Protection for Homebuyers

Debate between Kate Green and Helen Goodman

Thursday 13th December 2018 Westminster Hall

[Kate Green]

I absolutely agree. In fact, my hon. Friend’s constituents have been posting on Facebook about some of their experiences with Persimmon, which echo those of my constituents. She makes an important point about the impact these things have on people’s emotional wellbeing. Some of the homebuyers who have contacted me in recent weeks have talked about being forced to take time off work because of mental health problems created by the stress they are experiencing.

As my hon. Friend said, buying a new house is a life-changing moment for many people. In and of itself, it is a big, emotional, stressful experience and is often accompanied by other big life changes, such as leaving the family home for the first time or an enlargement to the family. It is important to acknowledge that that stress is significant, often lasts for a protracted period of time and is exacerbated by the reluctance of developers to engage with people’s problems.

Despite all that, house purchase is one of the areas of consumer law that is least protected in consumer legislation. Property is exempt from the Sale and Supply of Goods Act 1994, meaning that if it fails to live up to expectations, there is no right to reject it and demand a refund. The role of building control inspectors is to ensure that technical standards are met. They are not responsible for monitoring build quality.

What is more, the person carrying out the work—in other words, the developer—has the choice of which building control body to use to carry out the inspection. A confusing landscape of codes of practice, warranty schemes and even, as was reported on the “Victoria Derbyshire” programme, attempts to gag buyers from going public leave people at the mercy of the developers and warranty companies. All in all, as the HomeOwners Alliance says, people get less protection when buying a house than they do when buying a toaster.

What needs to change? The all-party parliamentary group for excellence in the built environment made a series of recommendations—I know the Minister will be familiar with them—in an extremely well researched and comprehensive report in 2016. Earlier this year, the Government undertook a much-needed public consultation on strengthening rights and protections for homebuyers. I welcome those initiatives, and I am glad the Government have indicated their support for the introduction of a new homes ombudsman, but there is no detail as yet or timescale for implementing that.

In the meantime, the multiplicity of codes, warranties and complaints systems makes things very complicated for homebuyers. The Home Builders Federation told me that it is working on a series of industry-wide reforms, including preparing for the introduction of an ombudsman scheme, a standard sales contract, a single code of practice and a minimum set of warranty standards. It hopes to work with mortgage providers so that compliance would be required for a purchaser to obtain a mortgage. That is all well and good, but I just do not think people will be reassured simply by a voluntary, industry-led approach. The Government need to be much more precise and prescriptive.

The HomeOwners Alliance and the all-party group have called for a number of measures that would significantly help to improve the situation for homebuyers. In her response, I hope the Minister will specifically address them. First, they propose a 2.5% snagging retention so that new-build homebuyers retain 2.5% of the cost of the house, which would be held back for six months, until the end of the defects period, where it would be paid over only if the defects have been corrected. That would create a powerful incentive for builders to sort out problems.

The HomeOwners Alliance and the all-party group propose a right for homebuyers to inspect their new home before moving in, without prejudice and with the right to bring their own surveyor or snagger. Builders selling their properties off plan will often refuse to let buyers inspect the property before they take the keys. That practice is unacceptable and should be ended.

Standardised contracts should include the full plan and specification as standard, rather than them being hidden away in an office. The contracts must include standardised terms and have more detailed specification so that builders cannot swap for cheaper materials. Consumer groups should be involved in the development of those contracts, otherwise the fear is that they will continue to be stacked in favour of the developer.

A focus on quality is much needed across the sector through the adoption of International Organisation for Standardisation standards. A review of the inspection and warranty regimes is required to give consumers reassurance that buildings meet standards set by Government and greater clarity about what is covered. Buyers believe their warranties will protect them for up to 10 years, but after the first two years, warranties typically cover only serious structural defects. Again and again in preparing for this debate, I heard reports of warranty companies refusing to take responsibility for sorting problems.

We also need minimum standards for compliance inspections. A single homebuyers code should replace the many different codes, which are so confusing for homeowners. The new ombudsman, funded by the industry—I think that is the Government’s intention—should be the guardian of the code. It should cover after-sales service as well as the quality of the building work.

Developers should not be able to recommend individual solicitors. That point was raised a few moments ago by my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders). Solicitors should be working for the homebuyer, but if they get most of their business via the developer, that naturally creates a conflict of interest.

[Helen Goodman (Bishop Auckland) (Lab)]

I am pleased that my hon. Friend has secured this debate. Does she not think that it might be an idea for the Law Society to look into the behaviour of solicitors who put themselves in the position of having that serious conflict of interest, which is so detrimental to our constituents?

[Kate Green]

I absolutely agree, and I hope the Law Society will take note of that suggestion.

The final suggestion for improvement and reform is for prospective homebuyers to have more up-front information about the property they are purchasing, including whether properties are leasehold or freehold and the implications of buying leasehold property. We have all heard reports of rip-off service charges and ground rents that rise every year affecting leaseholders in our constituencies. The Government need to act to address that scandal. There should be a standardised key facts document, as there is in financial services, such as for mortgages. Also, better information needs to be handed to the consumer once the property has been completed. I hope that the Minister will respond in detail to those suggestions.

Before I conclude, I should say that no debate in this House right now would be complete without a reference to Brexit. Fundamentally, the problems I have described come down to corporate greed, but they have been exacerbated by pressure to build the new homes needed to meet Government targets, which the construction industry is struggling to cope with. Poor quality workmanship has been attributed in part to being forced to rely on inexperienced, unqualified labour.

The Construction Industry Training Board tells me that, in response to the shortage of skilled workers, many developers are relying on EU workers to fill gaps in their sector, including electricians, carpenters and bricklayers. Those are skilled trades, and investment in upskilling the domestic workforce to meet demand is imperative. However, were we simply to turn off the tap on EU labour, the pressures that the industry faces would only increase.

We are still waiting for the Government’s immigration White Paper, although I was pleased to hear the Leader of the House promise in business questions this morning that we would see it next week. There are particular worries in this sector, not least because of the reliance on self-employed labour, yet there is a real lack of information about how the Government’s post-Brexit immigration system will work for self-employed workers. Will there, for example, be the possibility of third-party sponsorship schemes to enable such skilled tradespeople to continue to come in and provide labour in our construction sector? I urge the Minister to press her Home Office colleagues to ensure that the immigration policy that it introduces meets the needs of this crucial sector.

This House cannot sit by while so many of our constituents face such great cost, stress and disappointment when making such a significant investment. The industry needs to get its house in order, and the Government have a responsibility to ensure that it does so. The Minister must tell us exactly what steps she will take to protect our constituents from seeing their dream home become a nightmare. I look forward to her response.

Myanmar: Rohingya Minority

Debate between Kate Green and Helen Goodman

Monday 16th April 2018 Westminster Hall

[Helen Goodman]

I am sorry, but I do not think it is acceptable to send four people. My hon. Friend the Member for Warrington North pointed out that 13 women’s centres have been set out and that the British effort can help 10,000 people. We have that resource for a purpose; let us now deploy it in significant numbers, because it will make a significant difference not just in helping people to cope with this trauma, but in bringing to justice those who perpetrated the crimes and those who ordered them. It is central to that. My hon. Friend said that we should learn the lessons, but we will not get people in other wars to learn the lessons unless, on previous occasions, those responsible have been brought to book. We can bring them to book only by putting in the resource to secure the testimony. I could not urge the Minister more strongly than I do now to increase that resource.

[Kate Green]

One of the lessons of previous conflicts is the very long-tail implications for people’s mental health. The trauma does not end with the crisis, but sits with them for decades afterwards. Does my hon. Friend agree that it would be useful to know whether our Government can help to train partners on the ground to provide that long-term mental health and psychotherapeutic support as well?

[Helen Goodman]

I think that is what the Government are doing, but given that we have the resource, we should deploy it on a much greater scale.

My hon. Friend the Member for Manchester, Gorton (Afzal Khan) spoke about the CHOGM conference this week. CHOGM is an opportunity for Ministers to do two things: encourage our Commonwealth partners to put money toward the $951 million and build support for stronger action in the UN. I would like to know what is going to happen at CHOGM this week to strengthen that process.

Last week, the shadow Foreign Secretary and I went to New York and had some meetings at the UN. We saw the person on the Myanmar desk, and I understood from her that the UN Security Council itself intends a visit to the region. That should be useful, because it should be an opportunity to build, among a wider group of nations, some sense of the enormity and seriousness of the crisis and the reasons we want it to go up the UN agenda. The UN secretariat also explained to us that the UN is trying to appoint a special envoy.

One block to progress has been the fact that the Chinese have regarded this as an internal matter in Myanmar, not an international crisis. That seems somewhat incredible to me, when almost 1 million people have been forced over the border into Bangladesh. I hope the British Government are challenging the Chinese at both ministerial and official level on that interpretation of what is going on. It is not really a credible posture.

[Phil Wilson in the Chair]

Another opportunity for multilateral action is represented by the European Union. My understanding is that, while we are having this debate, there is a meeting of European Union Foreign Ministers in Brussels. I do not know which of the Minister’s colleagues is in Brussels, but it would be interesting to know whether this matter is on the agenda and what progress he anticipates in strengthening the will to take action among European colleagues. Of course, Europe has imposed sanctions, but we need the support of our European colleagues in the United Nations to raise this to a new level.

Turning to what else we can do multilaterally with our colleagues, we have debated the use of sanctions. My hon. Friend the Member for Tower Hamlets—