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New report from MPS calls for new homes ombudsman to resolve disputes

  • Publish Date: Posted about 3 years ago

​A new report from the All Party Parliamentary Group for Excellence in the Built Environment has led to pressure being placed on the government to set up an independent new homes ombudsman.

The report, Better Redress for Home Buyers highlights the problems and confusion new home buyers can face when trying to resolve building defects, especially by a plethora of warranties, housebuilding codes and complaints procedures; none of which put the consumer first.

The report is the result of the group’s latest inquiry into how an ombudsman scheme could operate and calls for the government to make the scheme free to consumers and able to provide a quick resolution to disputes and order pay-outs of up to £50,000. Disputes over larger sums might have to be settled in court, but the report adds: “In certain extreme situations the new homes ombudsman should be able to reverse the sale.”

The proposed scheme would be mandatory for housebuilders and would be modelled on the property ombudsman, to which all estate agents must to belong to and would be funded by a levy on housebuilders, with larger ones such as Berkeley Group, Persimmon, Barratt, Galliford Try, Redrow and Bovis Homes paying more than small and medium-sized firms.

The proposed scheme would cover the first two years following a house purchase when housebuilders are liable for defects, while subsequent problems would be down to the warranty providers.

The report also recommends that government, warranty providers, housebuilders and consumer groups work together to draw up a code of practice which would be used by the new homes ombudsman to adjudicate on disputes.

The proposal comes following reports of new-home buyers lumbered with defective properties and Richard Best, the group’s vice chair said, “Buying a new home is stressful enough but buying a defective one, as we heard from submissions and witnesses, can take a massive toll on people’s wellbeing as they wrestle with an almost Kafkaesque system seemingly designed to be unhelpful.” Mr Best continued “The purchaser of a new home in this country should be confident that they are buying a high-quality product, no matter where they are or who built it. Our proposals could help to make this a reality.”

The Home Builders Federation (HBF) highlighted that the report recognises that the industry has already made significant progress with regards to improving build quality and customer service. “Satisfaction amongst new homes owners remains extremely high but the industry is totally committed to going further," said HBF executive chairman Stewart Baseley. "The industry supports moves to put an ombudsman in place to further improve consumer protections and has already done a huge amount of work to consider how we best progress this ambition. Housebuilders will continue to work with all interested parties to deliver a new homes ombudsman and enhance consumer protections in a way that is workable for the industry and allows housing supply to continue to grow.”

The proposals have been presented to the ministry of housing, communities and local government as part of its consultation on a single housing ombudsman.