New-build housing: construction defects – issues and solutions (England)

The quality of new build housing

A good deal of political attention is focused on increasing the rate of house building, but alongside this are significant concerns about the quality of new developments. Concerns intensified after the Grenfell Tower fire in 2017.

There’s evidence of owners of newly built homes struggling to achieve satisfactory resolution when defects are reported to builders. The role of building control officers in ensuring compliance with the Building Regulations was the subject of Westminster Hall debates in 2015 and 2016.

A Westminster Hall debate on 16 October 2017 focused on warranties issued by the National House Building Council (NHBC). Kate Green secured a Westminster Hall debate on Protection for Homebuyers on 13 December 2018. She led a further debate on the same subject on 16 January 2020, during which she referred to her constituents’ experiences.

There are some high profile examples of blocks facing demolition/major repair work only a short time after completion due to construction defects, for example Solomon’s Passage in Southwark was completed in 2010 and condemned in 2016.

Evidence of customer satisfaction

Dame Kate Barker’s 2004 Review of Housing Supply called on the house building industry to demonstrate increased levels of customer satisfaction. The Home Builders Federation (HBF) and National House Building Council (NHBC) began to conduct national annual surveys of house builders in 2005.

The most recent survey was conducted over 12 months from October 2020 to September 2021 – the results were published in March 2022. The 2020/21 survey recorded 89% of respondents as very, or fairly, satisfied with the overall quality of their new home, representing an increase on 86% in 2018/19. 91% of respondents said they would recommend their builder to a friend. This was consistent with 2019/20 and an increase of 7% in the previous five years.

The HomeOwners Alliance also conducts annual surveys of homeowners, the most recent of which was published in August 2019. The survey recorded concerns about the quality of Britons’ homes as “the fastest rising issue” with almost two thirds (63%) citing housing quality as a serious problem.

The outcome of a Government consultation on consumer redress for buyers of new build homes (February 2020) noted: “Through the consultation we heard of the experiences that individuals have had when buying new build homes, which were, in the main, negative.”

Research and recommendations

The Callcutt Review of Housebuilding Delivery (PDF, 2007) recorded concerns about caveats included within warranties provided on new homes. It was felt they may not offer adequate protection for consumers.

The Office of Fair Trading’s 2008 study of the homebuilding market (PDF) also considered the effectiveness of warranties. One response was to recommend the introduction of a code of conduct to meet consumer protection concerns.

The industry responded with a Consumer Code for Homebuilders, now in its fourth edition. However, the All-Party Parliamentary Group (APPG) for Excellence in the Built Environment concluded (2016) the Code “does not appear to give homebuyers the safeguards we think they should expect.”

The APPG’s report, More Homes, Fewer Complaints recommended:

• improving the systems in place to check quality and workmanship;
• developing a new quality culture within the construction industry;
• improving customers’ means of redress through the establishment of a New Homes Ombudsman and a review of the warranty system; and
• improving the information customers receive about their new home, including standardised contracts and a right to inspect before completion.

The Government and industry response

The Government consulted on strengthening consumer redress in the housing market in 2018. On 1 October 2018, they announced an intention to create a New Homes Ombudsman Service (NHOS) to “champion homebuyers, protect their interests and hold developers to account”. The summary of responses to Strengthening consumer redress in the housing market, together with the Government response, was published in January 2019.

A consultation on Redress for Purchasers of New Build Homes and the New Homes Ombudsman followed in June 2019. The outcome was published in February 2020.

Measures to create the NHOS are contained in Part 5 of the Building Safety Act 2022. The Act is also reforming building regulation and management and takes forward the Government’s plan to implement the Independent Review of Building Regulations and Fire Safety (the Hackitt Review) findings, as well as other building-related measures. The Act’s provisions are not fully in force at the time of writing.

In the meantime, an interim New Homes Quality Board (NHQB) was set up to oversee the development of a new code of practice for the housebuilding industry and agree an appointments process for the NHOS. Following consultation, the new Code was published in December 2021. Its aim is to “drive up the quality of new build homes and strengthen protections for customers.” Registration to the NHQB is open to developers and the aim is to launch in autumn 2022.

The NHQB is not the statutory scheme under the 2022 Act. The Secretary of State may seek to enforce the arrangements the NHQB is putting in place or elect to make other arrangements.

There is also an intention to create a new Housing Complaints Resolution Service as a single point of access to redress services across all tenures. In March 2021, the Minister, Eddie Hughes, said: “Work was paused to prioritise the response to the pandemic but we continue to work on improving redress and meet with members of the Redress Reform Working Group.” On 18 May 2022, the Minister confirmed the group continues to meet.

In addition, the 2022 Act will, when the measures are in force, require developers of new homes to provide a warranty with a minimum period of 15 years.

This paper does not address aspects of the construction industry which play a role in building standards, such as workforce shortages and training. Section 3.7 of the Library paper, Tackling the under-supply of housing in England (CBP07671) covers these issues.