Housebuilding consumer code published

A new code of practice for housebuilders to be policed by an housing ombudsman has been published.

The New Homes Quality Board (NHQB), an industry-led body set up to create the voluntary ombudsman service, said the code, published on Friday, will fill existing gaps in consumer protections during the home-buying process, protecting buying from when they walk into a sales office, through to two years after the purchase of the home.

The code will prohibit high-pressure selling, require deposit protection and more detailed information from housebuilders about the homes they are selling, and ensure that housebuilders have an effective after care service in place to deal with snagging issues.

It will also ensure buyers are permitted to have an independent professional carry out a pre-completion inspection, and sets out a “robust” complaints process to deal with any problems.

Failure to resolve any complaints through that process will result in referral to the New Homes Ombudsman Service which the NHQB has been setting up in parallel with developing the code.

The NHQB last month appointed The Dispute Service (TDS) to carry out the Ombudsman role. The code itself has been drawn up by the industry-led NHQB, which consulted upon its plans in the summer. In order to ensure it qualified as an independent ombudsman service, no housebuilders were involved in the procurement and selection of TDS to deliver the Ombudsman service.

However, the whole process has been criticised by some consumer protection groups as being not independent of the housebuilding industry, with the NHQB itself dominated by industry voices.

See also >> The housing ombudsman and its consumer protection challenge

The move follows widespread concern over the quality of new homes over the last decade, with a 2016 report by MPs lambasting the industry for “unacceptable” quality failings that it said were letting down more than 15,000 buyers each year.

While the government has since embarked on legislation for a statutory housing ombudsman to address the problems, the code launched on Friday is not part of that effort.

This code and the accompanying New Homes Ombudsman Service have been drawn up by the industry and will be voluntary, with housebuilders not compelled to sign up to the code simply in order to trade.

Natalie Elphicke, chairman of the NHQB (pictured), said the code was a “central plank” in the work to drive up the quality of new build homes and strengthen redress for consumers.

“It fills the gaps in existing protections and puts considerably more requirements on builders in terms of how they deal with their customers and any issues that they have with their new home.

“Together with the access to the independent New Homes Ombudsman Service that we will put in place, it will deliver a step change in protections for new build buyers,” she said.

The announcement comes after lawyer and Tory MP Elphicke revealed last month that she will stand down from the job chairing the NHQB, with the news coming in the wake of the political furore over MPs’ second jobs in the wake of the Owen Paterson lobbying scandal.

The NHQB is planning to launch an online portal that will allow developers to start to register with the code from January, after which they will be provided with support and training to make the transition to the new arrangements.

Once their registration is validated and activated, all customer reservations of a new home taken from that point will have to meet the requirements of the new code and come under the remit of the Ombudsman.