A new framework has been launched to increase accountability and transparency between developers and homeowners in a bid to prevent new home issues.
The New Homes Ombudsman Service (NHOS) is the responsibility of the New Homes Quality Board (NHQB), an independent not-for-profit body, created by the Building Safety Act, in an attempt to regulate the building industry better and close the gaps in consumer protection for buyers of new homes.
The New Homes Quality Code (NHQC) has been developed by the New Homes Quality Board (NHQB). Developers who become Registered Developers with the NHQB agree to act in accordance with the Code's provisions. The framework currently only applies to registered developers of the NHQB.
More than 100 members have signed up to adopt the code including housebuilders Barratt, Persimmon, Taylor Wimpey, Bellway, and Redrow.
What is the New Homes Quality Board (NHQB)?
Launched on 4th October 2022, the NHQB is a legal entity and board members appointed with representatives from across the sector including consumer bodies, developers, providers of new home warranties, the lending industry, Homes England, and independent members.
The NHQB states it will:
- Appoint and oversee the performance of the independent New Homes Ombudsman Service.
- Provide support and information to consumers and industry.
- Hold the register of developers of new build homes.
- Collect an annual registration fee from developers to fund the new arrangements.
- Discipline and sanction poorly performing developers.
- Report and publish details on industry performance.
The Board has developed the New Homes Quality Code which aims to 'fill the gaps in current protections and ensure that every aspect of a new home purchase, from when a customer walks into a sales office, through to two years after the purchase of the home is covered'.
All organisations registered with the New Homes Quality Board are covered by the New Homes Ombudsman Service. Customers who have reserved a new home with an active developer after their date of registration are protected by the New Homes Quality Code. When a customer of a Registered Developer brings a complaint to the New Homes Ombudsman Service (NHOS), they will determine whether the Registered Developer has acted in accordance with the Code, based on the evidence provided.
New Homes Quality Code (NHQC)
The NHQC consists of 10 fundamental principles that NHQB Registered Developers agree to follow and outlines practical steps expected to be complied with during the new home sale process.
The code includes:
- Requirement for developers to provide all relevant information about the home during the sales process – including its tenure and any future management or service charges – so consumers can make an informed decision about their purchase
- Allows customers to engage a professional to carry out a pre-completion inspection of their home on their behalf
- The Customer should be advised as to what may be assessed as a Defect and the Developer’s liability to remediate, giving reference to the Warranty Provider’s / Consultant’s relevant building finishes and tolerances publications.
- Specifies that a home must be “complete”, preventing developers from paying customers to move into a new home early
View the full developer code document here.
This code is upheld by the NHOS which acts independently of NHQB and will review each case to decide whether a developer has breached the New Homes Quality Code (NHQC).
Key points to note
While registration with the NHQB for developers is currently optional, it is expected regulations will be laid by the Secretary of State marking the NHOS as the ‘official’ scheme, making registration and other steps compulsory for developers within the scope of its powers.
The NHQB expects all developers within the UK to register for the NHOS scheme by December 2022.
Most developers of newly built private homes are expected to register with the NHOS, as it is likely to be a requirement of many new home structural warranty insurers and lenders. Under the Building Safety Act, the Government has reserved the power to require companies building and selling new homes to be part of the scheme.
Next steps
Alex Hurn, Managing Director of Sillence Hurn advises: "We will continue to stay ahead of any further developments of the NHQB and NHOS. While registration of the NHQB is not yet mandatory, there is clearly a shift of transparency between developers, builders, and consumers. For some developers, this will be a natural progression as they build on existing processes, for others, it may mean a shift in mindset as well as the implementation of structures. Either way, the introduction of the framework is a positive start to laying the foundations for a smoother process for all involved."
For more information about the NHOS and becoming a member of the NHQB start here.
To discuss contract administration and project management, or Professional Consultants' Certificates for your development contact us here.
