New Homes Ombudsman

New protection for homebuyers is set to become law via a New Homes Ombudsman. The Ombudsman will retain powers to command compensation for poor building work and enforce high building standards.

In addition to this assurance of standards, sustainability and ‘fit for the future’ are two additional benefits being brought to homeowners under the initiative.

All property developers of new homes for the purpose of selling them will have a statutory obligation to register for the scheme.

How the scheme will operate

The government documentation outlines codes of practice by which the Ombudsman will operate. These include;

  • Being independent from industry and so able to act in an unbiased manner
  • Being tasked to resolve disputes at an early stage and on an informal basis
  • Retaining authority to act swiftly, resulting from powers which include;
    • Ability to make awards for compensation
    • Publishing details and reasons for expulsion
    • Directing developers to improve their service
    • Requesting information from developers
    • Requesting developers to undertake, or refrain from undertaking work
    • Ability to make recommendations which include timescales for rectifying disputes
    • Requesting apologies and explanations from developers

The most severe outcome of a complaint will be the expulsion of the developer from the scheme.

These powers are being put in place to ensure the effective investigation and resolution of consumer complaints.

Government response

The housing secretary, Rt Hon Robert Jenrick MP has said:

“It’s completely unacceptable that so many people struggle to get answers when they find issues with their dream new home. That’s why the Ombudsman will stop rogue developers getting away with shoddy building work and raise the game of housebuilders across the sector. Homebuyers will be able to access help when they need it, so disputes can be resolved faster and people can get the compensation they deserve.”

Help to Buy

Developers wishing to be part of the government’s Help to Buy scheme will need to put quality first, providing an assurance of higher standards.

What the scheme means for homebuyers

Currently, there are no options to complain about substandard work and hold developers to account. Ultimately, this scheme is designed to protect new homeowners from rogue developers and inadequate building work, giving them an opportunity to raise a dispute.

Decisions are yet to be taken around maximum awards for compensation, however the government response states that it would want to see a New Homes Ombudsman make awards up to £50,000. With regard to the time allowed for complaints to be issued, the documentation proposes that this be set at two years in line with current liability periods.

Following the establishment of a board and permanent chair, it is hoped the scheme could be in place in early 2021 along with an expected transition period for developers to join.

Further information

It is intended that the scheme will be UK-wide and cater for both small and large property developers.

Information will also be provided by the scheme to deliver guidance on the process of buying a new home. This is in addition to demonstrable case studies and a Code of Practice to encompass the entire building and selling process and provide clarity.

This scheme is one of a number being put in place to raise standards across the housing industry. Other announced changes include; developing a new National Model Design Code; consulting on the Future Homes Standard to tackle climate change; and introducing a new Building Safety Regulator to bring fundamental change to the sector.

For more information, please see the Government’s website