This briefing paper considers the existing building control regime and customers’ means of redress when faced with defects in newly built housing. It summarises the findings of the All-Party Parliamentary Group's 2016 inquiry and recommended actions and explains the Government and industry response.
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More housing but poorer quality?
A good deal of political attention is focused on the need to increase the rate of house building, but alongside this are growing concerns about the quality of the houses under development. MPs are encountering constituents who have bought new homes and who are 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 two Westminster Hall debates in 2015 and in 2016. A Westminster Hall debate on 16 October 2017 focused on issues with warranties issued by the National House-Buidling Council (NHBC). There are some high profile examples of some recently completed blocks facing demolition due to serious construction defects, for example, Solomon’s Passage in Southwark which was built in 2010.
An inquiry by the All-Party Parliamentary Group
In this context, the All-Party Parliamentary Group (APPG) for Excellence in the Built Environment carried out an open inquiry into the quality and workmanship of new housing for sale in England and published its report, More Homes, Fewer Complaints, in July 2016.
The APPG identified a risk around efforts to incentivise house building for homeownership if similar attention is not directed at ensuring consumers are buying “new homes that are fit for purpose, are of enduring quality, perform to the requisite levels of maintenance, cost and energy efficiency and give peace of mind, pride and enjoyment to those who occupy them.”
More Homes, Fewer Complaints contained a number of recommendations aimed at:
- 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 APPG felt that the recommendations would address the imbalance identified in the bargaining positions of builders and house-buyers.
The standard of newly built housing has come under scrutiny before. The Callcutt Review of Housebuilding Delivery (2007) noted concerns around caveats included within warranties provided on new homes. It was felt that they might not offer adequate protection for consumers. The Office of Fair Trading’s 2008 study of the homebuilding market also considered the effectiveness of warranties. One response was to recommend the introduction of a code of conduct to address the consumer protection concerns. The industry responded with a Consumer Code for Homebuilders, now in its fourth edition. However, the APPG concluded that the code “does not appear to give homebuyers the safeguards we think they should expect.”
Government & industry response on consumer redress
The former Housing Minister, Alok Sharma, responded to the Westminster Hall debate on 16 October 2017 saying “it is clear that home builders need to step up and make quality and design a priority. That includes ensuring that, where something goes wrong, house builders and warranty providers fulfil their obligations to put things right.” He described the following actions which were underway:
- The Government is “seriously considering” the APPG’s recommendations.
- The House Builders Federation (HBF) will issue a formal response to the APPG’s report.
- The HBF has set up a working group and “will take forward action to provide better information to customers, simplify the legal process and create a clearer and simpler process for signing off new homes as complete.”
- The HBF working group has commissioned an independent report on consumer redress for new homebuyers.
- The Minister said he would review the independent report “with a view to ensuring that improved redress arrangements are introduced to provide greater protection to consumers on a broad range of issues, with a greater degree of independence from the industry.”
- On calls for a new housing ombudsman, the Minister said “I am considering that option very seriously indeed.”
Subsequently, on 29 November 2017 Sajid Javid, then Secretary of State at DCLG, told a group of housing professionals that it was vital that the quality of new build homes continues to improve. He said that the Government would consult in 2018 and “look at options to explore how the overlap between responsibilities can be improved. This would help to avoid the confusion faced by consumers over where to seek help.” Strengthening consumer redress in the housing market: a consultation ran between 18 February and 16 April 2018.
The APPG published Better redress for home buyers in June 2018 which focused on how a New Homes Ombudsman could drive up standards and improve consumer redress.
On 1 October 2018, the Government announced an intention to create a New Homes Ombudsman 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. There is an intention to create a new Housing Complaints Resolution Service as a single point of access to redress services across all tenures.
June 2019 saw publication of a technical consultation, Redress for Purchasers of New Build Homes and the New Homes Ombudsman. Submissions are invited up to 22 August 2019; responses will inform future legislation.
CIOB call for evidence
In June 2017 the Chartered Institute of Building (CIOB) set up a Commission of Past Presidents to consider construction quality standards following the closure of 17 schools in Edinburgh earlier in the year. The fire at Grenfell Tower prompted the Commission to launch a call for evidence in October 2017. The Chair of the Commission, Paul Nash, referred to the tragic events at Grenfell underlining “the need for an urgent review of the way in which quality is managed in our industry.” Evidence could be submitted up to 15 December 2017. 75% of the 200 construction industry respondents to the call for evidence reportedly believe that “the industry’s current management of quality is inadequate.”