The New Homes Quality Board has published its New Homes Quality Code – the new code of practice for the house building industry that aims to drive up the quality of new build homes and strengthen protections for customers.
The publication follows years of work to agree a single code and a full public consultation on its initial draft in early Summer.
The new code aims to fill the gaps in current protections and ensure that every aspect of a new home purchase, from when a customer walks into a sales office, through to two years after the purchase of the home is covered. The Code:
- Protects vulnerable customers, prohibits high pressure selling; requires any deposits the customer pays to their builder to be protected.
- Requires the developer to provide all relevant information about the home during the sales process – including its tenure and any future management or service charges – that allows them to make an informed decision about their purchase.
- Sets out requirements for a fair reservation agreement, including a ‘cooling off’ period; and sales contract requirements.
- Allows customers to have a professional carry out a pre-completion inspection of their home on their behalf.
- Specifies that a home must be ‘complete’, preventing builders paying customers to move into an incomplete new home early.
- Crucially, and to address the biggest gap in the existing arrangements, the New Homes Quality Code requires builders to have an effective after care service in place to deal with any issues or ‘snagging’ problems customers have with their new home; together with a robust complaints process that responds to customers concerns in a timely manner and to their satisfaction, keeping them informed throughout. If a customer is not satisfied with how any complaint they have made has been dealt with, they can refer their complaint to the independent New Homes Ombudsman Service
Over the past five years work has been undertaken to engage with a large number of stakeholders and considered the broad range of issues they have raised. Careful note was taken of the recommendations made in the ‘ More homes fewer complaints’ report in 2016 and the ‘Better redress for homebuyers’ report in 2017 by the APPG for Excellence in the Built Environment that made the establishment of a NHOS their number one recommendation. This detailed process enabled the New Homes Quality Code to be developed to the point it was felt it was ready for a full open consultation.
The response to the consultation on the new code was overwhelmingly positive about it, with over 250 responses from consumers and a wide variety of stakeholders. These have resulted in over 400 detailed changes to the version of the code that was consulted on. The NHQB has also committed to continue to review the code as the new arrangements are implemented and Ombudsman adjudications are made; and to do further work on the viability of other proposals made in the consultation that it currently couldn’t include without significant delay to implementation, and so to consumer protections.
In addition to the New Homes Quality Code (that has also been published in Welsh) the NHQB has today published a Developer Guidance Document; a Glossary and a report setting out how the final version of the Code was agreed following the consultation
Speaking today Natalie Elphicke, OBE, chairman of the NHQB said: “This powerful new code is a central plank in our 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.
“Over the coming months we will work closely with industry to support and help them make the transition to the new arrangements.
“I firmly believe that, whilst challenging to implement, the new regime will deliver a step change that the industry will ultimately recognise brings huge benefits for both their customers and them.”
The publication of the code follows on from the announcement last month that The Dispute Service has been selected as the NHQB’s Preferred Partner to create and operationalise a New Homes Ombudsman Service (NHOS).
The NHQB is also well progressed with the development of a portal that will allow developers to start to register from January. Once registered developers will be provided with support and training to enable them to make the transition to the new arrangements. Once both parties are satisfied that they are ready, builders will then ‘activate’. Once 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.
The intention is to introduce the new arrangements ultimately on a UK wide basis and all developers in Great Britain will be expected to register with the NHQB in 2022. The NHQB has been engaging with the UK Government and officials in the devolved administrations in Wales and Scotland as it has developed its proposals.
The Building Safety Bill that is currently progressing through parliament will provide Government with the tools to put in place a statutory New Homes Ombudsman The decision on how those powers will be used will be a decision for the Secretary of State at the time.
