Consultation

Section One: Creating a New Register of House builders

The new homes quality reforms introduce a new requirement for house builders to become Registered Developers, which means they agree:

1. To be registered with the New Homes Quality Board;

2. To follow the new mandatory principles and requirements of the New Homes Quality Code; and

3. To be subject to the remit of the independent New Homes Ombudsman in relation to complaints which arise in the first two years of purchase

There is an identified gap in complaints redress in the first two years as 2-10 years are addressed through a home warranty that is subject to Financial Services regulation, with redress to the Financial Services Ombudsman. 
 

How important is it that there is a register identifying those house builders who agree to the requirements and principles of the New Homes Quality Code?

 

Section Two: The Fundamental Principles of the New Homes Quality Code

The New Homes Quality Code contains ten overarching mandatory principles (the Fundamental Principles). These are:

1. Fairness: treat Customers fairly throughout the home buying and after-sales process.

2. Safety: carry out and complete works in accordance with all requisite Building Regulations and as set out by the Building Safety Regulator.

3. Quality: complete all works to a good quality standard and in accordance with the specification for the New Home and ensure that Legal Completion only takes place when a home is complete (as defined in section 2 of this Code).

4. Service: have in place systems, processes and training of staff to meet the customer service level requirements of the New Homes Quality Code and not use high-pressure selling techniques to influence a Customer’s decision to buy a New Home.

5. Responsiveness: be clear, responsive and timely in responding to Customers’ issues by having in place a robust after sales service and effective complaints process as required by the Code.

6. Transparency: provide clear and accurate information about the purchase of the New Home, including tenure and potential future committed costs such as those relating to leasehold or management services.

7. Independence: make sure that Customers are aware that they should appoint independent legal advisors when buying a New Home and that they have the option of an independent accredited pre-completion inspection before Legal Completion takes place.

8. Inclusivity: take steps to identify and provide appropriate support to Vulnerable Customers as well as to make the Code available to all Customers, including in appropriately accessible formats and languages.

9. Security: ensure that there are reasonable financial arrangements in place, through insurance or otherwise, to meet all obligations under the Code, including timely repayment of financial deposits when due and any financial awards made by the New Homes Ombudsman service.

10. Compliance: be subject to, co-operate and comply with the requirements of the New Homes Quality Board, the New Homes Quality Code and the New Homes Ombudsman service.



If you are answering this consultation as a house builder or industry professional, please go to question 2A

If you are answering this consultation as a consume
r who has bought a new build home at any time, please go to question 2B

If you are answering this consultation as a consumer who has not bought a new build home to date or other respondents, please go to question 2C


2A: House Builder/Industry Professional:

Please choose the answer which is closest to your business experience:

In my view the Fundamental Principles are:

 

2B: New Build Purchasers:

Please choose the answer which is closest to your purchasing experience:

In my view and reflecting my own home purchasing experience and the Fundamental Principles:

 

 

2C: Consumers/other respondents who have NOT purchased a new home:

How important is it that The Fundamental Principles are brought in under the new Code to improve the home buying experience:

 

Section 3: Scope of the application of New Homes Quality Code (The Code) – consumer purchasers

The Code and the New Homes Ombudsman service has been developed to create a new independent redress for a consumer who purchases a home they will live in, not as an investment or with another party (who is not part of the household). This means new homes purchased directly from the Registered Developer (including their sales agent) by a consumer purchaser.

This means that it will not apply to certain purchases which are set out in more detail in Section 2 of the Code, including:

1. Homes purchased from a builder who is a not a Registered Developer 

This is because the Code and the New Homes Quality Board applies only to sales by Registered Developers and their agents.

2. Homes purchased under a shared ownership arrangement with a Registered Provider of Social Housing (e.g. a housing association) who is not the Registered Developer for the property
This is because the Registered Provider is the party who contracts with the developer, not the consumer. So they should be dealing with the builder to deal directly with any issues arising and should take responsibility to do so. There is a separate ombudsman and regulator for Registered Providers. A shared ownership sale will be between the housing association/ Registered Provider and the Consumer. The developer is not a party to it. A Registered Provider who builds property for outright sale should apply to be a Registered Developer under the Code and will be subject to the same standards and provisions with regard to the Code and the New Homes Ombudsman Service.

3. Self-build properties
This is because self-build properties are under a bespoke commercial agreement between the builder and the self-build consumer, who is much more involved in the building process. 
 
4. Properties purchased for rent. 

Properties purchased for rent are outside the scope of these provisions, which are intended to better regulate the relationship between a consumer purchaser and a builder, not someone who purchases as a landlord or for primarily for investment purposes.

3: Thinking about the scope of the Code, which of these most closely matches your view (please tick all that apply):

 

Section 4: New measures to stop poor sales practices and ensure inducements are declared:

The Code includes new measures to put an end to poor sales practices including High-Pressure Selling and requires Registered Developers to declare hidden inducements (payments to connected parties for recommendations). These include:

1. A prohibition on making a sale or an incentive conditional on using a specific solicitor, conveyancer or mortgage advisor

2. A prohibition on requiring an immediate decision to reserve a property in order to secure a reduction in price

3. A prohibition on pretending that there is another buyer or that the price is about to be increased unless the purchaser reserves the properly immediately

4. Requiring builders to provide buyers with fair and clear information about any part-exchange scheme

5. Requiring builders to inform the buyer if the builder would receive commission for recommending certain products or services, including legal and financial services.


4: How important are these changes to tackle poor sales practices:

 

Section 5: A new right for buyers to carry out a Finishing Check before completion to identify any finishing issues

Not all developers currently allow buyers to check and inspect a home before the legal completion date in order to check for any finishing issues. The new Code includes a new right for a buyer or a suitably qualified representative to carry out a check of a new home before legal completion in order to identify any minor defects or incomplete items (Required Finishing Items) under a new Pre-Completion Check Protocol. The Protocol will set out the following conditions to the inspection:

1. the appointment for the Finishing Check must be agreed with the house builder and can be carried out by the buyer or a suitably qualified representative on their behalf, where a suitably qualified representative means a professional registered with or otherwise accredited by RICS or RPSA or another appropriate professional body

2. all health and safety requirements required by the Developer must be complied with at the property and in relation to the site as a whole

3. the finishing check shall cover those items set out in the standard finishing check guidance provided by the relevant professional body of that qualified representative

4. the finishing check is to take place when the home is near legal completion

5. the builder will aim to remediate required finishing items prior to completion or set out to the buyer the timescales for completion of these finishing items.


5A: Do you think that a pre-completion check will help buyers identify issues before they move into their new home?

 

5B: How important is a compulsory right to pre-completion check to ensure that builders finish homes to a high standard?

 

Section 6: A new obligation to inform buyers of known and additional costs.

Not all developers have let buyers know what costs they have in relation to their new home, leading to hidden costs and unplanned bills. The new Code provides an obligation for Registered Developers to inform buyers of types of known and anticipated additional costs including fees for management services or maintenance costs.

6: Thinking about the obligation to inform buyers of costs, which of the following most closely matches your view:

 

Section 7: After sales service and dealing with complaints

Under the new code all developers must have an effective after sales service where they will be expected to deal with issues that arise post occupation, such as snagging.

In addition new standards processes are being introduced to deal with complaints.


Complaints Handling can be of varied quality in the housebuilding industry. The new Code looks to set out a customer journey* that brings in set time periods and consistent expectations for dealing with complaints as follows:

1. the complaints process must be provided to the buyer so that the buyer knows how any complaints can be made;

2. complaints must be acknowledged within 5 days of being received;

3. by 10 days a written initial response must be sent setting out how the complaint will be investigated;

4. by 30 days a written detailed response must be sent setting out:

     (a) which complaints are accepted, whether they have been fixed; if not, how they are
      going to be fixed, and by when, including any further investigations required to resolve the matter;
     (b) which complaints have been rejected and why;
     (c) whether the complaint is one where the consumer may be able to access an additional complaints
      service provided with their warranty and details of the process for that;
     (d) information about how to use the New Homes Ombudsman Service;
     (e) where complaints have not yet been fully resolved and have not been rejected, information about
     how regularly the consumer can expect to have an update about the complaints.

5. by 56 days from the date of the complaint being received, a written response updating the consumer on the progress of their complaint. From the 56 day point the consumer can apply to the New Homes Ombudsman Service to investigate the complaint.

6. The New Homes Ombudsman Service will, other than in exceptional situations, require the builder’s published complaints process to be completed by all parties before accepting a complaint.

7. The New Homes Ombudsman Service will be free to consumers.


7: If you are answering this consultation as a house builder or industry professional, please go to question 7A

If you are answering this consultation as a consumer who has bought a new build home at any time, please go to question 7B

If you are answering this consultation as a consumer who has not bought a new build home to date or other respondents, please go to question 7C


7A: House Builders:

Please choose the answer which is closest to your business experience:

 

7B: New Build Purchasers:

In my view and reflecting my own home purchasing experience on the complaints process this new complaints and Ombudsman service would improve the experience:

 

7C: Consumers who have not purchased a new home/other respondents:

This new complaints and Ombudsman service would give me a greater confidence in buying a new home

 

Section 8: About Me

Please complete one or more of the following to help us understand your answers best: