Yet more funding for housebuilders! Whatever became of austerity, “there’s no money left” and “balancing the budget by 2020”? So is the country now awash with spare cash? Of course not. According to the national debt clock, the UK is borrowing another £5,170 per SECOND or £1.86m an hour! The National debt is currently £1,762,340,000,000 (1.76trn), this equates to £28,291 for every person living in the UK or £48,600 for each UK taxpayer! So I find it totally incomprehensible that another £5bn is being added, to further and unnecessarily subsidise private housebuilding under the guise of increasing the number of new homes built.We have already had the ‘The Osborne Stupidity’ – ‘Help to Buy’ fuelling house prices and housebuilders’ record profits. Now we have the ‘The May Lunacy’ ‘Help to Build’, yet more funding for housebuilders. Last week the Theresa May’s government announced two major housing initiatives; a £3bn Home Building Fund – £2bn long term funding for infrastructure and £1bn short term loan funding aimed towards enabling smaller developers enter the market. As is often the case with government announcements of supposedly “new funds” £1.2bn of the £3bn was previously announced as the Large Sites Infrastructure Fund in 2015. In addition, a new £2bn “Accelerated Construction Programme” aiming at getting new homes built more quickly on public land.
This was a question I was asked at the APPG last November. Surely, if there was a real problem with the quality of new homes, why is it that so few actually complain and go public with their experiences? It is a question I often ask myself, knowing as I do that 93% of new homebuyers will report problems to their housebuilder very soon after being handed the keys. Imagine the public outcry if 93% of new cars went back to the dealer for faults to be fixed after a few days or weeks! Indeed, if new homes were cars they wouldn’t be fit to go on the roads! So why is it that out of a potential 129,300 people that bought a new home in the year to 30 June 2016 and reported problems to the housebuilder, most chose to stay silent? Even more astounding are 86% that the HBF claim “would recommend their housebuilder to a friend” – although the HBF 8-week customer survey results appear to be being manipulated by the big housebuilders.
Adversely affect the future value – more difficult to sell
Lord Richard Best said: “I think another factor could be that people don’t want to moan about their new home having invested such a large amount of money, and knowing that one day they’re going to sell it to. It’s counterintuitive to rubbish something that you’re going to sell later, which you’ve invested so heavily in.”
It has been nearly three months since the APPG Inquiry Report Into the Quality of New Homes was published along with its recommendations on 13 July 2016.
After some not inconsiderable enquiring to the APPG MP’s, I was contacted by Helen Hayes (pictured below) last week who has kindly updated me and confirmed the current situation:
“The APPG’s inquiry report has now been published and has been presented to the government for a response. Oliver Colvile has met with the Prime Minister to discuss it, and I understand that the initial response was quite positive.
The APPG awaits the government’s formal response, and when Parliament resumes sitting we will seek to chase this if it is not provided in a timely manner. It is not within the power of an APPG to implement the recommendations of the report, as this is a matter for the government, and the setting up of a new Ombudsman would require legislation which it would be for the government to introduce – even if the government takes up this recommendation, which I hope they will, this would take some time to progress through Parliament.
All members of the APPG are fully signed up to the recommendations of the report and will continue to work towards their implementation through the routes that are available to us as back bench MPs and members of the APPG.
After repeatedly failing to meet government housebuilding targets, the Home Builders Federation (HBF) now claim, quite amazingly, that the government’s official figures for new home completions are wrong and understate the number of new homes being built by its membership.
So just as the government looks to blame the large housebuilders for its own failed pledge to build 200,000 new homes a year, – “1 million new homes by 2020” – which was clearly never going to happen, the housebuilders’ barking Rottweiler [HBF], growls its disapproval by stating in every news outlet and construction publication within the influence of its PR machine, some nonsense about not all new home completions are being “counted” in both the official quarterly and annual figures published by the DCLG.
The HBF claims that up to 30,000 new home completions are not counted and included in the government’s official figures. The HBF blame “poor returns from local authorities and a flawed methodology” for the failing to record every new home built.
Who is the government kidding?
On 21 September 2015, the then housing minister Brandon Lewis, stated on behalf of the government on BBC that it intends to build “a million new homes by 2020”. ie by the end of this parliament. A million new homes in a shade less than 5 years, around 200,000 a year. Big statement, big promise. Everyone will remember George Osborne’s “we are the builders” being seen wherever he could, wearing a hard hat and a hi-vis jacket. So how is this going?Well, recently released figures from the Department of Local Government and Communities (DCLG) show that just 139,030 new homes were built in the year to 30 June 2016. Whilst up 6% on the previous 12 months (131,500) and 29% higher than the low recorded to March 2013 (107,820), this latest total is still 18% below the peak in the quarter to March 2007 (168,640).
Since 2006, Part L of the Building Regulations – The Conservation of Fuel and Power in England and Wales – has required mandatory air leakage testing of new buildings including homes. These regulations were further revised in 2010. But this does not mean every new home will be subject to an air leakage test to comply even under the latest 2010 Part L.
What is air leakage testing?
Air leakage testing basically checks that a new home is air tight and will not let in draughts or provide a route for heat to escape through gaps in the structure. After sealing up all required vents to windows and extractors, air is then drawn out of the home via a large fan in an external doorway, with the pressure monitored for a set period of time to produce a measurement of the amount of air that leaks back into the home being tested.
So you would think that since 2010, all new homes would be relatively air tight, free of draughts and cheap to heat as a result?
It would appear that the house builders’ share price rise since the financial crash of 2008, has been built on the same dodgy foundations as some of their houses are. A business model built on selling sub-standard houses to sub-prime borrowers.
This was illustrated during the first two days of trading following the UK’s historic vote leave the EU. Worst hit in the initial market panic were Banks and shares in the listed house builders. Despite this, some ever-greedy directors used the Friday crash to buy more shares on the cheap, known as “catching a falling knife” and promptly lost another 15%! Taylor Wimpey Non-Exec director Dame Kate Barker, 59, who produced the Barker Review on housing supply in 2004 – which resulted in the industry setting up the HBF Customer Satisfaction Survey two years later, but has failed to have any impact on improving either supply or quality – bought 20,000 Taylor Wimpey shares for £26,953 but the shares closed down 15% leaving her with a paper loss of £3,800.
Earlier today, BBC Radio 4 You and Yours interviewed Oliver Colvile MP, chairman of the All Party Parliamentary Group Inquiry into the Quality of New Build Housing in England, looking into measures that would improve the quality of new-builds and how to give greater protection to new homebuyers.
Oliver Colvile MP told the programme:
“I am afraid I’ve had an awful lot of constituents who have come to see me and talk to me about how they don’t feel they have got the product which they thought they had actually bought.”
“The consumer wants to see, they want to actually see something that is going to deliver a quick and easy resolution as far as their contractual decisions have been made. After all, when we go and buy a new home it normally is the most expensive thing biggest investment which we make in the whole of our lives, for them [HBF] to be complacent I have to say, to say its 85% [satisfied with their homes] well what about the 15% then who have actually had a fairly a bad deal out of it. The other thing as well is that I don’t think the house builders generally understand that they’re dealings with the person who is buying it [the new home] isn’t necessarily always particularly brilliant. The consumer feels that actually somewhat concerned that they are actually banging their head against a brick wall, by trying to get the builders to take some notice of all of this.”
In his speech at the JCT Parliamentary Reception on 17 May 2016, APPG EBE chair Oliver Colvile MP highlighted the main findings of the Inquiry and some of the main recommendations, in particular that a New Homes Ombudsman “should be set up.” stating “this would mediate disputes between consumers and their builders or warranty providers to offer a quick resolution.”
It is to be hoped that this and all the recommendations in the Inquiry Report, due for publication at the beginning of June 2016, will be taken forward and fully implemented by Government at the earliest possible opportunity.
An Ombudsman is usually appointed by the government or by parliament, but with a significant degree of independence. They are charged with representing the interests of the public investigating and addressing complaints against public bodies, private companies, organisations and sometimes entire industries. An ombudsman should be a totally independent body capable of investigating complaints of malpractice, maladministration or a violation of rights, both fairly and impartially.
The waiting is nearly over. Its official! The New Home Ombudsman is coming! A culmination of two years’ campaigning and ten years dedicated work highlighting the plight of UK new homebuyers.
I spoke. They listened!
The APPG Inquiry report is being finalised and is due for publication in “at the beginning of June 2016.”
On Tuesday 17 May 2016, chair Oliver Colvile MP made a speech at the JCT Parliamentary Reception highlighting the findings and the main recommendations.
He said that he, and “many of his Parliamentary colleagues across the country have had new homebuyers coming to their MP’s surgeries to complain about the way their new home was built. Although the report hasn’t been finalised, I can confirm that the Inquiry Committee has agreed on a number of recommendations and I would like to share a few of those with you”
- A New Homes Ombudsman should be set up. This would mediate disputes between consumers and their builders or warranty providers to offer a quick resolution procedure.
- Standardised house building sales contracts should be enforced, meaning uncertainty surrounding bespoke builders’ contracts would be removed.
- There should be a mandatory right for buyers to inspect and, should they wish, carry out a full survey prior to financial completion. More details of this particular point will be announced in the final report.
- To improve transparency, builders should be required to provide homebuyers with a comprehensive information pack. This would include plain English explanations so that homebuyers can understand exactly what they are buying.”