A new code has been launched for house builders to drive up the quality of new homes and increase protection for customers.
The New Homes Quality Code of Practice, established by the New Homes Quality Board, covers the entire homebuying process, from picking out a plot to after-sales care for two years after you’re given the keys to your home.
The move is part of the house building industry’s commitment to quality and up to 40 developers from the Home Builders Federation are expected to commit to the code of practice within the next two years.
If you're interested in buying a new-build property, check with the housing developer to see if they have signed up.
Here’s everything you need to know about the code and how it protects you as a buyer.
What is the New Homes Quality Board?
The New Homes Quality Board (NHQB) is an independent body that was set up to create a new framework to ensure new homes are built to a high standard, and good customer service is provided by developers.
All housebuilders and developers building new homes are expected to register with the board.
In order to have their registration approved, enabling them to be a Registered Developer, housebuilders must commit to the code, show that their staff have received appropriate training and that they have a complaints procedure in place.
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What is the New Homes Quality Code?
The New Homes Quality Code replaces the previous Consumer Code for Home Builders.
It aims to fill some of the gaps in customer protection in the previous code and ensure every aspect of the home purchase process is covered – from when a buyer first walks into a sales office to two years after they have purchased their home.
How does the Code protect me?
The code increases protection for buyers in a number of ways.
Not only does it set minimum building standards that developers must meet, but it also allows customers to have a professional carry out a pre-completion inspection on their behalf.
The code places an emphasis on transparency, and the need to provide buyers with clear and accurate information about their new home, including whether it is freehold or leasehold, and any future costs the buyer will face in relation to the leasehold or management services.
It also sets out the aftersales care developers must provide and puts in place measures to protect vulnerable consumers.
Finally, it stipulates what complaints procedures builders must have in place in case their customers are not happy.
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How will the code improve the sales process?
The code sets out a series of requirements to ensure developers provide fair and complete information to people interested in purchasing a new home to avoid mis-selling, misleading information and high-pressure sales tactics.
This includes using plain language in sales and marketing material, as well as identifying vulnerable customers and ensuring appropriate steps are taken to help them to make an informed decision.
Developers must also disclose certain key information, including:
the price, size and specifications of the property
its tenure, ie whether it’s leasehold or freehold
any management services and service charges
its indicative energy performance rating
New Home Warranty provisions
the cost and coverage of any additional insurance, warranties or guarantees
any resale restrictions and future phases of development.
If the builder is offering a part-exchange or assisted move scheme to customers, the terms must be clear, fair and not misleading, and include details on how a fair market valuation for the buyer’s existing home will be obtained, and any deductions that will be applied to this valuation.
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What protection does the code offer during the buying process?
The code sets out that when buyers reserve a home, it must be done through a formal Reservation Agreement.
The agreement’s terms and conditions must be clear, fair and written in plain language, and must include the size of the reservation fee being paid, details about the property being bought and the buyer’s right to cancel.
The code states that all reservation agreements must include a minimum cooling off period of at least calendar 14 days, during which buyers can cancel and still receive a full refund of their reservation fee.
It also sets out the maximum amount a developer can charge buyers to choose a particular plot early, often known as an Early Bird or 'plot option', with the fee currently set at £150.
Similar rules are in place to ensure the Contract of Sale is also clear, fair and written in plain language.
The developer must also provide an opportunity for the buyer to visit their new home before completion, and allow them to appoint a professional to perform a pre-completion inspection.
In addition, the code stipulates that legal completion can only happen when the home complies with relevant building regulations and safety requirements, and a New Home Warranty has been issued, meaning buyers cannot be asked to complete on a property that still needs work doing on it.
Finally, the developer must have measures in place to protect buyers’ deposits, reservation and other fees, and any money due to be returned to customers must be paid within 28 days.
What if something is wrong after I move in?
Under the code, developers have to provide ongoing aftersales care and ensure buyers have access to a complaints resolution process.
In practice, this means they must offer aftersales assistance for at least two years after the buyer has received the keys to their home.
They must rectify any snags and defects, give a timescale in which the work will be completed, and make customers aware that they have the option to make a formal complaint if they are still not happy.
Any snags identified by buyers on first moving into their home should be fixed within 30 days.
If for some reason they cannot be fixed within this time, customers should be told why and given regular updates on when they will be dealt with.
Developers must also give the customer information on the New Homes Ombudsman Service and how to lodge a complaint with it if they are not happy with the way their builder responds to a complaint.
How do I complain about a housebuilder?
If you have a complaint, you should initially raise the issue with the developer.
But if you are not happy with their response, or they fail to engage with you, you can take your complaint to the independent New Homes Ombudsman.
If the developer fails to comply with a ruling by the Ombudsman, they will face a range of sanctions, including being removed from the list of Registered Developers.