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?
Last 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 parliamentary petitions system has come under criticism lately when it was revealed that fewer than ten of the thousands of petition appeals launched by the public had led to a change of policy.As at 3 March 2017, more than 28,400 applications were submitted to the Commons petitions committee in the past 19 months.
The Petitions Committee review all petitions published. The website says they “select petitions of interest to find out more about the issues raised” and “have the power to press for action from government or Parliament.”
“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 building. Britain 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.
The BBC Radio 4 ‘You and Yours’ programme on 26 October 2016, was a great opportunity to further promote the setting up of a government-appointed New Homes Ombudsman and the implementation of the other nine APPG report recommendations. This is necessary because as the APPG Inquiry discovered, both housebuilders and warranty providers are failing new homebuyers despite a record £81million being spent on claims under the NHBC warranty to April 2015. It was disappointing that this Petition to Government was not mentioned.
The recent repeat of a BBC TV documentary, “Inside the Commons” – showed how government works and without a parliamentary debate, the APPG recommendations are very unlikely to be implemented anytime soon. Individual MPs, even if they are successful in the Private Member’s Bill ballot, rarely see their bill become law.
This You and Yours broadcast on BBC Radio 4 featured the ubiquitous new home buying “victim” selected to tell their ‘tale of woe’ with possible practical solutions to the widespread problems the industry is causing, overlooked or touched on very briefly. The programme gave housebuilder David Wilson Homes the opportunity to issue the usual insincere housebuilder statement:- “rare isolated incidence – we are truly sorry – working with the homeowner to remedy as soon as possible”
The first Annual Report by the Consumer Code for Home Builders since April 2014, was finally published this month.
In May 2014, I asked the question, Is the Consumer Code for Home Builders (CCHB) fit for purpose? In March this year I wrote that the Consumer Code for Home Builders is failing new homebuyers. This voluntary code was launched in April 2010 and has been inadequate and failing new homebuyers ever since.
In July, a report published by the APPG Inquiry Into Quality of New Homes found that:
- “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.”
APPG Inquiry recognises a government-appointed New Homes Ombudsman should be set up.
The APPG Inquiry “Key recommendation” is the setting up of a government-appointed New Homes Ombudsman. It said that the Ombudsman: “would need to be completely independent and replace the dispute resolution service offered as part of the Consumer Code for Home Builders.”
With greater protection for those that buy them!
The only way the housebuilding industry will change for the better, is if enough people sign this petition. This Government is pre occupied with its blinkered approach to increasing quantity of new homes being built, throwing billions of taxpayer’s money at housebuilders in the process. Just last week another £5bn was earmarked for an industry that cares so little for its own customers and the quality of the product they sell.
An all party group of MPs had an Inquiry last year Into the Quality of New Homes. The Inquiry Report made ten recommendations, including the number one “key recommendation” the setting up of a New Homes Ombudsman. All of the recommendation have the potential to not only force housebuilders to improve the quality of the homes they build, but also give those that buy new homes better protection via access to a New Homes Ombudsman.We have been here before with the Barker Review of 2004, Office of Fair Trading Market Study of Home Building in the UK October 2008, and now more recently the APPG Inquiry 2016. Yet surprisingly, there has not been any legislation to force this failing industry to improve.
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.
The All Party Parliamentary Group Inquiry Into the Quality of New Homes In England has made ten recommendations and says house builders should be “upping their game and putting consumers at the heart of the business model. Alongside this, Government should use its influence to promote quality at every opportunity.” The cross party committee of MPs and construction experts called on the Government [DCLG] to set up a New Homes Ombudsman to mediate in disputes between homebuyers and housebuilders. This is the number one “key recommendation” of 10 recommendations setting out measures to improve the quality of workmanship in new homes and provide consumers with easier and cheaper forms of redress, to get defects and problems fixed.
APPG Inquiry Report Recommendations:
Recommendation 1: DCLG should initiate steps to set up a New Homes Ombudsman.
“The role would include mediating disputes between consumers and their builders or warranty providers to offer a quick resolution procedure paid for by a housebuilders’ levy. We see this is as the key recommendation to provide more effective consumer redress, if things go wrong, and a good way of applying pressure on housebuilders and warranty providers to deliver a better quality service. Our view is that the new service should be funded by a levy on the sector, but it would need to be completely independent and replace the dispute resolution service offered as part of the Consumer Code for Home Builders. Our recommendation picks up on one made by the Office of Fair Trading, in its 2008 market study into the house building industry, which suggested that, if the industry failed to make satisfactory progress, it would recommend further intervention in the form of a statutory redress mechanism for new homebuyers funded by a levy on the industry.
Although funded by the construction industry [housebuilders] it should be a public body not under the industry’s control. It should provide a cheap, quick and effective system of redress and have power to enforce standards and award compensation. This would put pressure on housebuilders to up their game in the first place and spur them on to improve workmanship and increase levels of service.”