Structural Warranty Consultant at Build-Zone, asks what can be done to the benefit of buyers and developers alike…
After decades of practice, developers are still looking for consistency in delivering quality new housing. Bob Stembridge, Structural Warranty Consultant at Build-Zone, asks what can be done to the benefit of buyers and developers alike…
The recent All Party Parliamentary Group (APPG) Inquiry into the Quality of New Housing in England has highlighted the shortcomings in the new homes being delivered across England (and quite possibly in the whole of the UK but their remit did not go that far). What is significant is that in 2004, the Barker Review highlighted the issues with selling homes which were either incomplete or did not have an effective aftercare service.
The industry has since improved but not by as much as would have been hoped. As the report states, build quality reacts according to the level of activity in the market – less activity and the greater the quality of output but the opposite also applied, which was exactly the reason for the Barker Review. Quite often reports into housing quality compare the final product to buying a motor car. While the construction and delivery methods may differ, the buyer’s expectations are in many respects similar. They expect the product to be fit for purpose at the time of taking ownership and for years afterwards.
However, buying a new home just increases the stakes when things do not go to plan. Then the costs and extra effort needed to put things right can be astronomical. Thus an effective system that acts to prevent delays and misunderstandings can only benefit all parties. As a warranty provider, our role is to audit the developer’s work during construction of the new home and to provide a line of recourse for the owner up to 10-years after completion. Also, other stakeholders such as the lenders depend on our independence and the insurer’s financial strength to stand behind our 10-year warranty.
Thus we have a vested interest to ensure the developer produces a product fit for purpose, and the homeowner has the knowledge to look after it. The APPG have made ten recommendations which they hope will mean more homeowners are happy with the buying and owning process. Some are already in place and need tweaking while others will require a break from current ‘conventions’. Here’s a brief overview of some of those recommendations:
New Homes Ombudsman to oversee disputes.
Several attempts have been made in the past, but none have been as effective as hoped. Currently, the Consumer Code for Home Builders is required by the Lenders, most notably Lloyds Banking Group.
A single Code
To be run by the independently operating Office of Fair Trading rather than as at present with each warranty provider having their own interpretation. In the long term, this could prevent a developer opting for the less onerous Code option. Currently, the restitution offered under the Code is small, and it does not appear to have teeth. Part of the Code is to analyse the results to see if change happens. One method is an annual house buyer’s survey to test the satisfaction rates. Several warranty providers do this already. Some offer a star rating, and others include this in the annual rating performance on membership renewal. Once this takes hold, it is fair to assume the good ones will start to advise potential customers.
Standardising House Builders Sales Contracts
The buyer is always under pressure in this transaction and often feels unable to negotiate in a process that represents their dream purchase, which is both emotional and driven by the developer. Warranty providers all have a Dispute Resolution Service as a well as the Insurance Ombudsman referral system, but a standardised process in the sales contract would provide clarity at the outset. The Ruxley Case is an example of the balance being too much in favour of the vendor.
A buyer’s right to inspect the ‘finished’ new home in good time ahead of completion.
But surely it happens all the time? Well perhaps it does, but that is not what buyers remark in their feedback. Often the option is not available due to time constraints imposed in very active markets. As a warranty provider, we do not inspect all the finishes or extras the buyer has requested. Thus the buyer needs time to make sure their paid for contracted works are complete before signing on the line — without undue pressure from the sales team to adhere to a binding completion date. Providing a homeowner with a quality Information Pack or Log Book should be a matter of fact. Back to the car buying analogy – would you purchase without a car manual in the knowledge that anything you do may adversely affect the parts/servicing warranties? Homes have become more advanced with M&E systems as ‘standard’ that not so long ago were part of ‘Tomorrows World’. The benefit is that developers can refer the homeowner to their manuals, rather than running a whole customer care team to look at minor issues. Some developers provide extra warranties and services over and above the standard offering, so why not use the manual as part of the ‘Sales and Aftercare’ package?
New ISO standards
Here we are back to the culture in the organisation. To impose an ISO standard on top of the many obligatory regulations would be too much for many small and medium-sized developers. Large companies have intricate systems but as the report shows they also have some large and repetitive claims. Warranty providers and building control providers have a duty to highlight errors and offer advice, but the change must come from the developer. Industry training is already strong for technical aspects, mainly due to the legislation around the build process and products. However, it is not strong in the ‘Sales and Aftercare’ arenas. The report suggests that it could be improved and few would argue.
Standardisation of inspections
Defect prevention is the No.1 item on every warranty providers list. Getting the correct how, when, where and by whom is the Holy Grail of our business. Given the vast experience in the warranty and building control industries, few would argue against a DCLG consultation if it achieves consistency. (Remembering that requirements under building control can be different from what an insurer expects as they cover defined perils for an extended period of up to 12 years, not just compliance with the Building Regulations). The big ‘buy in’ must come from the developers themselves who need to understand the benefits and also the spread and recording of accountability. Otherwise, cost and corner cutting will continue to harm the great strides made in new building techniques and standards at risk.
Bob Stembridge ACIB
Structural Warranty Consultant
0345 230 9873
References: Planning and Building Control Today