Last Wednesday, The BBC’s Rip-Off Britain covered the story of Daniel Bruce and his neighbours. Having bought flats in a new building in Camden in 2019, they have been battling the developers, the building inspector and warranty provider to fix their structurally unsound home. Things are so bad, independent surveyors have recommended the demolition of the building. It’s a shocking but not unfamiliar tale of “nightmare new builds”.
The Secretary of State for Housing, Michael Gove, who was interviewed for the programme back in July, can be seen looking at the condition of the property with some incredulity. “We need to look at the whole process of building and selling properties…to make sure we have stronger consumer protection for people.” he said, and went on to use the old adage “...you get more consumer protection when you buy a washing machine than when you buy a new home”.
It’s a line we’ve been using here at the HomeOwners Alliance since we set up in 2012. And we’re fed up hearing it. We’ve been campaigning for Better New Build for years and have made a number of recommendations for reform. But little changes.
So it was frustrating to hear the Secretary of State’s glib response. Michael Gove has the power and influence to ensure that Britain builds quality homes and creates a system that systematically protects homeowners when things go wrong. So where is the progress?
To improve consumer redress for homebuyers the government passed legislation for a New Homes Ombudsman Scheme back in April 2022, but there is no sign of the statutory scheme that has been promised. To make even things worse, there are now multiple new build redress schemes in operation which continue to cause confusion.
And what about Daniel Bruce? We have learnt that in the 3 months since filming nothing has been done, despite statements read out from the structural warranty Acasta and Salus, the building control inspector. If this doesn’t prove the need for an overhaul of the building inspector regime (as has been done for taller buildings) and a review of the warranty system we don’t know what more evidence Mr Gove needs.
What is also apparent is the failings of the Financial Ombudsman Service (FOS) to investigate new build warranties when claims arise. In this case, they took the stance that the freeholder was responsible, so Acasta couldn’t be held responsible for the unreasonable delay in dealing with the claim.
Other new build homeowners have been in contact with HomeOwners Alliance saying that FOS does not deal with complaints against new build warranty providers. It is not on their list of complaints they deal with.
The HomeOwners Alliance has asked FOS for urgent clarification prior to the programme being released and have yet to receive a reply. We question whether the FOS is fit for purpose when it comes to dealing with new build insurance claims.
Paula Higgins, CEO of HomeOwners Alliance says,
“In the 10 years of campaigning for better new build, we see little change from the government and industry and it’s disheartening. Daniel has done a great job at raising awareness of the situation he is in, but his situation is the same. That doesn’t bode well for many more homeowners who will be suffering in silence and trapped in a new build nightmare through no fault of their own. And of course we cannot forget those who have and continue to suffer with cladding and safety issues.
We have had enough of sound bites and weak initiatives from government, such as legislation for a New Homes Ombudsman which has not been enacted. Therefore we call for the purchase of new homes to be included in the Consumer Rights Act 2015. The Consumer Rights Act gives people the legal right to get repaired or a refund for goods that are of unsatisfactory quality, unfit for purpose or not as described.
Daniel Bruce says:
"It's disappointing that despite Mr Gove's personal interest in our case and strong stance that our situation is unacceptable, months after his visit, he's not brought Prime and Acasta to justice for their apparent breaking of relevant laws and ensure we're made whole. Our situation results from extensive deregulation of the building industry; our homes are dangerous and uninsurable, so it's not unreasonable to expect the government to swiftly put things right and then ensure sufficient future regulation so this can't happen again."
Paula Higgins adds: “Whilst we are supportive of Labour’s ‘build build build’ pledge in order to address the shortage of housing, consumer protection must be strengthened to stop the endless cycle of nightmare new build stories.”
How will the Consumer Rights Act 2015 make things different? This Act covers the key consumer rights for contracts for goods, services and the law relating to unfair terms in consumer contracts. Unfortunately the contracts between the housebuilder and buyer are not covered by this legislation. A change would mean that new build owners could demand a refund or repair if their new homes are of satisfactory quality, fit for purpose and as advertised.
