whilst it is true a new home is exposed to ‘all weathers’, but so are new hospitals, schools office blocks etc all built to much higher standards handed over 100% compete, on time, with very few (if any) defects. It is not impossible to build a perfect new home. All that is required is care, desire and sufficient time. The industry has lowered expectations, so buyers expect to have defects and faults. You do not expect to have faults in a new car. You don’t drive it for a week and then take it back to the dealer with a list of things that need sorting out!

But that doesn’t always happen people have to go through complaints procedures etc
“Well I accept that and Oliver Colvile talks about an ombudsman and we already have procedures in place. If you have a warranty like the NHBC or Premier or LABC there is a disputes resolution service, we set up a Consumer Code for Home Builder back in 2010 that also has a disputes resolution service for areas that are not covered by the warranty provider, and I’m a great believer in transparency and I’m a great believer in people having access to services that are cheap for them to use to get quick remedies to their problems.”

“We already have procedures in place”
Fact: Dispute resolution by warranty providers, that are funded by housebuilders, to adjudicate on disputes with those very housebuilders about their reluctance to fullfil their obligations under the warranty policy!

“The NHBC Dispute Resolution Service can help with help to settle disputes over defects which relate to the NHBC standards. The NHBC standards require builders to fulfil all of their obligations under the Buildmark policy.”
The fact is house builders don’t and the NHBC has to mediate in disputes, which they find in favour of homebuyers in around 70% of disputes.

The Warranty dispute resolution cannot help with non-warranty matters, such as disputes over boundaries, planning, contractual or financial matters or if arbitration or legal proceedings against the builder have started.

“we set up a Consumer Code for Home Builder back in 2010 that also has a disputes resolution service for areas that are not covered by the warranty provider”
Fact: Unsurprisingly the HBF “sits on the Code advisory forum to ensure house builder’s interests are represented….to ensure that any changes are workable for the industry”  

The new revised Consumer Code for Home Builders comes into effect 1 April 2017. I believe the revisions to the Code are further to the detriment of the homebuyer. They have been made following decisions in cases of claims made by new homebuyers. These include the abolition of the ability to claim £250 for inconvenience, the removal of the requirement to give a copy of the Code to anyone that asks and non-provision the “home builder guidance” – so much for transparency Mr Baseley! Furthermore, in the case summaries since the Code was introduced in April 2010, there have been a total of 193 cases to June 2016. Out of these, 56% that succeeded or succeeded ‘in part’ resulted in total awards of just £221,869, just 19% of the total claimed £1,150,755.

Stewart Baseley says: “I’m a great believer in transparency”
Fact: The Customer Satisfaction Survey and builder star rating for example has no access to NHBC survey portal so buyers can see survey responses and builder scores in real time, [as house builders can] just the industry adjusted results in March. The HBF should publish all builder scores not just the Q1 star rating score. Why do they not publish the NHBC 6-month survey results? The NHBC could publish details on how many claims for each builder and how many disputes for each builder go through the resolution process.

The NHBC should publish details on the number of warranty claims for each builder and how many disputes for each builder go through their resolution process. The Consumer Code for Home Builders should not be confidential. The CCHB should publish the names of housebuilders in case summaries along with what sanctions (if any!) have been made to the housebuilder. 

Fact: The LABC and Premier Guarantee warranties are administered by MD Insurance Services. The Dispute Resolution Service Team is supported by Claim Investigation Surveyors; Premier Guarantee Surveyors is the trading name of MD Warranty Support Services Limited. The NHBC has entered into a joint venture with MD Insurance Services Limited under the name of the Consumer Code for Home Builders Limited (CCHB). The CCHB operates a code providing protection and rights to purchasers of new homes. Ian Davis, Executive Director of NHBC, is a Director of the CCHB. The NHBC paid the Code £235,000 in 2016 and £175,000 in 2015.

The use of ‘Gagging Orders’ isn’t transparency!
Fact: The NHBC and housebuilders use of ‘Non Disclosure Agreements’ also known as “gagging orders” is hardly “transparent” and used for no other reason but to conceal the extent of defects in homes built by housebuilders and the amount of compensation paid. The NHBC also use them when settling warranty claims, especially when further claims might result on particular developments such as weak mix mortar.

“We do not want to increase quantity at the expense of quality”
In order to do this, new homes would need to be being built to a certain higher quality to begin with. Does Stewart Baseley really mean that “we [his house builder members] must be careful not to build homes with even more defects as they slash them up to increase the quantity the government is asking us for?”

It’s time that Stewart Baseley, the industry (NHBC, HBF, house builders) and government came clean, admitted that there is a problem with both the poor quality of new homes being built and the poor service customers receive from indifferent house builders and implement the ten recommendations of the APPG Inquiry Report starting with setting up an independent, government-appointed, New Homes Ombudsman. Anything less is unacceptable.

I am grateful to Mary Glindon MP for asking housing minister Gavin Barwell the question on Monday 27 February 2017:
The current system is clearly inadequate
A Bovis buyer said:

“we took the decision to take Bovis to court last year – but our contract doesn’tt allow it unless NHBC resolution process has been activated and failed – it has been 7 months since we got NHBC involved and they have played us as much as Bovis – the result is always the same nothing happens.”

We are currently waiting for NHBC to start the agreed work – we had to complain to the financial services ombudsman who upheld our complaint to get some action from NHBC, but it is over 18 months since we complained to NHBC and work has still not started. Once the work has completed we will then pursue Bovis for breach of contract and compensation. We have legal expenses cover on our home insurance so can use that if needed”

A Wainhomes buyer told me:

“it is stunning how little comeback you have, the whole system is massively skewed in the developers favour and they know that and completely abuse it. NHBC is just a method by which they give some apparent credibility and peace of mind to their victims, it’s virtually worthless and also crucially means they don’t need to answer to local authority Building Control. It’s akin to fraud/organised crime, yet you have less protection than when you buy a loaf of bread.”

BBC Radio 4 Today said they asked the big companies if they wanted to take part in the programme – none of them did. But Bovis wanted to apologise and said:
“in some recent cases we haven’t met our customers’ expectations for which we apologise”

Taylor Wimpey PR statement:

“We sincerely regret that some of their customers have experienced issues with their homes at London Park and they apologised for the disruption this has caused. They say they are working with those affected customers and said they would like to re assure them that they are fully focused on completing their programme of remedial works as soon as possible.”

“We are sorry  ….    we are working with those…” blah blah blah!  In one case they have been “fully-focused” on one particular house at Loddon Park for over two and a half years!  Stewart Baseley and his builder members have their work cut out! The poor build quality of new homes cannot be dismissed like this.

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Sajid Javid’s Housing White Paper – Britain’s Broken Housing Market

“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 buildingSajid Javid the builders puppetBritain 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.

Build more homes to slow rising costs

Housing White Paper Sajid Javid statementThe whole mistaken premise of this housing white paper is to “build more homes to slow the rise in housing costs. We need to build many more houses, of the type people want to live in, in the places they want to live.”  How many times did we hear that one?  Yet it is that very demand, fuelled by ultra-low interest rates and government subsidy, that further stimulated demand, exceeding supply with the resultant increase in prices. This is what markets do. Rising housing costs are systematic of years of political economic interference and meddling. If prices are unaffordable, measures put in place that subsidise housing will only serve to enable price increases to continue. Think housing benefit, low interest rates, help to buy, quantitative easing. All of these contributed significantly to Mr Javid’s “broken housing market” and his housing white paper won’t be fixing it anytime soon.

History shows private housebuilders will never build enough new homes

What was needed was an honest admission from Mr Javid that the private market alone will not build the 250,000 new homes each year needed to meet the government’s target of one million new homes by 2020. Loosening the planning system even further and helping smaller builders will not alter the fact that out of the 270,000 homes that are approved through the planning process each year, less than half are actually built. In fact I would go further and suggest even if planning was no longer required at all, Britain would still have a housing crisis! Since the 1970’s, Britain has added on average just 160,000 new homes a year, well below the 250,000 “target”.

Thirteen years ago Dame Kate Barker, now an independent non-executive director at Taylor Wimpey, warned of the crisis to come with the first large-scale report into the shortfall of housing provision. At the time she said 245,000 homes a year would be required to keep house price inflation at 1.1%, but average house prices have risen 50% since then. The Lyons review in 2014 revealed a shortfall of 1 million homes.

Landbanking is a reality, not a myth!

Measures to ban letting fees, longer term tenancies and the ‘use it or lose it’ landbank compulsory purchase are not new ideas, they all came from Ed Miliband in 2013!  From the housing white paper:

“there is also concern that it may be in the interest of speculators and developers to snap up land for housing and then sit back for a while as prices continue to rise. We propose to encourage more active use of compulsory purchase powers to promote development on stalled sites for housing.” But it’s “under review” and “representations are welcomed.”

No wonder shares in Britain’s listed housebuilders rallied as few believe this housing white paper will make any big difference.

Housing white paper makes no mention of the quality of new homes

Most disappointingly of all, was the total absence of any measures to tackle the dire quality of the new homes that are actually being built. It is pointless having a plan to build even more new homes if new homes are soon demolished because quality standards were so poor.See no evil - hear no evil - speak no evil

MPs push for report recommendations to be implementedThe word “quality” was mentioned 42 times in the housing white paper, but only once regarding actual build-quality. This government seems content to ignore growing calls to appoint a New Homes Ombudsman  which would have powers to hold housebuilders to account and award justifiable compensation to beleaguered new homebuyers. Whilst the housing white paper did acknowledge the existence of the APPG for Excellence in the Built Environment (2016) More Homes, fewer complaints – report from the Commission of Inquiry into the quality and workmanship of new housing in England, it only said it would:

“keep requirements under review, to ensure that they remain fit for purpose and meet future needs. This includes looking at further opportunities for simplification and rationalisation while maintaining standards.”

In December last year, the housing minister Gavin Barwell said:
“The Government will be considering the recommendations in the report in developing future policy on new homes”

“More Homes, Fewer Complaints.” Retrospectively, a better, more accurate title could have been “Fewer Homes, More Complaints!

There will be more on the main points of the housing white paper such as it is, to follow. Watch this space!

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NHBC hand millions in cash-backs to housebuilders

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.”

It certainly does raise more questions about the NHBC’s independence and credibility. Many new homebuyers have been openly questioning the independence of the NHBC for years.

The NHBC’s rebate scheme hands more money back to the larger housebuilders, with payments of up to £2million a year, for those registering the most homes with the NHBC. This tie-in and lack of independent transparency cannot be helpful to either the industry, or those buying new homes. It is yet another example of a wave of scandals currently being exposed in this broken industry.

The Guardian reported that:

“A senior industry source said the annual payment to the housebuilders was a way to keep them “sweet” and ensure they remained NHBC customers. The source also said that the system is open to abuse, and there were at least two occasions since 2010 when a major housebuilder asked for an extra or increased payment which was approved by NHBC.”

There have been a raft of complaints in the national press against several housebuilders, most notably Bovis, who were exposed last month as having tried to ‘bribe’ their buyers to legally complete on unfinished homes.  This exposes a general lack of protection and an absence of any mechanism where buyers can be properly compensated, other than taking civil action in the courts.

NHBCThe NHBC new home warranty is a form of insurance policy that is supposed to cover the cost of fixing faults in new homes due to non-adherence of warranty standards or building regulations within the first 10 years. The NHBC inspect homes at key stages, last year reported that around 98.5% of key stage warranty inspections were carried out, a total of 798,000 inspections, finding 357,000 items that required builder rectification.

Concerns emerge over the independence of the biggest warranty provider

This is the first time it has been revealed that the NHBC has and is paying millions to plc house builders in what it refers to as “premium refund” payments in its financial accounts. However, it is only mentioned in the notes to the accounts (page 103) and the amount paid out has not been disclosed.

A letter seen by The Guardian from the NHBC to a housebuilder states part of the premium paid 15 years ago is eligible for a refund. It explains how the payment is calculated, being based on the number of homes registered by the housebuilder 15 years ago, the cost of claims paid on those homes and any investment return earned by the NHBC on the premiums paid. Fifteen years, allowed time for the homes to be built and for the ten-year warranty liability to expire. In addition, the NHBC also decides the size of the total pot of money that it shares with housebuilders.

The letter also says:  “The NHBC remains committed to providing as much support to the industry as we can, such as pricing new business at breakeven, whilst using the strength of our balance sheet to continue to return past profits to house builders with good claims records”

However, former NHBC chief executive Imtiaz Farookhi said in the NHBC  Annual Review 2003:  “Our operating result for the year shows a pre-tax surplus of £6.2 million, an increase of £1.0 million on last year’s £5.2 million surplus. As NHBC is a non-profit distributing company, all post-tax surplus is re-invested to further raise standards in the new house-building industry and to continue to provide consumer protection for new homebuyers. But the ‘premium refund’ system was established in the 1990s!

The Guardian said that the NHBC defended the payments but refused to confirm how much it had paid out to housebuilders or comment on the extra payments to the two housebuilders.

The NHBC responded:

“NHBC provides a market-leading warranty, which currently protects 1.6 million UK consumers. Last year we paid £90m in respect of claims in addition to providing assistance to homeowners through our resolution service, which mediates between homeowners and their builder and last year found in favour of homeowners in 70% of cases.”

“As is standard practice, we do not discuss our commercial transactions or our underwriting terms. It is common practice in the insurance industry to recognise good claims history in a number of ways such as noclaim bonuses, and this is what our premium refund system, established in the 1990s and disclosed in our accounts, is designed to achieve. The system is consistently applied and is based on clear rules and processes. As this refund recognises long-term good claims history, the rules state that builders do not need to be current NHBC customers to receive it.”

“The sum paid in refunds is a very small proportion of NHBC’s annual turnover.”

The NHBC told The Times it paid ‘only’ £4.5million in ‘premium refunds’ last year, compared to the £90 million cost of claims to rectify defective new homes under its warranty.

The non-profit NHBC could put this spare surplus money to better use

NHBCInstead of handing a “premium refund” of £4,500,000 to 13 plc housebuilders already making average pre tax profits of 20%, which totalled £3,992,000,000 last year, surely the NHBC should be using these cash surpluses which they claim are “re-invested in the improvement and development of our products and services.” and “raise the standards of new homes”?

Here are a few suggestions of how this money could have been better used:

  1. Give a £10,000 prize (tax free) to each of the 417 site managers winning a NHBC Pride in the Job Quality Award. This might encourage the other 14,600 site managers to be more quality focused!
  2. Increase the number of NHBC inspectors. At £35,000 a year the £4.5m would pay for another 129 inspectors, meaning they could make 257,240 additional inspections or spend 35% more time on sites, inspecting and more importantly, re-inspecting!
  3. Increase the salary paid to its 400 inspectors by £10,000, to attract the best professionals from within the industry, rather than the cheapest.
  4. Fund 450 trade apprentices, paying each £10,000 a year NHBC ‘scholarships’, to help address the “skills shortage”.
  5. Pay (at least) 3,000 homebuyers’ warranty claims that are rejected because the estimated cost works required is below the minimum claim value of £1,500 (in 2016). To “provide protection for MORE homebuyers”

NHBC board directors have close links to housebuilders

Two of the thirteen directors that make up the NHBC governing board have close ties to the housebuilding industry. Stewart Baseley is executive chairman of the Home Builders Federation (HBF), the industry’s trade body which says it is: “the voice of the home building industry in England and Wales. Representing member interests on a national and regional level.”  The other is Stephen Stone, chief executive of listed housebuilder Crest Nicholson. Stone replaced Greg Fitzgerald who stepped down from the NHBC board last year, and is CEO of Galliford Try trading as housebuilder Linden Homes.

The lack of independence and clear conflict of interest of these two NHBC non-executive board directors raises further concerns about the governance of NHBC and its impartiality. The HBF also has six of its representatives on the NHBC Council.

In response to another story in the Guardian an NHBC spokesperson said:

“NHBC adopts the highest principles of UK governance and all our board members are chosen for the contribution and value they can add to NHBC’s purpose. There are clear procedures in place to record declarations of interest and manage potential conflicts. NHBC’s board comprises 13 members drawn from a diverse range of sectors including the financial services sector, public service and in some cases from the housing sector.

“Those directors from the homebuilding industry are in the minority. Their presence is extremely valuable to the board as a whole as they bring current knowledge of the industry and of the issues it faces, which can help to shape and determine our business strategy. Because of that their insight and input is critical to our decision-making.

“All board appointments are notified to our regulators and some appointments require prior before the individual can take up their position.”

MPs call for the government to introduce a fully independent new homes ombudsman to adjudicate fairly on all complaints about new homes.

The Conservative MP for Plymouth Oliver Colvile, who chairs the All-Party Parliamentary Group on excellence in the Built Environment, said he had great concern about the independence of NHBC. He is calling for a fully independent new homes ombudsman to be set up by government and for homebuyers to have a mandatory right to inspect their new home before they legally complete the purchase.

Mr Colville told the Guardian: “I think what needs to happen is that the government needs to look at this seriously. This is a consumer rights issue,” he said. “Let’s put the consumer on top of the list. I want to see action on this issue.”

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Housebuilders’ Recommend A Friend Schemes

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?

Check recommend a friend expiry dates or time limits

A Ben Bailey (part of Avant group) new homebuyer told me that:
“despite having proof of her recommendation under the recommend a friend scheme and their friends also having made it clear from the outset that they had been recommended on their first visit when they reserved their property and on subsequent visits to pick flooring, tiles etc. – the sales advisor kept saying she would look into it but just before completion told them they don’t qualify for the referral fee without any explanation why!”
It transpired that the reservation was made three days beyond the expiry date of the recommend a friend offer.
 Another buyer says:
“Having done this, we tried but failed to jump through all the hoops. Amongst other things, we were told we submitted the form too late. Notwithstanding we had never been given one. My impression of the scheme is that it appears to be a con. When I questioned the issues I was almost made out to be lying about the facts and this from a company who pride themselves upon customer care.”

Buyers have to chase their house builder for their referral payments
“We received the cash (well, cheque) but did have to chase for it. Numerous phone calls to the head office over the course of 5 or 6 weeks for each promotion claim.” 

Most house builders stipulate the form has to be submitted on the first visit to the sales office at the time the friend buys the property.

Be especially wary of schemes that say “up to £2,000” for example.
Bovis Recommend a FriendAll house builder’s sales advisors are given what are known as negotiables. They are an amount of discount they can offer, which can be a reduction in price, and/or “free” optional extras such as turf rear gardens and carpets for example, without having to ask their manager. So when a buyer negotiates a £5,000 discount they won’t get the “free” turf or carpets that their neighbour got for “free” included in the full price they paid. It would be foolish to believe that the recommend a friend referral payment isn’t coming out of their negotiables budget and so the recommended friend will be actually paying the buyer’s referring them!

Read the small print!
Persimmon Homes Recommend a FriendWatch out for time restrictions and requirements such as presenting the recommend a friend voucher before any price negotiations take place.

Persimmons voucher states that: “For a limited period only”- “This voucher is to be given to the Sales Advisor before any purchase negotiations have begun.” Now you know why!

Redrow states the voucher: “must be completed and handed to the sales advisor at the time of reservation.”

A Bovis buyer posted online:
“My friend got £500 for recommending Bovis to us. The Sales team weren’t happy that we didn’t mention it straight away as they said that would have affected the deal that they were able to give us. It definitely goes against the buyer to say you were recommended by someone”

Bovis Homes optimistically included four recommend a friend referral postcards in their Welcome Packs, working out at four recommendations of £500 for each one.

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Bovis give buyers £3,000 cash incentives to move into unfinished new homes.

Bovis Homes

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.

Outraged buyers have taken to social media complaining about Bovis asking them to legally complete on unfinished homes with no driveways, windows, paths, gardens, unpainted walls and even the wrong kitchen units being installed. The Facebook Group “Bovis Homes Victims” now has over 1,000 members, as media reporters and others join to find out what buyers are saying about the company on the Closed group.

Rob Elmes, 32, told The Times he refused to accept an initial offer of £2,000 to complete on a three-bedroom £320,000 home in Worcestershire and was offered £3,000 four days later to legally complete on 23rd December. Mr Elmes refused, saying that his home was not yet finished with workmen still in the house and his drive unfinished. To compound matters, Bovis have even managed to fit the wrong kitchen!

Bovis have admitted that customers had been offered an incentive to complete before the year’s end, but claimed that no one was forced to move in before Christmas.

A spokesman from Bovis said: “Customers were clearly free to decide their preferred course of action. The Group often offers a range of incentives at sale and completion in line with industry practice.”

The firm said that all homes “were habitable”, with the required industry certification as per the Council of Mortgage Lenders’ Handbook Rules. A Bovis spokesman said: “A limited number of customers were offered an incentive to complete before the year end and all homes were habitable with the requisite CML industry certification, with a timetable for outstanding finishing works to be carried out in the New Year”

However the reality would appear to be different and members of the Bovis Victims Facebook Group were quick to add their experiences. One member who has asked not to be named, said she was initially told she was due to move to her new Bovis home in October.” She posted: “We were offered £2,000 by Bovis to complete early on 23 December and told we’d be able to move in to our home over a month later on January 27th. We decided not to take the offer due to the shaky legality and were assured this wouldn’t affect the build. We’ve just been informed our anticipated completion has now moved to 31 March”

How could these homes be regarded as “habitable”? It can hardly be substantially complete if it will take up to three further months to complete the “outstanding finishing works.”

On 23rd December, posts on the group included: “Bovis want us to complete today and move in and [sic] the end of January.” Another Bovis buyer claimed that even if they had accepted Bovis’ cash offer they were unable to legally complete because Bovis had “not completed the correct Help to Buy document.” In addition, forcing or coercing buyers to legally complete on unfinished houses is not new. One posted that they were put in a hotel for 10 days as Bovis would not wait till after Christmas back in 2013. They wanted to complete asap. Been a fight ever since”

Bovis told The Guardian: “We recognise that our customer service has to improve and the leadership of the organisation is absolutely committed to getting this right.” This came just two days after Bovis CEO David Ritchie “resigned” who admitted a “limited number” of customers were offered an incentive to complete before the end of the year, but no one was forced to move in.

Bovis Apologises

On another Bovis development, the company has finally bowed to pressure and has apologised to buyers for problems at two sites in Norfolk. A Bovis’ spokesman said:

“We are working with our customers at Costessey and Cringleford to resolve their issues and we take their complaints very seriously. We recognise that in some cases at these locations we have not provided the standard of home that we pride ourselves on, for which we apologise. We also recognise that our customer service has to improve and we are absolutely committed to getting this right and are taking actions to put in place robust procedures and practices to rectify issues such as these and prevent them from occurring again.”

My award for ‘best headline’ currently goes to The Sun with “Bovis and Butthead”

Council of Mortgage Lenders (CML) Rules

The CML website states:
“Under rules introduced in April 2003, to help eliminate the practice of builders allowing occupation before the home is completely finished, the Council for Mortgage Lenders’ (CML) initiative requires builders to obtain a completion certificate. This is issued by an independent Building Inspector, normally the NHBC, following a satisfactory final inspection of the property. The lender requires this completion certificate, along with confirmation that the new home warranty is in place, before they release the mortgage funds.  

It is common for the Final Inspection to be made 14 days before the completion date. This will give the solicitors and mortgage provider time to arrange for the funds and provide you with an opportunity to inspect your finished home.”

Could those Bovis buyers, in accepting the “incentive” payments and legally completing on an unfinished and uninhabitable new home, be innocently complicit with Bovis Homes, the solicitors and the warranty inspector in potential mortgage fraud? The homes would not have been in the condition on completion and therefore the full value, that the lenders believed. Even more, those bought using Help To Buy may have, proportionally, also defrauded the taxpayer!

The Council of Mortgage Lenders told me:
“We can’t comment specifically on these cases in relation to mortgage fraud, as I am sure you’ll understand. I think our members will be concerned about the emergence of this practice, [payments to buyers to legally complete on unfinished new homes] however – as you rightly point out, this practice shouldn’t be able to happen as the properties must be inspected and signed off as complete for habitation; the use of a cash incentive will also potentially distort the true value of the property if the valuer is unaware of it.

For clarity, the CML does not have its own ‘certification’ process in relation to new homes completion. We think this reference is probably to the CML Lenders’ Handbook, which is a set of instructions to conveyancers. In that, it stipulates that lenders require a form of new home warranty (such as an NHBC warranty) to be in place prior to completion, which the conveyancer checks as part of the conveyancing process. This requirement was introduced some years ago to prevent this very issue. It may be useful to contact warranty providers, to establish how they think this might be happening.”

Indeed it might; so I did. I asked the NHBC how it was possible for a CML final inspection certificate to be ‘signed off’ by the NHBC inspector? Especially when some of these houses were clearly far from finished requiring in one case, three months work! Another had not been decorated.

The NHBC said:
“All homes registered with NHBC are inspected at key stages of construction. This includes a pre-handover inspection, which is designed to ensure that the property is fit for occupation and that our 10-year warranty cover can be provided. Where people do experience issues with their new homes we offer protection under our warranty for 10 years, including a free Resolution service in the first two years. We would encourage homeowner (or constituents) with concerns about their new home to get in touch with us so that we can offer them our help.” 

Not exactly enlightening is it? Again, how is it that any of these homes are judged finished and “fit for occupation”? On 6th January, NHBC Chief Executive Mike Quinton quit after four years – three days ahead of David Ritchie’s “resignation” as Bovis’ CEO.

NHBC Guide to CML InitiativeUnder the CML rules introduced in April 2003, a lender will not release the mortgage funds for a new property until the buyer’s conveyancer has received confirmation, in the form of a cover note, that the property has received a satisfactory final inspection and that a full new home warranty will be in place on or before legal completion. In an excellent article (March 2010) Building.co.uk highlighted that the “A Guide to the CML Certificate” ended with a warning stating that: “If [the consultant] signs the certificate and defects are subsequently found to affect the property, it is highly likely that they will face a claim on their professional indemnity insurance some way down the line.”

You also have to question quite what, (if anything) the buyer’s solicitor entered into the CML “Disclosure of Incentives form” (Section 10) for those that chose to take the Bovis’ incentive!

HBF Buyers’ customer survey ratings

This letter breaches HBF rules 23,24 & 25.It would appear that Bovis are also manipulating the HBF Customer Satisfaction Survey. Bovis Homes, rated just three stars by its customers for the last two years, has allegedly offered John Lewis vouchers to buyers in return “for giving good feedback on the NHBC survey” Whilst not uncommon within the industry, this is clearly against the HBF Star Rating rules 21,22,24 and 25.

Barratt, Persimmon and Taylor Wimpey distance themselves from this latest scandal

Last Thursday Tom Knowles reported in The Times that the country’s biggest housebuilders were distancing themselves from the scandal, in particular Bovis’ claims that cash payments to buyers to legally complete on unfinished homes was “in line with industry practice.

The scandal has led to Oliver Colvile MP, chairman of the All Party Parliamentary Group For Excellence in the Built Environment, to call for a debate into the standard of new homes, he said: “We will try to have a debate in the House of Commons about the quality of new-build housing. We need to press the government to do more.” In July last year, Mr Colvile and a group of MPs published their Inquiry Report detailing ten recommendations, which included my suggestion that buyers or their surveyors, have a mandatory right to inspect their properties before they complete their purchase. Many Bovis new home buyers have complained they were not allowed to enter their homes until the day of completion and on doing so, discovered workmen attempting to complete the works in time.

In a statement Bovis suggested offering cash to customers to complete by a certain date was “in line with industry practice”, but the three biggest housebuilders, Barratt, Persimmon and Taylor Wimpey, said that they never make this offer. Ryan Mangold, chief financial officer of Taylor Wimpey, said: “We have never given cash incentives to get buyers to move in by a certain date.” Peter Truscott, chief executive of Galliford Try, said that while developers occasionally offered investors buying several homes, cash incentives to complete by a set date, this was not the case for individual customers. The Home Builders Federation said: “It is not common industry practice to offer cash to new home buyers to complete early.”

However, a Persimmon homebuyer posted on ‘Unhappy New Home Buyers’ Facebook Group:
I read that about this morning in The Mail. Persimmon tried this on lots of our purchasers including us in 2010, but for some reason we had put our money in a 6 month Bond and told them where to go…..needless to say we won….but our neighbours moved in with Windows missing!, Trouble is it did not do us any good because we had so many problems, and still have some, we pay out for some things ourselves, but some [sic] we live with!”

A spokesman for Bovis told The Times:
Each individual customer was approached on a case-by-case basis and, where appropriate, they were offered the opportunity to move into their homes in time for Christmas with an agreed timetable for outstanding finishing works to be carried out in the New Year. Customers were offered help in the form of payments for a range of reasons in light of the extra costs they would incur by doing so . . . Similarly, some customers were offered compensation payments as a gesture of goodwill in light of the added disruption over the festive period.”

The scandal is so serious that several MPs have said they could raise the issue in Parliament. Among them are Labour MP Melanie Onn, former Tory housing minister Mark Prisk and as mentioned earlier, APPG EBE Chairman Oliver Colville MP. However the fact of the matter is that issues such as these are not new. The APPG EBE ‘Inquiry Into the Quality of New Homes In England’ found that “as the number of homes being built increased, the quality of new homes has declined.” The Inquiry Report painted a damning picture of a broken industry, bereft of any moral compass. It said:

“The evidence points to an industry…which will at times ride rough-shod over dissatisfied buyers… House builders should be upping their game and putting consumers at the heart of the business model…For some, purchasing their dream home turns into a nightmare…Evidence suggested there is a continuing issue with poor standards of workmanship in new homes…At financial half-year and year-ends, the quality is reduced as they rush to meet targets…Housebuilder’s own quality control systems are not fit for purpose…The government must take a lead role to make sure house builders deliver a quality product and service and not just focus on numbers being built.”

Debate or no debate, it is to be hoped that the forthcoming Housing White Paper due later this month, does indeed take note of the ten recommendations of the APPG Inquiry Report and includes measures to address the ongoing quality and service shortfalls of the major housebuilders, especially by undertaking to set up an independent New Homes Ombudsman before the end of this year.

It is my opinion that the buyers’ quotations in this article, reproduced entirely as they were originally written on posts freely available on Facebook,  would be considered by a reasonable person, to be true and the opinions or experiences of these private individuals. This article is my honest opinion of the buyers’ own claims and statements that any reasonable person might also conclude. I believe this is a matter of public interest.

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Commons Debate Leasehold New Houses Scandal

“The PPI of the house building Industry”

The APPG for Leasehold and Commonhold Reform managed to secure a debate in the commons chamber on Tuesday 20th December 2016 to discuss the leasehold new houses scandal. With 53 APPG members, it was surprising that only 13 MPs and Housing Minister Gavin Barwell attended initially. I previously highlighted the scandal of leasehold new houses on 7 November 2016 entitled “The next mis-selling scandal” This phrase apparently being picked up, with the Labour MP for Ellesmere Port and Neston, Justin Madders calling the practice during the debate as “the PPI of the house building Industry”. See also Never buy a leasehold new house 28 October 2016

leasehold new houses scandal

Leasehold new houses scandal

LeaseholdAn analysis by the excellent campaign group  Leasehold Knowledge Partnership (LKP) in November 2016, revealed that 8,775 new-build leasehold houses totalling nearly £2billion were sold in England and Wales last year. In all around 45,000 new houses have been registered as leasehold. Many of these bought with help from taxpayers’ through the Help to Buy scheme. In most cases, the housebuilder sells the freehold after a couple of years to a private company, which can then demand extortionate fees from homebuyers.

The LKP say that housebuilders are collectively making an extra £300-£500 million a year from selling new homes as leasehold and then selling freeholds to third parties. The only conceivable reason is to produce an income stream, whilst not illegal, it’s not morally right. The Sunday Times recently reported that over the last two years, Berkeley Group has made a £136million profit selling ground rents that generate £153million a year. In their 2015 annual report Berkeley stated During the year, the Group sold a portfolio of ground rent assets at a gross profit of £85.1 million.” In their 2016 annual accounts, Barratt Developments declared an income of £51.6 million (£34.7 million in 2015) under “other income … which principally comprises the sale of freehold reversions, ground rents, property management income and management fees receivable from joint ventures”.

On 13 September 2015 the LKP said:

“politicians supposedly concerned with issues of leasehold should be questioning this matter. Indeed Persimmon should be under further scrutiny for holding its freeholds in offshore companies – the easier to flog off to anonymous entities and avoid the leaseholders’ right of first refusal. Jeffrey Fairburn, CEO of Persimmon, says he wants to engage with ‘stakeholders’, but is less enthusiastic to explain why he is building leasehold houses around the country”

Following pressure from MPs and the LKP Taylor Wimpey has undertaken to cease building and selling leasehold new houses from 1 January 2017. The government said it will scrutinise the enthusiastic monetisation of leasehold by other housebuilders in the New Year, including Bellway, Redrow and Persimmon, whose leasehold houses are built and offered for sale nationally.

Some housebuilders have been selling leasehold houses since 2007. Housing minister Gavin Barwell confirmed that 43% of all new build registrations in England and Wales in 2016 were leasehold.”

According to a survey by LKP of 105 leaseholders with onerous ground rents: 58% bought their properties using the solicitors recommended by the housebuilder. When asked whether the solicitors highlighted or indicated the ground rent terms, most replied “no”. All respondents claim solicitors did not inform them that the ground rent terms could affect resale values, as legal practitioners are obliged to do. 25% bought through the taxpayer-backed Help to Buy scheme.”

MP’s debate the leasehold new houses scandal

For the full Hansard transcript of the debate click

Sir Peter Bottomley comprehensively exposed the abuses and he named names. He said this “goes beyond sleaze”. A CBRE report stated that some people who are developing property with leaseholds are now selling the freehold in advance so that they escape the responsibility of offering it to the leaseholders after two years. He said: “I own some shares in Persimmon and some in Taylor Wimpey, and I might buy some shares in other builders. If necessary, I shall go to their AGMs, giving notice in advance, to ask what they will do to unwind the problems that they created in the past.”

The leasehold new houses scandal
Justin Madders
Labour MP for Ellesmere Port and Neston

“This is nothing short of a national scandal. It is the  PPI of the house building industry.

Thousands of people around the country who bought new homes in good faith are the victims of what can only be described as a racket by some of the country’s best-known developers, who between them have received millions of pounds from taxpayers to provide affordable homes and have also been the recipients of generous subsidies as a result of policies such as the Help to Buy scheme.

When people buy their home, they like to know who they are buying it from, but leaseholds are often sold on to third parties who can then vary the agreed terms of the leasehold, at which point—this is a scandal—developers claim that it is no longer anything to do with them

The prices quoted [for buying the freehold] can vary significantly for almost identical properties, suggests that the buy-out costs are calculated on nothing more than what the investors think they can get away with.

One constituent received advice from solicitors who were recommended to her by Taylor Wimpey, and she felt under some pressure to appoint them. She was advised that the lease did not impose an unduly onerous or prejudicial burden. This was for a leasehold Taylor Wimpey house with a ground rent that doubled every ten years.

It is a cynical business decision, which will in the long run damage the reputation of those involved.

It is also disappointing that the newest development in my constituency, currently being constructed by Redrow Homes, is also being sold on a leasehold basis. Redrow tells me that this fact is made known to purchasers before they reserve their property, although I note that on its website the promotion of that particular development makes no mention of that. What is particularly disappointing is that Redrow, despite my asking twice why it feels the need to sell large detached family homes on a leasehold basis, offers no justification whatsoever.”

“Does he [Housing Minister Gavin Barwell] agree that developers should be prohibited from recommending a particular solicitor to purchasers because of the clear potential for a conflict of interest and the clear failure, as we have seen here, to provide the best advice?”

“Will the Minister consider withdrawing and recouping taxpayer subsidies to any development found to be ripping off householders in this way?”

I am sure Oliver Colville will recall my presentation to the APPG Inquiry Into the Quality of New Homes, when I called for an “end state funding and government help for failing and indifferent housebuilders.” I am not sure how this funding can be retrospectively “recouped” from particular housebuilders, but Help to Buy and other schemes are no longer necessary as low-rate mortgages are now freely available. I also suggested that No housebuilder should be allowed to encourage their buyer to use any particular firm of solicitors or mortgage broker.” Now MPs can see the damage that housebuilder suggested/recommended solicitors does and how this clear conflict of interest adversely affects and disadvantages new homebuyers.

Oliver Colville said that housebuilders are selling the freeholds in advance so they do not have to be offered to new home leaseholders.

Housing Minister Gavin Barwell said that he acknowledges that many of the examples raised by MPs in the debate are not exceptions and that there are widespread problems that need addressing. He said:

“Analysis by LKP suggests that nearly 9,000 houses were built and sold last year as leasehold. Some have no shared services or estate management functions. In fact, they seem to exist only to create a reliable income stream from the ground rent, permissions to alter the property, and selling on the freehold at some point in the future. Developers can maximise their return by selling the freehold interest to the leaseholder at a higher value after they have moved in, or by selling it to a third party without informing the leaseholder. That is a critical point: if a freeholder wishes to sell a leasehold flat, the leaseholder has the right of first refusal, but that right does not extend to those in leasehold houses. The Secretary of State [Sajid Javid] and I have been looking closely at the issues raised in recent weeks and we are both absolutely determined to stamp out unfair, unjust and unacceptable abuse of the leasehold system.

We should not be under any illusions. The problem does not just concern one company; a number of our larger developers are involved in it. They would do well to remember that they are building homes for people to live in, not investment vehicles for financial institutions. Except in a very few exceptional circumstances, I cannot think of any good reason for houses to be built on a leasehold basis. If the industry does not put a stop to the practice and help existing homeowners, we will look to see what Government can do.

Both this House and the Government want to hear more from the developers about what they are going to do to put the situation right.

The motion states that the House “has considered” this issue, and I want to reassure my honourable Friend that it will be considered by the Government and that we will come back in the New Year with proposals about how to tackle it.”

Quite frankly, the housing minister should be telling the housebuilders what they must do, not asking them for their proposals to end this leasehold new houses scandal. After all, it is the lack of any law prohibiting this that has enabled the housebuilders to get away with this practice for nearly ten years, yet only now is government recognising the problem.

On 5th October 2016 Prime Minister Theresa May told the Conservative Party Conference that she was about:

“Righting Wrongs : Challenging vested interests : Taking big decisions : Doing what we believe to be right : Getting the job done : That’s the good that Government can do and that’s what I’m in this for : Standing up for the weak, standing up to the strong.”

“Standing up” to housebuilders and “righting wrongs”. Banning the sale of leasehold new houses and ending Help to Buy on 1st January 2017,  making it illegal for housebuilders to nominate, suggest, recommend or offer homebuyers cash inducements to use a preferred firm of solicitors and setting up a New Homes Ombudsman would be a good place to start Mrs May!

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Affordable home building has dipped to a 24-year low

The latest data figures from the DCLG on Affordable Housing supply April 2015 to March 2016 published yesterday, show that the number of affordable homes built in England in 2015/16 has fallen to its lowest level for 24 years. In total, just 32,110 new affordable homes were added – a 52% decline on the previous twelve months (66,600).

Affordable housing

Figures for affordable housing are split into three catagories: social rent, affordable rent and affordable home ownership/shared ownership.

The DCLG figures showed the number of new homes for ‘social rent’ fell to just 6,550 – 83% lower than the 39,500 built in 2010/11. The number of homes for private rental at ‘affordable rent’ has now fallen 41% from a peak of 40,730 in 2014/15 to 16,550 in 2015/16. The total constructed for ‘affordable home ownership’ has also dropped 21% from 15,970 to only 3,430 over the same period.Affordable housingLabour housing spokesman John Healey said:

“The figures showed the government was building the lowest number of social rented homes since records began. This all-time low results from Conservative ministers who have washed their hands of any responsibility to build the homes families on ordinary incomes need. We’ve seen six wasted years with the Tories in charge of housing. They have no long-term plan for housing and they’re doing too little to fix the housing crisis for millions of people who are just managing to cover their housing costs.”

Mr Healey also claims the government was trying to hide its “failure” classifying homes as “affordable housing” when they are available at 80% of market rent or can be being sold for as much as £450,000.

“Public concern about housing is at the highest level for 40 years. Millions of families are struggling with high housing costs.”

Affordable housing 2001 to 2016A spokesman for the DCLG explained the drop, saying:

“Delivery is normally lower in the first year of any new housing programme and so these figures are expected as part of a five-year housebuilding cycle. Building more homes is an absolute priority for this government, which is why we have doubled the housing budget to £8bn and we now have the largest affordable housing programme in 40 years. Furthermore, latest figures out this week show overall housebuilding is at its highest level in eight years and we will be publishing our White Paper shortly, setting out our plans to build more homes and more quickly.”

On average house prices have increased by 7% per year since 1980. Unsurprisingly, home ownership is now at its lowest level since 1985 at 63.5%.  So why has the government relaxed and abandoned affordable housing and social housing planning (section 106) requirements?

home ownesrhip rates 2006-2015

Councils spend £3.5bn on temporary accommodation since 2011.

Anne Baxendale, head of policy and public affairs at Shelter told the BBC:

“At a time when this country is crying out for more genuinely affordable homes, these figures are not only shocking but unacceptable. With 120,000 children set to spend Christmas homeless and in temporary accommodation and a whole generation of private renters living from one pay cheque to the next, the new government needs to get a grip on this problem once and for all.”

Meanwhile figures obtained by the BBC through the Freedom of Information Act show councils in Britain have spent more than £3.5bn on temporary accommodation for homeless families in the last five years. During that time the annual cost has risen 43%, with councils spending £851m on temporary housing in 2015 alone, which could have been used to build around 8,500 new council houses on publicly-owned land.

According to data acquired by the BBC, around 61% of the £3.5bn has been spent in London, while 85% of the increase in costs there since 2011/12.

Homeless charity Crisis said the number of people in temporary accommodation was rising at an “alarming rate” and the Local Government Association said the costs were “unsustainable”.

A spokesman for the Department for Communities and Local Government said:

“Time spent in temporary accommodation ensures people have a roof over their head and the number of households in temporary accommodation is well below the 2004 peak. This government has invested £500m to tackle homelessness – including prevention funding and £40m for councils to help rough sleepers. We are also backing Bob Blackman’s [MP] Homelessness Reduction Bill, which will also provide vital support for many more people.”

The Local Government Association said councils must be able to replace sold homes and reinvest in building more of the genuine affordable homes.

University research shows housebuilders are profiting from government policies

Research by Sheffield Hallam University Centre for Regional and Economic Social Research, analysed the UK’s nine largest housebuilders between 2010 and 2015.  It found that housebuilders are growing profits from the housing shortages across the country.

The nine largest housebuilders, responsible for almost half of all new housing starts in the country, increased their housing output by 33% in the period from 2012 to 2015. In the same period their revenues grew 76%, with profit before tax rising by 200%. The research also showed that accounting end of year profits for the five largest housebuilder increased from £372 million in 2010 to over £2 billion by the end of 2015 – an increase of over 480%.

The research report states:

“In 2015, the biggest five housebuilders returned 43 per cent of their annual profits to shareholders, an amount totalling £936m. This raises questions about the potential volume of new supply that could have been provided through reinvestment of at least some of this money.”

On Help to Buy

“Help to Buy has so far generated a 14 per cent increase in supply, which is well short of the fundamental uplift in output that is required. The risk with demand-side initiatives is that they end up simply subsidising households to afford high prices, and for a temporary period.”

“there is scope for the government to do much more to increase investment by local authorities, housing associations and other non-profit bodies for housebuilding. It needs the political will to do it.”

A spokesman for the research team also said:

“Reliance on the private sector alone is not enough: unless there is also a major upscaling in housebuilding by local authorities, housing associations and other non-profit organisations, the crisis in housing supply will continue”

Housing minister Gavin Barwell commented:

“We know there is more to do to ensure the housing market works for everyone and not just the privileged few, and we will be setting out further details in our Housing White Paper shortly.”

A few suggestions for the White Paper:
  • Change government policy from subsidising and promoting home ownership and start building 100,000 council houses a year fro people to rent.
  • Impose a 50% windfall tax on land value planning uplift.
  • Compulsory purchase at pre planning values (less planning costs) any land not started within two years of planning approval.
  • Use this revenue to build new councils houses on confiscated land.
  • Require housebuilders to build 15% affordable housing and 25% social rent out of their total output each year.
  • End Help to Buy and divert the funding to local authorities to build council houses.
  • Cancel the “right to buy” for rented social housing and council houses.
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Leasehold new houses – the next mis-selling scandal?

Caught in a trap – Leasehold new houses

Given the information, no new homebuyer would ever choose to buy a house with a leasehold title. Perhaps this is why some housebuilders hide this extremely important information from new homebuyers. Even if they do think to ask about the property title, it’s no good saying “People are scared of change because it’s something new. But it’s virtually freehold.” As a Persimmon sales advisor told a reporter from The Guardian.

leasehold new houses

Is it Freehold? New homebuyers are getting caught out by newly-built leasehold houses.

Justin Madders MP for Ellesmere Port and Neston, is calling for a ban on leasehold new houses:

“It is clear this system is being abused to drive huge profits at ordinary ­homeowners’ expense. There is no need for there to be leasehold properties, particularly those on an estate where the properties are mainly detached houses.

“They need to be banned – it may be a convenient way for developers to get extra profit from their building work, but once they get in the hands of these private equity companies the profit motive overrides any considerations that there are real people living in their homes, who are being asked to stump up eye-watering sums.”

As Patrick Collinson reported in The Guardian on Saturday 29 October 2016, a new house built by Taylor Wimpey in Ellesmere Port was sold for £155,000 on a 999-year lease in 2009. Seven years later, the owner was quoted £32,000 to buy the freehold from E&J estates who had bought the freeholds from Taylor Wimpey. Another buyer was quoted up to £40,000 by E&J estates for the freehold of their 2011, 4-bedroom £122,000 house and despite a long lease, another new homebuyer in Manchester is was forced to pay £38,000 to buy the freehold on their recently built home.

Escalating ground rent is another issue. Taylor Wimpey set the ground rent at £295 a year on the Ellesmere Port development, with the contract stating that ground rent will double every ten years!

The Guardian reports:

“Like thousands of others in England and Wales, buyers have been trapped by a controversial trend among housebuilders to sell homes as leasehold when they previously would have been freehold. The buyers are given reassuringly long 999-year leases – but later find that buying the freehold is prohibitively expensive.”

Government figures show that around 6,000 new houses were sold as leasehold last year. Previously, houses on new-build developments were sold as freehold, but leasehold new houses are becoming more common with the likes of Persimmon, Taylor Wimpey and Bellway selling houses as leasehold on their developments. Indeed a third of new houses sold by Persimmon are leasehold, around 4,372 in 2015, nearly three-quarters of all new leasehold houses registered in 2015.

Justin Madders, MP for Ellesmere Port and Neston, whose constituency covers the Taylor Wimpey development says the situation is: “morally indefensible”. 

“I have had a number of constituents contact me, saying they were aware at the time of purchase that the freehold was extra. However, they didn’t know the original developer sold the leaseholds to private investors who have ruthlessly exploited the law to line their own pockets.

“The prices they have been quoted to buy the freehold have rocketed beyond any reasonable sum people can afford. I have found constituents are unable to afford the fees being quoted and there are extortionate charges associated with obtaining permission to alter the property. Just over £2,500 was quoted for permission just to build an extension.”

The Guardian said it is easy for buyers to miss the fact that the new property is leasehold. For example, at Persimmon’s Agusta Park development in Yeovil, Somerset comprising of 2, 3 and 4-bedroom homes, all are being sold leasehold. Yet The Guardian reported there was no mention that the houses are leasehold on either Persimmon’s website, or in the site brochure.

Asking about the lease, Guardian reporters were told it was 999 years and the ground rent was £150, then £190, and eventually that the ground rent would go up every 10 years using a formula linked to the RPI. The Persimmon sales advisor said:

“It’s a 1,000-year lease. If she lives to 100 there will still be another 900 years to go. It’s virtually freehold. Flats are always sold as leasehold. Lots of [house] developments are going this way now. People are scared of change because it’s something new. But it’s virtually freehold.”

And regarding buying the freehold?

“It’s not available at the outset, but can be bought within two years. I’ve no idea. We don’t quote on the price of the freehold.”

Potential buyers allege they are not told about the leasehold until late in the process.

One Guardian Money reader said: “We were about to purchase a new house when we noticed that part of the communal charge for the upkeep of open spaces was for ground rent.” alleging that at no stage was the word leasehold used by the salespeople, nor was it in any of the documentation they signed. The reader said they pulled out of the purchase of the Persimmon home after seeing stories of housebuilders charging large fees just to give permission to make alterations, such as installing a conservatory and tens of thousands of pounds to purchase the freehold.

Developers were asked why they are selling houses as leasehold?

Persimmon told the Guardian:

“Persimmon sells a mixture of both leasehold and ­freehold properties. As Persimmon has acquired other ­companies over the decades, it has inherited the freehold reversions of leasehold properties sold by those businesses. There are around three million leaseholders in Britain. All Persimmon leasehold houses carry an extremely long ­999-year lease and customers are informed at ­purchase what type of property they are buying.”

Persimmon refused to state the typical ground rents charged, how much the company makes from selling freeholds, or the fees charged to leaseholders for approval for alterations or things like building a conservatory.

Taylor Wimpey ­confirmed it had sold freeholds to E&J Estates, but did not disclose the price, and would not comment on the £32,000 E&J Estates wanted for a freehold. They told the Guardian:

“At Taylor Wimpey the vast majority of our houses are sold on a freehold basis. However, in a small number of developments, ­predominantly in regions of the ­country where it is common practice in the market, we sell houses on a leasehold basis. Throughout any sale process, customers are fully informed of the ownership structure of the home. If a customer is interested in such a property, the sales team advises them whether the property is being sold on a leasehold basis.”

­Issues concerning leasehold properties will be top of the agenda for the all-party parliamentary group on leasehold and commonhold next month. Chaired by Labour MP Jim Fitzpatrick and Tory Sir Peter ­Bottomley, has attracted 43 MPs and lords.

Sebastian O’Kelly of the Leasehold Knowledge Partnership – a support group set up to protect and campaign on behalf of ordinary leaseholders said:

“It is disgraceful that plc ­housebuilders are building leasehold houses that ­ordinarily – and until recently – would have had freehold title. This is an ­erosion of the wealth of ordinary people at the expense of the rich.

Young people, after years of paying rent, finally buy a home and then find they are still, in fact, tenants – which is what a leaseholder is – with all the ­vulnerability that that implies.

The housebuilders are evasive over this issue and it beggars belief that the ­outrageous ground rent multiples come from household-name builders. There is no attempt to justify the adoption of leasehold tenure for these houses, which are not complex communal sites such as blocks of flats.”

 

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