Many people who buy new-build properties are still facing significant costs and distress as a result of faults and delays in moving in, a major investigation by the Office of Fair Trading (OFT) has revealed.
The investigation, which was commissioned amid concerns that housebuilders were acting anti-competitively, also warns there some serious surrounding unfair terms and conditions, a lack of transparency and reservation fees.
On a positive note, the report found little evidence of competition problems with buyers benefiting from prices that are set through homebuilders competing for sales against each other. There was also no evidence that any homebuilders have enough market power to give them the ability to restrict supply and inflate prices.
John Fingleton, chief executive of the OFT, says that despite ruling out competitive issues, it is still concerned about the level of protection homebuyers have.
As a result, it has negotiated an industry agreement to form a body to write-up a code of conduct and offer a redress scheme to consumers disadvantaged by delays or faults.
Fingleton says: “ We believe that this measure will position this important sector of the economy to provide better levels of consumer satisfaction, with long-term benefits to the industry and consumer alike.”
During 2007 just under 194,000 new homes were built in the UK, representing sales of around £45 billion.