25th May 2023

Home builders Code review published

The Consumer Code for Home Builders has welcomed recommendations contained in a new independent review.

By JTS Staff
Journal of Trading Standards' in-house team
Service standards and satisfaction ratings have improved in recent years but there are still too many situations where new homeowners are let down by poor quality workmanship or customer service

Recommendations contained in an independent review by John Bridgeman CBE, former Director General of the Office for Fair Trading (OFT), will be used to bolster the Consumer Code for Home Builders and provide more comprehensive protection for buyers of new-build homes.

Implementing the report’s recommendations will result in significant enhancements to the Consumer Code for Home Builders, which was launched in 2010. These include broadening its scope to cover customer pre-inspections, improving how ‘snagging’ issues are dealt with and raising the maximum claim limit for complaints.

Compiling the review, which was commissioned by the Consumer Code for Home Builders’ Management Board, involved consulting with industry and consumer stakeholders, as well as an online survey which was open to all interested parties, including home buyers.

Bridgeman praised particular aspects of the Code, including its free, Government-approved Independent Dispute Resolution Scheme; its full accreditation through the Consumer Codes Approval Scheme (CCAS); its sanction regime, including the ability to exclude companies from warranty schemes for failure to comply; and its website and contact centre.

However, the report also highlights the need to address gaps and recommends several enhancements to improve protections offered. These include:

  • Aligning different code schemes and simplifying access to complaint advice for consumers (supported by 95% of respondents to the Code Review stakeholder questionnaire).
  • Raising the maximum financial compensation threshold, as well as the individual amount that can be awarded for distress and inconvenience.
  • Incorporating new requirements for home builders to improve how snagging issues (non-structural defects identified in the first two years post occupation) are dealt with, tackling some of the most common causes of complaint from new build home buyers.
  • Broadening the scope of the Code to include shared ownership and strengthening requirements to support vulnerable customers.
  • Outlawing financial incentives to complete on properties that haven’t yet met warranty standards and requiring any commissions for recommending products and services to be declared.

The report also makes recommendations for the wider industry and policymakers to consider, including a cash retention scheme to give consumers extra leverage, as well as an industry compensation fund to underwrite awards made to consumers.

John Bridgeman CBE commented: “Buying a new home is one of the most significant purchases we can make and moving into a brand new, well-built and energy-efficient property can be one of life’s real pleasures. However, the transaction is complex and involves a large sum of money which is why proper protection of consumers is essential.

“Service standards and satisfaction ratings have improved in recent years but there are still too many situations where new homeowners are let down by poor quality workmanship or customer service and by inadequate information. My recommendations are designed to deliver enhanced protection, greater levels of financial recompense and a more cohesive approach to customer service and support across the industry.”

Originally due in 2020, this review was delayed due to expectations that the Government may introduce a single statutory code of practice and statutory new homes ombudsman. With this now unlikely to happen in the foreseeable future, it has become more important to align existing Codes where this benefits consumers, to minimise confusion.

Consumer Code for Home Builders Chairman, Noel Hunter OBE, said: “This review reinforces the importance of robust consumer protection for the buyers of new-build homes. We’re pleased to see the Code’s positive role recognised, particularly in relation to our independent complaints process and sanctions regime. However, John Bridgeman has brought into focus the areas we need to strengthen to extend the scope of our Code, some of which we have already started to implement. The Code’s Management Board has accepted most of the recommendations and we will shortly be consulting on an updated Code. We will also work with policymakers and the wider industry to support the broader recommendations which sit outside our remit.”

Updated training and support materials will be provided at www.consumercode.co.uk to explain the new recommendations and protection available.

The full report and Code’s Management Board response are available to download in full:

Independent Review by John Bridgeman CBE

Code Review Board Response

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