Tag Archives: snagging

How the house builders could improve the quality of new homes

The standard and quality of new homes is not improving. Despite surveys and reviews, time and time again, house builders have demonstrated that they only care about profit and numbers. This was recently confirmed to a Taylor Wimpey new home owner last month, when the company’s regional director, visiting because the new home had over 400 faults including potentially dangerous electrical  work, said: “we’re here to deliver profit for our shareholders”   adding:  “we don’t build perfect houses”

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Remedial works cost builders money!

Indeed, many disappointed new homebuyers believe they should at least be forced to try to improve the quality of the homes they build!  The reality is, it wouldn’t be too difficult to do.  If there was a will, there is a way!  It certainly would be unlikely to reduce the house builders’ profitability because it always costs less to do the work right first time, than it does to go back over and over again.  All a successful business needs is great a product and satisfied customers. The house builders have neither, making their profit predominantly as a result of planning gain, land speculation and on the back of government initiatives such as New Buy and the Help to Buy subsidy!

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Beware of buying a new home rushed for the house builder’s year-end figures

In the days of British Leyland, it was often said that a car with several faults was a “Friday Car” – meaning it had been built on a Friday, with workers not being quite as attentive to quality and what they were doing as perhaps they should have been. Fortunately, the car industry has come a long way since those days with both the quality and reliability of new cars much improved. 

However the same cannot be said of the house building industry. New homes are still being built with as many, if not more faults and defects than they were 20 years ago. The situation is even worse in an “end-of-year figures” new home. These are homes that are sold and the construction process rushed to enable legal completions to take place so as many homes as possible can included in the house builder’s financial year-end report to the City and shareholders. Homes built in the run up to the end-of-year date are always of inferior quality, even worse than the national house builders usually build, with a lower overall standard of finish, incomplete works and forced drying out causing excessive cracking to finishes. 

Rush job!  Will it be completed in time for you to move in 4 weeks?

Rush job! Will it be completed in time for you to move in 4 weeks?

Each regional office will report how many homes they have built and sold, within the company’s financial year. The overall total is then recorded in the firm’s final annual financial accounts. Each region is given a target number of completions to achieve each year and everything (and anything) is done to ensure the required figure is reached. In the past it has been known that buyers were handed large cheques by directors as a “sweetener” to persuade them to legally complete on their new home – even though it was nowhere near finished or even ready for occupation. It was not unheard of for buyers to move in with their electricity and heating powered by a temporary generator or their water supply provided from a hose connected to a standpipe in the footpath! Another ruse sometimes used when a part-exchange is involved, was to let the buyer remain in their old home whilst their new was being finished.  Quite frankly this practice was nothing short of fraud. 

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Advantages and disadvantages of buying a show home

For many, buying the show home may seem a great idea. But anyone considering buying an ex show home should consider the many disadvantages as well as the perceived advantages.

Bovis Sales OfficeThe first thing to be wary of is to not getting taken in by the furnishings and the techniques the housebuilder has used. In recent times, many people have become obsessed with lifestyles and developers are using this to their advantage so potential show home buyers should be sceptical when viewing. 

The most critical issue to buyers is nearly always price. A show home can, and usually does cost, more than the same house type on the development, This is because all the little extras that are in the show home are added to the price. Remember house builders never give bargains! The price will have been very carefully considered to get the maximum amount that can be realistically achieved, in the short time the sales staff may be on the development. You should be prepared to negotiate with the builder, as you will have not been able to choose your kitchen and other options and the home will be used to some extent. 

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What are the house builder CEOs doing about the poor quality of their new homes

Read any of the largest house builders year-end reports and it is all about profit, earnings per share, return on capital employed, sales, turnover, number of homes built, the average selling price and land bank values – all financial matters. Forecasts for the coming year are about the potential to increase these numbers. So it should be, after all they are commercial businesses and these numbers matter to investors, shareholders and the banks lending them money.

But what about announcements regarding improving quality and customer satisfaction? Surely these matter to shareholders too, as any successful business must have happy satisfied customers. But it is very rare that any of the CEOs make any reference about the actual quality of their product in their year-end statements. Even when they do, it is normally a reference to the potentially manipulated HBF Customer Satisfaction Star Rating. The star rating is only based on around 30% of the homes that the larger house builders build each year so is hardly representative. CEOs may also mention awards won in the year such as the NHBC Pride in the Job Awards. However, some of the larger builders, whilst winning a handful of awards, have a poor record in the competition considering the number of active sites they have in any given year.

Top left to right: Jeff Fairburn –  Persimmon * Pete Redfern – Taylor Wimpey * Mark Clare – Barratt/David Wilson * Steve Morgan – Redrow * Greg Fitzgerald -Linden.  Bottom left to right:  Ted Ayers – Bellway * Tony Pidgley Berkeley * David Ritchie – Bovis * Stephen Stone – Crest * John Bloor – Bloor

House Builder CEOs

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