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 developers that sign up to the code.
The code aims to provide consumers with a clear complaints process if things go wrong when they buy a new home from a developer.
It covers the pre-purchases stage to ensure that “fair and clear documentation” is provided to consumers; making sure that the buyer is given clear information about when the property will be available and how deposits will be protected at exchange of contracts. The code also covers minimum standards for handover and after-sales processes; and a complaints and disputes procedure, including 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. It won’t apply to secondhand properties and to new-build homes built by developers that are not registered to the scheme.
At launch, just over 50 companies are listed on the code’s website (Consumercodefornewhomes.com) but – with the exception of Taylor Wimpey West London – these exclude major house-building companies such as Barratt, Bellway, Berkeley, and Persimmon.
Moneywise asked Emma Loftus, head of brand and marketing at the CCHN, why larger house builders haven’t joined the scheme.
“As a new code, we are building our membership. This has started to increase more rapidly over the last few months. We are confident that our membership will grow significantly,” Ms Loftus says.
She adds: “The larger developers have traditionally not shopped around for structural warranties. There has been quite a bit of media coverage on this very issue. We hope this will change in the future and we welcome enquiries from the larger house builders.”
The larger house builders may not be joining the scheme because they are already members of the Consumer Code for Home Builders which all developers that register with the main home warranty bodies such as the National House Building Federation (NHBF), have to comply with.
A spokesperson for house-builder Barratt says: “We are already signed up to a strong consumer code (Consumercode.co.uk), which has been in place since 2010. This code is supported by leading industry bodies, such as the NHBC, Home Builders Federation, Council of Mortgage Lenders, House Builders Association, etc.”
Explaining the thinking behind having a new code, Ms Loftus adds: “Our code, the consumer code for new homes, was set up by like-minded warranty bodies in the market with a true desire to raise standards in home building and offer high levels of customer service.
“The structural warranty market has changed massively over the past few years and there are now many more players in the market. A group of warranty bodies that hold similar ethos and values and have a genuine desire to raise standards came together to set up a new code that is independent and has Chartered Trading Standards Institute approval.
“We wanted to provide an alternative in the marketplace. The consumer code for new homes is completely independent from the warranty bodies that support it, plus has CTSI Code Approval.”
Louie Burns, managing director of Leasehold Solutions, which specialises in helping clients to extend their lease or buy the freehold of their property, says he welcomes any move that makes the buying of new homes more transparent and fair, saying: “The code makes some progress in setting out clear guidance on how new homes should be marketed and sold. In particular, we welcome the requirement that developers should not restrict the buyer’s choice of legal representative.
However, he is critical that registering to join the code is not compulsory. “Given that developers choose to register with the code on a voluntary basis, it remains to be seen whether there will be significant take-up across the industry to effect meaningful change,” he says.
“We are also very concerned that there is no mention of leasehold issues in the document, with the exception of several vague references to the requirement for developers to provide ‘details of any leasehold arrangements to which the New Home is subject’.
“We would also like to see leasehold issues included in the complaints procedure and resolution service, which seems rather toothless.”