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House-builders Reject Consumer Code for New Homes

A Consumer Code for New Homes (CCNH) has been launched today, with the aim of improving the marketing, selling and after-sales service provided by property developers that sign up to the code.

 

Covering the pre-purchases stage to ensure that buyers are kept clearly informed when buying their new home from a developer, the code ultimately aims to provide consumers with a clear complaints procedure if things go wrong with their purchase. It will provide consumers with information regarding aspects such as:

 

  • When the property will be available.

  • How deposits will be protected at exchange of contracts.

  • The minimum standards for handover and after-sales processes.

  • A complaints and disputes procedure; which will include an independent dispute resolution scheme for consumer complaints that are made in writing to the developer within two years of the completion date for the purchase of the new home – although there will be a one-off fee of £120 to access this service.

 

Homeowners will be covered by the code if they have bought or are buying a new-build home from one of the code’s registered members for two years after the date of their purchase. However, it will not apply to secondhand properties or to new-build homes built by developers that are not registered to the scheme.

 

With the exception of Taylor Wimpey (see our article on Taylor Wimpey to offer ‘Substantial Majority’ of Leaseholders a New Deal), over 50 companies enlisted at launch on the code’s website (www.ConsumerCodeForNewHomes.com). However, these exclude major house-building companies such as Barratt, Berkeley, and Persimmon.

 

However, many of the larger house builders have argued that they have not joined the scheme because they are already members of organisations such as the Consumer Code for Home Builders (established in 2010); a code that all developers registered with the National House Building Federation (NHBF) have to comply with.

 

It is indisputable that the code does make some progress in setting out clear guidance on how new homes should be marketed and sold. However, many have questioned whether the new Consumer Code will be able to significantly effect meaningful change on the industry, given that developers choose to register with the code on a voluntary basis.

 

In addition, despite the desire to raise standards in home building, there is no clear mention or solution to leasehold issues in the document.

 

For significant change, leasehold issues should be integral components of complaints procedures in order to prevent a repeat of the leasehold and ground-rent scandals that have dominated the industry this year. Without such reform, the amount of progress that can be made to regulate and protect new homeowners will always be limited.

 

 

Nemeth. H. (2017) ‘Major house-builders don’t sign up to new consumer code', Moneywise, 29 November [Online]. Available at: https://www.moneywise.co.uk/news/2017-11-29/major-house-builders-dont-sign-to-new-consumer-code (Accessed: 30 November 2017).

 

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