Consumer protection for new house buyers

16th October 2017

Alok Sharma responds to an Adjournment debate on consumer protection for new house buyers and the NHBC.

I congratulate my hon. Friend the Member for St Austell and Newquay (Steve Double) on securing this debate on consumer protection for new home buyers and the National House Building Council. We have had some powerful interventions from colleagues, and I am extremely pleased that my hon. Friend has been working so hard to assist his constituents. It is good to know that the NHBC has now responded, and I wish him well in taking forward that individual case.

On house building in general, earlier this year we published our housing White Paper, which highlights the need to fix our broken housing market and sets out how we will tackle this. Of course, just building more new homes is not good enough. We expect all house builders to deliver good quality housing on time and to treat new house buyers fairly. My hon. Friend talked about homes being in the right place—I absolutely agree—and the important role that local people play in neighbourhood plans and deciding where development goes in an area.

As my hon. Friend pointed out, delivering good quality homes does not always happen in the sector. He referred to the Home Builders Federation survey, so perhaps I can elaborate and share some further statistics from it. The latest HBF survey concludes that 98% of new homeowners report problems to the builder. Of course, some will be snagging issues, but although some problems may be hard to prevent initially, 38% of buyers had more problems than they expected. A staggering 25% of buyers reported more than 16 problems. The latest survey shows that 84% of new homebuyers would recommend their builder to a friend. That figure has fallen steadily from 90% in the past four years. It means that 16% of new homebuyers do not think that they have a quality product. In any other market, that would spell the end of the most poorly performing companies. That has rarely been the case in the house building sector.

Customer satisfaction is important to many home builders, but others need to make it a priority. My hon. Friend the Member for Bury St Edmunds (Jo Churchill) made a pertinent point when she talked about the vertical fragmentation of the industry. As I have said to some of the major house builders, perhaps the industry needs to think more about employing people directly so that they have much more control of the quality of what is built, as well looking at modern methods of construction.

After all, a home is not just one of the largest financial purchases, but one of the largest emotional commitments that people make. People bring up their families there, and it has treasured memories for many.

Alongside the actions the Government are taking, it is clear that home builders need to step up and make quality and design a priority. That includes ensuring that, where something goes wrong, house builders and warranty providers fulfil their obligations to put things right.

There are existing mechanisms for redress, such as the consumer code for home builders and the independent resolution service, but they can be complex, and, as my hon. Friend the Member for St Austell and Newquay said, they do not always provide full coverage. As he also noted, most new builds are covered by a warranty provider such as the NHBC 10-year Buildmark warranty. However, as he said, the cover offered by warranty providers varies and does not always match consumer expectations.

The all-party parliamentary group for excellence in the built environment produced a report called “More homes, fewer complaints”. It made a series of recommendations to improve quality and redress. I have read the report and it is a very good piece of work, and we are seriously considering the points that have been raised.

I have been encouraged by the fact that the industry will respond formally to the APPG’s report. The HBF has set up a working group and it will take forward action to provide better information to customers, simplify the legal process and create a clearer and simpler process for signing off new homes as complete. As some Members will know, the new working group has commissioned an independent report on consumer redress for new homebuyers, which is due to be published in the coming weeks. We expect that the report will demonstrate that there are gaps in the current redress arrangements and perhaps suggest some remedies. I will review the independent report, with a view to ensuring that improved redress arrangements are introduced to provide greater protection to consumers on a broad range of issues, with a greater degree of independence from the industry. I have heard the calls for a new homes ombudsman, which have been repeated a number of times in the House over the past few weeks, and I can tell hon. Members that I am considering that option very seriously indeed.

My hon. Friend the Member for St Austell and Newquay also talked about design, as did other colleagues, and he is absolutely right: we need to improve the design quality of new build homes. The Government recognise that good design is an integral part of ensuring that we are building homes that people want to live in. We have put in place a robust framework that promotes and supports high-quality design. We want to create places, buildings and spaces that work well for everyone.

 
 
When my hon. Friend is considering design, will he also consider the space standards, which we have discussed before? It is important that families have homes that they can actually live in—that is, feed themselves in, relax in and then sleep in.
 
 
My hon. Friend makes an important point about space standards and the fact that we need spaces in our homes to do all the things that we want to as families. Houses in our country are generally much smaller than in some of our neighbouring countries in Europe, so she makes an important point.

I have talked about the importance of planning guidance and good design and about ensuring that advice on the planning processes and tools that local planning authorities can use to help to achieve that are in place. My hon. Friend the Member for Henley (John Howell), who has been a great champion of neighbourhood planning, talked about the importance of neighbourhood plans, which I think are incredibly important. We want to strengthen the national planning policy framework to introduce an expectation that local and neighbourhood plans and development plan documents should set out clear design expectations.

Last week I attended an event hosted by the Royal Institute of British Architects, which brought together a group of experts from across the housing industry and Government. The aim of the event was to underline the Government’s commitment to design and to provide the sector with an opportunity to share its ideas with us for taking forward our ambition to improve the design quality of homes and places.

In closing, I would like to thank my hon. Friend the Member for St Austell and Newquay again for securing this valuable debate, for his ongoing contribution to consumer protection for his constituents and for making the case for other homebuyers. As I have said, the Government want to see more homes built quickly, but crucially I want that development to take place with the engagement of local communities and with a focus on high quality and design. We will continue to work with industry, communities, developers and all those with a clear interest in consumer protection of new homes to ensure that, as the quantity and quality of new homes increase, consumer protection increases also.

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