New report calls for Mandatory Independent Ombudsman Scheme for Housebuilders

The All-Party Parliamentary Group for Excellence in the Built Environment’s (APPG) have called for the Government to make it mandatory for all housebuilders to belong to an independent ombudsman scheme in a new report published today (26 June).

The report, Better Redress for Homebuyers, calls for a New Homes Ombudsman service which should be independent, free to consumers and provide a quick resolution to disputes.  The report also recommends that government, warranty providers, housebuilders and consumer groups should work together to draw up a code of practice that would be used by the New Homes Ombudsman to adjudicate on disputes.

The report was welcomed by HQM, the new national quality Mark designed by BRE and colloquially known as ‘the Trip Advisor for new homes’.  The quality mark was developed with an extensive list of partners from the private and social housing sectors and helps to give people the confidence that the new homes they are choosing to buy or rent are well designed, well built, and cost effective to run.

More than 17,000 homes have been registered for HQM certification in locations across the England, including North West, East Anglia and Bath.  In August, registrations will be open in Wales and Scotland, however a National Ombudsman Scheme would offer protection for all buyers rather than just those who register for certification.

Gwyn Roberts, Homes & Communities Lead at HQM, said more protection for home buyers was needed:

“Consumers need more protection, and a clear place for them to ultimately take their complaints. The APPG recommendation is a big step forward. However, the housebuilding sector needs to do more to ensure that complaints don’t happen in the first place and ensure that consumer are happy with their homes as soon as they move in.”

Better Redress for Homebuyers is the result of the APPG’s latest Inquiry which investigated how an ombudsman scheme could operate, following its earlier report in July 2016 on the quality and workmanship of new housing in England.

That report More homes, Fewer Complaints, called for a New Homes Ombudsman after the Inquiry revealed a high level of frustration and disappointment from buyers of new homes, both in terms of the number of defects that new homes often had on handover, and also the problems they encountered in getting them fixed.

This latest Inquiry once again revealed the confusing landscape consumers face when they try to get redress for building defects, with a plethora of warranties, housebuilding codes and complaints procedures, none of which put the consumer first.

“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,” said Richard Best Vice Chair of the All Party Parliamentary Group for Excellence in the Built Environment.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.”

To reduce consumer confusion and help ensure consumer complaints are dealt with efficiently, the report recommends there is a single portal – or entry point – for ombudsman services spanning the entire residential sector, which would cover the conduct of estate agents through to social housing. Within this overarching service, there would be either a number of specialist ombudsmen or specialist divisions. One of these would cover new homes – and this is the aspect the report concentrates on with a view to establishing the case for a New Homes Ombudsman.

The APPG proposes that all disputes taken to the New Homes Ombudsman should be noted in an annual report. Funding for the scheme would be paid for by a levy on housebuilders, with larger companies paying proportionately more.

The Group was chaired by Eddie Hughes, the Conservative MP for Walsall North, until 13 June. He stepped down following his appointment as a Parliamentary Private Secretary at the Ministry of Housing, Communities and Local Government. The Construction Industry Council (CIC) provides the Secretariat for the APPG for Excellence in the Built Environment.

Graham Watts OBE, Chief Executive of the CIC, said:

“We are delighted to give our backing to this report. Consumers buying new homes should be entitled to expect the same levels of aftercare and redress they would receive when purchasing any other new product. A New Homes Ombudsman will ensure this service is available to them.”

The recommendations have been presented to the Ministry of Housing, Communities & Local Government to form part of its consultation on proposals for a single housing ombudsman to cover the housing sector.

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