Lord Bethell calls for mandatory regulation and urges goverment to ‘ignore housebuilders who don’t like the idea’
Buyers of new-build homes should be allowed to retain a bigger percentage of the purchase price until glitches are fixed than is being suggested in soon-to-be rolled out schemes, a housing debate in the House of Lords heard this week.
The Conservative peer Lord Bethell said he would go further than the Home Owner’s Alliance, which in the wake of recently build-quality scandals recommended a 2.5% retention be held back by a purchaser.
Listed housebuilder Persimmon said recently it planned to roll out a retention scheme whereby buyers would hang onto 1.5% of the purchase price until they were satisfied that any defects in thie new home had been sorted.
But in the peers’ debate Harrow-educated Bethell, a former manager of the Ministry of Sound nightclub, said that in his business career it was not unusual to have retentions of 5% or even 10% of the contract price.
“Of course, the homebuilders will not like that idea,” he said. “They might find that it affects their cash flow and administratively they might struggle with it, although retentions are quite common in other industries.”
Bethell called on the government to introduce “a mandatory, consumer-friendly snagging retention regulation”. He said this would act as “a great big industry-sized nudge for homebuilders to embrace modern and more reliable methods of production that deliver the sorts of homes that do not need endless tweaks and costly, irritating snagging to get right”.
Urging the launch of an immediate consultation on the subject Bethell said ministers should “take a robust attitude to complaints from the building industry and to come down on the side of the poor home-owning consumer in this important matter”.
Launching the debate Lord Bourne, undersecretary at the MHCLG, said Bethell’s suggestion around retentions were “certainly worth looking at.
“I am certainly not in a position to make commitments on behalf of the chancellor, but it looks like something we should be looking at, and I will certainly do that.”
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