Housebuilders face home truths over complaints

Published 01st Nov 2009

Increasing complaints about properties under NHBC warranty show that buyers are not prepared to live with shoddy workmanship.

Complaints about alleged defects in new homes are increasing, despite a slump in the number of properties sold in the recession. Complaints to the National House Building Council (NHBC), which offers warranties on 80% of new homes, topped 64,000 in 2008/09. This is up only slightly from 63,000 in 2007/08 but comes in a year when there was a 40% drop in the number of new homes sold because of the credit crunch.

The NHBC is an independent body but relies for funding on housebuilders buying its warranty schemes and training services. It released these figures only following a request by Guardian Money.

The figures also show a sharp upward long-term trend. The NHBC annual report reveals it paid £34m in compensation claims five years ago but by 2008/09 that was £59.3m.

In the past year, the council's resolution service, which arbitrates between developers and buyers, found in favour of the buyer in 69% of cases.

One buyer who complained is Christine Townsend, a teacher with two teenage children who in June of last year bought a four-bed house in Peterborough for £220,000 from Stamford Homes, which is part of the Galliford Try housing group.

"The faults were niggling things like labels left between double-glazed windows, right up to major cracks in walls. At first, Stamford rectified the problems but then they just gave up and weren't really interested," she says.

There were 114 unresolved faults identified by Christine and her father, Trevor, a retired fireman, including allegedly ineffective firebreaks and structural problems. The NHBC found in Christine's favour on 86 faults and now she wants to negotiate with Stamford to move to a different, similar-sized home nearby.

"You have to declare past faults when you sell a house. I'd been scared that, with the history of problems, I'd never have sold the home," she says.

The managing director of Stamford Homes, Brendan Blythe, offers the company's "sincere apologies" and says it does not dispute "the vast majority" of defects. But he says there is no proof that the home would be hard to sell if its history of defects was revealed, and refuses to commit to any compensation. He insists that Christine and her children move out while the remedial work is done – for an unspecified period – "to cause the least disruption possible".

Problems such as those affecting the Townsends are not rare in the industry.

"A third of new houses have 100 to 200 defects. Many are minor joinery faults but we've seen a three-storey house with no fire resistance in the walls, breaching building regulations," says Steve Roberts of New Build Inspections, a company that spots defects that have passed checks by the developer and the NHBC during building work.

Roberts says business is brisk in spite of the recession. But whereas most work used to be precautionary checks before people bought, the majority of clients now are owners living in their new homes and enduring acrimonious rows with developers over unresolved faults.

Things should have been better for buyers by now. In 2004 the Barker review, a survey of the housing market commissioned by Gordon Brown when he was chancellor, urged developers to improve customer care.

But a survey of 1,000 buyers last year by the Office of Fair Trading found continuing problems. About 32% could not move in on the promised date and 3% had a year's delay. A full 70% of buyers found faults, with 2% waiting a year for them to be fixed. About 24% of buyers said quality was low. Yet the NHBC claims that the increase in complaints is down to buyers being fussier, not builders being sloppier.

"Purchasers, rightly, demand everything is perfect for their money," said NHBC spokeswoman Sarah Hamilton. "People have become far more aware of their rights, so it's not necessarily a case of build quality being less good than before."

Anyone who rings the NHBC for information on developers' standards gets short shrift. The body will say if a particular developer is NHBC-registered but refuses to give details of the number or nature of complaints against individual companies.

The NHBC has had a near-monopoly over new-home warranties since another insurer, Zurich, withdrew from the market in September. The NHBC's 15-strong board includes a former chairman of the Citizens Advice Bureau, but four other members are heads of large housebuilding companies or the Home Builders Federation, a cheerleading group for developers.

Now the housebuilding industry is under notice from the Office of Fair Trading to improve its performance.

It has until March 2010 to create a redress system for disgruntled customers, involving compensation for delays and faults with properties.

The OFT warns that if builders do not create a system, then one will be imposed on them. It says: "In the event that the industry fails to make adequate progress … we recommend immediate further intervention in the form of a statutory redress mechanism for new-home buyers."
Finding fault: a step-by-step guide to checking your home

• Speak to those already living in a new scheme. Are there faults? Are they fixed quickly and adequately?

Research the developer online: has it been the subject of press articles or chatroom discussions about poor build quality and complaints?

Ensure your chosen home has a warranty from the NHBC, Premier or another insurance scheme.

• See the home before you buy: showhomes are often carefully designed with small furniture and few doors to give an impression of generous space.

• Developers may rush buyers in before financial year-end dates to improve their sales targets. Check that the home is properly finished and snagged.

• Consider instructing a conveyancing solicitor who has previously negotiated payment retentions over defects on new-build homes.

• After moving in, check over your property methodically every month and seek remedial work until the warranty expires.

We say: Instruct a Chartered Surveyor to inspect the new home before completion

Source: ' Guardian '

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