New Build Homes

Lord Wharton of Yarm Excerpts

Wednesday 2nd December 2015 Commons Chamber

[The Parliamentary Under-Secretary of State for Communities and Local Government (James Wharton)]

I congratulate my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) on securing this debate about the protections for purchasers of new build homes. I know that is a matter of concern to a number of hon. Members, and I have personally discussed it previously here in the House, as she recognised in her comments.

Homeowners rightly expect their homes to be built to high standards and to be high quality. I understand that things do not always go right when buying a new home, and it can then be disappointing, time consuming, stressful and expensive to get things put right. I was concerned to hear about the experiences of my hon. Friend’s constituents. I cannot comment on particular cases, but I am sure the builder concerned will reflect on this debate in how they respond to the situation she described.

The quality of build and compliance with regulatory requirements or standards required under any warranty are the primary responsibility of the builder. There are protections in place, which I will describe, but the industry has to take responsibility for the quality of what it builds. The warranty provides an important protection. If a warranty is in place, the homeowner can contact the warranty provider. Most warranties, such as the NHBC Buildmark, the LABC—local authority build control—warranty and the Premier Guarantee warranty, last for 10 years from the completion of the building works. As my hon. Friend said, in the first two years after completion the builder remains responsible for righting defects caused by breaches of the technical requirements covered by the warranty. The warranty provider will try to get the builder to carry out any necessary work or, in some cases, arrange for work to be carried out themselves. In years three to 10 from the completion of the building work, the warranty provides insurance cover against the cost of repairing defined sorts of defects covered by the scheme.

Warranties are not compulsory for new homes, but the Department is aware that the majority of new homes are covered by a warranty such as the NHBC Buildmark. Mortgage lenders will also expect there to be a warranty in place. Out of all the homeowners covered by NHBC warranties, fewer than 5% need to make a claim under the warranty. Warranty providers also carry out their own inspections, which may be carried out by the building control body as an adjunct to building control inspections.

From what my hon. Friend says, it sounds as though the builder in the specific case she raises accepted responsibility for taking action, which is as it should be, but I fully accept the concerns about the time this has taken. She may wish to raise that with the builder and the warranty provider, if she has not already done so. As I have said, I am sure their attention will be drawn to, if it is not already focused on, the comments that she has made in the House this evening.

A homeowner may also be protected by the consumer code for home builders, an industry-led scheme that aims to give protection and rights to purchasers of new homes. The code applies to all homebuyers who reserve to buy a new or newly converted home, on or after 1 April 2010, built by a home builder registered with one of the supporting warranty bodies, such as the NHBC, the LABC and Premier Guarantee.

According to the code’s annual report for 2014, between 2010 and 2013, there were 57 cases referred to the code’s independent dispute resolution scheme of which 21 succeeded in part and two succeeded in full. Sanctions for homebuilders not adhering to the code could include financial penalties and suspension from the new home warranty providers’ registers. The code’s management board is undertaking a review to ensure that the code continues to meet the needs of homebuyers in terms of driving up industry standards and customer satisfaction in the new home-buying market. Again, I am sure that their attention will be drawn to the comments that my hon. Friend has made this evening and that can inform the process that is now being undertaken.

It may help if I explain the building control process. Building control systems can contribute to the quality of new homes. Building work, including new build, is subject to supervision by either the local authority building control service or by an approved inspector. In the case of new housing, it is mainly approved inspectors who inspect the work. Again, that was reflected in the speech of my hon. Friend. I should also point out that NHBC has separate corporate entities that carry out the building control function as an approved inspector and that provide warranties.

Building control can only ever be a spot-checking process and in no way removes the primary responsibility for ensuring work complies with the building regulations from the person carrying out the work. However, building control bodies are not clerks of works nor are they responsible for quality issues beyond what is required in the building regulations.

Building control bodies, both local authorities and approved inspectors, have a statutory duty to take all reasonable steps to ascertain that the relevant requirements of the building regulations have been complied with. Building control bodies carry out this duty by checking plans, by carrying out on-site inspections and by checking the validity of energy and water efficiency calculations and other relevant documents. Where there is a need to do so, building control bodies may carry out their own tests and take samples to check compliance.

Based on those processes, the building control body will come to a view on whether the work complies, although that cannot be a guarantee and it does not detract from the ultimate responsibility of the builder. Building control bodies provide advice and guidance throughout the building process on how to bring work up to compliance standards, and in most cases that is sufficient to ensure compliance with the building regulations on completion of the construction work. If an approved inspector is unsuccessful in getting compliance, they can revert the work to the local authority for enforcement action. If the local authority considers that there has been a breach of the building regulations, it can take formal enforcement action, including prosecution.

If anyone believes that a building control body has been negligent in carrying out its building control function, a complaint can be made to the local government ombudsman about local authorities and for approved inspectors to CICAIR Limited, the body designated by the Secretary of State to carry out his executive and administrative functions in respect of the approval and re-approval of approved inspectors.

The quality of new homes is an important issue. My hon. Friend has spoken eloquently about her concerns and is aware of the work of the all-party parliamentary group on excellence in the built environment, which is considering this issue.

I am pleased to see that those involved in the built environment have the opportunity to express their views on the quality of new homes as well as on how improvements can be made to ensure new houses are of high quality. In particular, NHBC’s submission to the group explains that it is undertaking a number of initiatives to help ensure that the quality of new homes continues to improve. These include introducing, in 2016, construction quality audits of sites under construction and registered with a Buildmark warranty.

These audits will involve NHBC’s inspection managers undertaking structured detailed audits of construction quality throughout the construction stages. The data collected will be analysed and used to provide feedback at industry and builder-specific levels in order to assist the industry in identifying opportunities for improvement including how this may be achieved.

Members have raised serious issues on this occasion and on others. The Government are concerned that standards are adhered to and look forward to the findings of the APPG to see what further work might be done to continue to improve the quality of new homes both by my Department and by others involved in the construction process.

My hon. Friend has raised some very important issues on behalf of her constituents this evening. I have certainly taken note of what she has said. I have no doubt that others, both those directly involved in some of the specific cases that she raised and those working more generally in this field, will be aware of the concerns that Members from across the House have brought to this place in recent times. We want to ensure that people can confidently buy new homes, and confidently make what is often the largest investment that they will ever make. She raised some important points in that regard and I will be happy to discuss issues with her as they progress and to work with her to ensure that her constituents and mine can have confidence in the systems that are in place and the protection that they should rightly be able to expect.

Question put and agreed to.