Tag Archives: survey

Strengthening consumer redress in the housing market – A Consultation.

An 8-week consultation is launched with the potential to give new homebuyers a route to an independent new homes ombudsman

Sajid Javid This 8-week consultation, hot on the heels of the ‘behind closed doors’ sessions of the APPG EBE Inquiry to look into the potential and detail for a New Homes Ombudsman”,  announced by Sajid Javid on 29 November 2017, was finally launched on 18 February 2018 and is indeed taking place “in the New Year” It is titled “Strengthening consumer redress in the housing market” but is it what it seems?

Is Javid fully committed to giving beleaguered new homebuyers a statutory New Homes Ombudsman? This being paid for by a levy on housebuilders as recommended in the APPG EBE strangely titled Inquiry report “More Homes – Fewer Complaints” published as long ago as 13 July 2016!

Since this Inquiry report, we have had three housing ministers, yet none of them has seen fit to implement any of the APPG Inquiry report recommendations. We have reviews, considerations, discussions with stakeholders and all manner of excuses and delays. In the meantime, I have encouraged new homebuyers to write to their MPs and demand a new homes ombudsman be set up. So now 20 months later, we have yet another ongoing APPG EBE Inquiry (with any report due August at the earliest with October more realistic) and Javid’s 8-week Consultation ending on 16th April 2018.

The last housing 8-week consultation regarding unfair leasehold practices was from 25 July to 19 September 2017. The government response, dated 21 December 2017, (91 days after that consultation ended) indicted that just 5,336 private individuals took part. The Facebook National Leasehold Campaign Group has 10,000 members! It is to be hoped that at over 15,000 new home buyers will take part in the current consultation and leave the government in no doubt that a stand-alone new homes ombudsman is badly needed. Given previous experience, the government response can be expected around 16 July 2018.

So let’s go through the nitty-gritty, of the Consultation notes, page by page:

So first point to note on page 4 is “Any policy changes brought forward as a result of the consultation would be subject to appropriate assessment”
A ‘Get out of Jail Free’ card for housebuilders?

It is clear from Javid’s Foreword that he personally favours a single housing ombudsman. But a Housing Ombudsman already exists, so is Javid saying it isn’t working effectively? Is he using the furore surrounding defective new homes as a way to force through root and branch changes to the existing Housing Ombudsman? It would appear that the current proposal he favours is to combine the various existing ombudsman dealing with housing issues into one and add a function within that for new home buyers to seek redress against their failing housebuilders. Page 25 states that “primary legislation would ultimately be required to create an entirely new organisation to combine most of the existing housing redress functions and potentially also new functions” (a new homes ombudsman?)

On page 6 we find another ‘Get Out of Jail Free Card’ this time for the warranty providers as consumer redress would still remain with the Financial Ombudsman Service. Issues with new homes can be both technical and complicated and not suitable for an assessor at the FOS to rule on even though a new home warranty is in essence, an insurance product.NHBC New Home Warranty not within scope of the consultationA great deal of this consultation scope relates to tenants, social housing, estate agents, park homes and finally, buyers of new build homes (page 9) where it states that if the housebuilder fails to resolve issues and “the buyer disagrees with the warranty provider’s decision, or no action is taken the consumer can find they have no route to redress.” 

Apparently The Consumer Protection from Unfair Trading Regulations 2008 are enforced by Local Trading standards Services” (page 10). So can we expect a prosecuting for this blatant and proven breach?  

Finally, on page 19 we have three paragraphs under the heading “Buyers of new build homes”  there is an acknowledgement that “there are gaps in protection and there needs to be more robust protection for homebuyers in the first two years after purchase.” It also states that “We [the government] are working with the Home Builders Federation and warranty providers to address these issues and we want them to continue to drive improvement.”  The clear reality is there has been deterioration in the last 20 years. The HBF will always seek to protect the interests of their member plc housebuilders and warranty providers will protect their own interests, both ahead of those of consumers. 

Guidance for new homebuyers completing the consultation survey:

Question 2 answer “A person who has recently bought a new home” This is important as it will show the number of new home owners that took part in the consultation and demonstrate the need for a specific new homes ombudsman.

Questions 6 and 7. If you tick “The Consumer Code (IDRS)” please also give your opinion of how satisfied you are. Around 61% of new homebuyer’s cases with the CCHB adjudication scheme succeeded since it started but awards averaged just £1,498 – just 18% of the amount claimed! The government may try to claim the CCHB IDRS is effective even though the previous APPG Inquiry found it “limited in scope” and “does not appear to us objectively to offer consumers a wholly satisfactory form of redress”

Question 8 answer “there are gaps in redress”
That is, there is no independent, government-appointed new homes ombudsman!

Question 9 has no option for a New Homes Ombudsman. Those completing are advised to select “Other” and write “new homes ombudsman” in the box

Question 10 answer “Yes” and add “an independent statutory new homes ombudsman” in the box.

It is vital that the new home disputes are regarded as a separate issues from the existing housing ombudsman that deals with tenant disputes etc so,
Question 11 should be answered “NO – different sectors require different practices.”

Question 13 should be answered “Yes”
All ombudsmen should publish decisions as it is in the public interest to do so.

Question 14 “Time to deal with a complaint” is more difficult, so answer -“it depends on the complexity of each case” as specialist testing and reports may be required for new home issues.

On page 16 we learn that the Housing Ombudsman awarded compensation in a third of cases ranging from a ‘massive’ £20 to £8,195 – hardly suitable for new homebuyers! Most common awards across the three existing property schemes were stated as a paltry £50 to £500. Clearly miserly awards like these are not going to force housebuilders to improve what they do and don’t do!

Question 16 “Sanctions” Answer – “Financial award greater than £25,000” as justifiable, meaningful compensation must be available for the new homes ombudsman to award. Be wary of “Do you want to continue with the survey?” Click “YES – continue to section 5 addressing the gaps” otherwise you will miss the crucial questions for new home buyers!  Was this a cynical attempt by government to avoid responses from new homebuyers?
Consultation trick to miss new home questions?Question 17 Answer “Yes” adding in the box that “the CCHB does not cover disputes regarding snagging, quality and defects in new homes or any warranty issues or disputes with warranty providers.”

Questions 18, 19, 20 and 21 are crucial for all new homebuyers and need your responses as shown below:
Consulation New Home Buyer questionsQuestion 30 is perhaps the most significant question as it is the only opportunity for a response to ensure that a new home ombudsman is separate from a general ‘one-size-fits-all’ “housing ombudsman” that Sajid Javid appears to prefer.A separate New Homes OmbudsmanIt is imperative that the link to this consultation is shared via social media with all those that have bought a new build home. It needs a high response from new homebuyers to force government to sit up and take note and set up an independent new homes ombudsman as soon as possible.

If such a new homes ombudsman existed, all new homebuyers would be able to claim justifiable compensation, not just get their defective new homes rectified eventually! This is in everyone’s interests, those that have bought a new home and those that will in the many years to come! It is just too important to ignore.

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Have Persimmon Tried To Buy A Better HBF Star Rating?

Can buyers trust HBF  builder Star Ratings?

The HBF National new home customer satisfaction survey is now in its eleventh year. The house builder star ratings (awarded by the HBF) “are allocated according to the proportion responding Yes..” to Question 1 of the survey: “Would you recommend your builder to a friend?…. Yes or No”    The more that respond “Yes”, the better the builder’s star rating.

During research for a previous article concerning claims made by the HBF in the 2016 survey results, I considered the possibility that builders’ sales and site management may be influencing their buyers to respond more favourably in the NHBC 8-week survey. After enquiring on social media, buyers from Britain’s two largest house builders, Persimmon and Barratt, who together built over 31,000 new homes last year, publicly expressed their opinions and claims:

Persimmon HBF SurveyJP (16 October 2015) said: “I’ve bought a recent new build from Persimmon and o boy what a joke their after sales are. I would like to point out I love my flat it’s them that annoy me. We have all been bullied and harassed to tick the first box on the NHBC survey that we would recommend a friend. Obviously didn’t tick it and because I naively ticked share my opinions Persimmon are now treating me like dirt……They were ringing us Saturday and Sunday and I quote “If I do you a favour now, you can do me a favour and tick the first box” They didn’t give a **** about our problems just whether we had said yes or no.”

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Buying a home without a full survey is a false economy.

According to The Mail on Sunday, four in every five buyers don’t bother with any home survey, let alone getting a  full survey.  This is despite the fact that if anything is found it can be used in negotiations to reduce the price.  Buying a home is undoubtedly the biggest single purchase most people make in their lifetime.  Get it wrong and it can be a mistake you could end up paying for during most of your lifetime!

Council house 2

Get a survey done before making an offer

Compared with the other costs involved with buying a home, getting a full survey done is relatively small beer when compared to legal fees, stamp duty and mortgage arrangement fees.

There are four main types of survey available.

Valuation survey

This is carried out on behalf of the mortgage lender and is not a condition survey. Do not be fooled into thinking this will give you protection and piece of mind – it won’t! A valuation survey is just that, the lender is checking the property is “valued at” actually worth the price agreed, or at the very least the amount of the mortgage. Sometimes these surveys are done by just driving past the home being bought!

Condition report

This is the most basic survey. It should highlight problems regarding structural movement, damp and woodworm, but it is not thorough. It will indicate which areas need attention but not what specific repairs are required. No professional advice is given. Typically, a condition report costs around £300.

Homebuyer report

Whilst less expensive than a full structural survey, it does provide more detailed information than a condition report. The price should include professional support or further explanations from the surveyor after the inspection. However, in some cases any specific issues noted may be advised for further investigation, leaving both buyer and seller none the wiser without further specialist investigation. A homebuyer report costs from £400 to around £650.

Full structural survey (aka Building Survey)

This is the most comprehensive survey and is strongly recommended, especially for those buying very old, listed, or period properties. It will provide a detailed, technical report regarding the condition of the property, highlight any defects and give advice on possible solutions and repairs. However the full structural survey is the most expensive and can cost around £1,000. As with anything, you get what you pay for!

Snagging inspection survey

For those buying a brand new home, a snagging survey is an absolute must. There is no need for a detailed building survey as new homes come with a 10-year warranty. However, the quality of new homes is generally poor, attention to detail is often found lacking and it can be a complete nightmare trying to get any snagging defects rectified after you have moved in.

TW Snag Light Switch

Buying a new home doesn’t mean it will be problem free!

Let’s face it, once a house builder has your money what incentive do they have to fix problems quickly? It is no good thinking, “it is a new home with a warranty”  because 96% of new homeowners experience problems of one sort or other and getting them fixed is always a hassle.  The money spent on a professional snagging inspection will always be money well spent.  Compared to other surveys, they are relatively inexpensive too, typically costing from £250 to around £450 depending on the size of the home inspected. Some of the better snagging services include liaising with house builders and support after you move in too. Advice on choosing a snagging inspector.

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NHBC say new home buyer’s feedback is increasing

NHBC LogoThe National House Building Council’s (NHBC) Annual Review 2012/13 announced survey results showing of 29,330 new home buyer’s, 91% are ‘very’ or ‘fairly satisfied’ with the quality of their new home and the same number would recommend their house builder to a friend. The NHBC claim “with another year-on-year increase, these levels of customer satisfaction still match or exceed those in almost any other industry or sector and are testament to the industry’s commitment to deliver quality new homes that meet the expectations of their homebuyers.” 

HBF 2013 5 starHowever, the “increase” is just 1% more than the HBF 2013 survey results from a sample size of just 20,313. The HBF survey represents barely a fifth of the total number (109,730) of privately sold new homes built in the survey year, which is hardly representative. 

The NHBC claim to send out over 100,000 questionnaires annually with a response rate was between 50 and 75%. They have now also launched a new online platform enabling participating house builders to easily review their feedback in much more detail than before and they can also compare their customer satisfaction scores with those of their competitors. The platform also gives builders opportunity to add a number of bespoke questions to the surveys, allowing them to change the questionnaire to meet their own specific requirements. 

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