The New Homes Quality Board (NHQB) is an independent not-for-profit body which was established for the purposes of developing a new framework to oversee reforms in the build quality of new homes and the customer service provided by developers.
Its objectives are to deliver a consistently high standard of new home quality and service, and to strengthen complaints handling and redress for purchasers of new-build homes where these high standards are not achieved.
An interim board was established in May 2020 to oversee preliminary plans, with representatives from across the sector including consumer bodies, developers, providers of new home warranties, the lending industry, Homes England and independent members to tackle these issues.
In January 2021 the NHQB was formally constituted as a legal entity and the board members appointed to it.
Since then. significant progress has been made on the proposals to put in place a New Homes Ombudsman Service and develop a new industry code of practice- the New Homes Quality Code. These will be introduced over the coming months.
image supplied by Barratt Developments
Championing quality new homes & better consumer outcomes
The race to meet housing targets and high demand for new homes has rapidly accelerated since 2012. As volumes increase it is essential that build quality and customer service levels improve too. The NHQB aims to deliver a step change in how the house building industry operates and deals with customers.
We want to help housebuilding to become a modern, forward-thinking industry, and give confidence to customers when they purchase their new home.
The NHQB will oversee the creation and adoption of a comprehensive new industry code of practice, the New Homes Quality Code (NHQC), as well as the appointment of a New Homes Ombudsman Service (NHOS) to adjudicate complaints against the new code and provide independent and robust redress for new home buyers.
What we’re planning
The New Homes Quality Code will consolidate and improve on existing protections covering important aspects of the construction, inspection and sales process; while the New Homes Ombudsman Service will provide customers with timely access to fair and efficient redress.
The new arrangements will provide customers with more confidence in new build homes and will provide governments with the assurance that as they introduce policies to increase housing supply, the industry will be delivering high standards of quality, service and customer satisfaction.
Government has always made clear that it is expected that all of the new arrangements will be paid for by the house building industry. Access to the NHOS will be free to consumers through a number of routes including a new consumer facing portal that is being developed as part of the innovation partnership with the provider of the New Homes Ombudsman Service.
“It’s crucial developers show more responsibility for the quality of their work while also acknowledging when things go wrong – this helps give vital confidence to buyers, especially at a time of general uncertainty.”
The New Homes Quality Code
The New Homes Quality Code, that is currently being finalised following an open public consultation in early summer, will be provided to industry and wider stakeholders before Christmas.
It introduces a broad range of additional requirements for developers. These aim to fill the gaps for eligible customers in current protections and ensure that every aspect of a new home purchase, from when a customer walks into a sales office, through to two years after occupation of the home is covered including;
The new Code:
- Protects vulnerable customers, prohibits high pressure selling; requires any deposits the customer pays to their developer to be protected
- Requires the developer to provide all relevant information about the home during the sales process – including its tenure and any future management or service charges – that allows them to make an informed decision about their purchase
- Sets out requirements for a fair reservation agreement, including a ‘cooling off’ period; and sales contract requirements
- Allows customer to have a suitably qualified inspector carry out a pre-completion inspection of their home on their behalf
- Specifies that a home must be ‘complete’, preventing developers paying customers to move into a new home early.
- Crucially, and to address the biggest gap in the existing arrangements, the New Homes Quality Code requires developers to have an effective after care service in place to deal with any issues or ‘snagging’ problems customers have with their new home; and a robust complaints process that responds to customers concerns in a timely manner and to their satisfaction, keeping them informed at set times throughout. If a customer is not satisfied with how any complaint they have made has been dealt with, they can refer themselves to the independent New Homes Ombudsman Service
The consultation on the New Homes Quality Code received over 250 responses from consumers and a wide variety of stakeholders. These have resulted in over 400 detailed changes to the version of the code that was consulted on. The final version will be issued along with detailed training aids for industry.
“Consumers rightly expect new homes to be top quality – and to get great customer service too. The ombudsman will be an independent customer guardian, making sure buyers get proper redress if they’ve been sold a shoddy home or suffer from poor customer service.
“A new home is the biggest purchase most of us will ever make and So it is right that we put the strongest protections in place to protect consumers buying a new home.”
“The ombudsman and the powerful New Homes Quality Code will drive up the quality of new homes and improve the service housebuilders provide to their customers.
“The appointment of the Ombudsman is a major milestone. It comes after a six-month long competitive procurement process that was run on public procurement principles. The Dispute Service proved that it had the necessary skills and experience to deliver an effective, efficient and robust New Homes Ombudsman Service. They have a clear plan to create the powerful independent body that new home buyers deserve.”
The New Homes Ombudsman Service
Once in place, the NHOS will provide robust independent redress for new build buyers who have issues with their new home or developers. Customers buying a new home who are not happy with the finish of their new home or the service provided by their builder will be able to approach the NHOS if their complaint has not been dealt with to their satisfaction by their developer. The NHOS, whose decisions will be entirely independent of the NHQB and of industry, will consider the evidence provided by the customer and the developer to reach an adjudication.
Following a detailed tender and procurement process, the NHQB selected The Dispute Service Ltd as its preferred partner to create the NHOS. The NHQB is now working with The Dispute Service to develop the necessary processes such that a NHOS can be launched in the New Year. The NHQB and the Dispute Service will work with the Ombudsman Association to ensure all its processes are incorporated as the NHOS is developed.
Procurement of the NHOS
The Dispute Service has been selected after a tender process run in line with the standards of a full public procurement process. The selection panel, made up of NHQB board members independent of the house building industry, undertook a detailed process lasting six months, to select The Dispute Service from an extremely high-quality field of interested parties.
The competitive process attracted some very experienced and professional tenderers which made the final selection very complex. All of the tenderers who reached the final stage demonstrated that they could perform the NHOS role.
The evaluation panel individually and carefully evaluated the method statements of each tenderer against a predefined scoring matrix and awarded a weighted score against a number of pre-set criteria before a weighting for the prices submitted by each tender were also fed into the overall evaluated scores. Each of the tenderers demonstrated strengths across a range of areas but ultimately The Dispute Service secured the highest score when each of the factors and each of the evaluation panels judgements were combined
The panel were particularly impressed by The Dispute Service’s forward thinking and track record of establishing dispute resolution services in different areas of operation and different parts of the country. It felt that The Dispute Service demonstrated that it had the capacity, requisite skills and technical ability to be able to work with the NHQB to develop an effective NHOS for consumers. In particular, the board welcomed their digital solutions proposals, that will be key to ensuring consumers can engage easily and effectively with the new service.
“The Dispute Service is delighted to have been selected by NHQB to operate the new Homes Ombudsman Service. We are a not-for-profit company which has its roots in dealing with tenancy deposit disputes and in the last 14 years we have completed over 160,000 adjudications. In this time, we have developed a range of innovative digital solutions designed to make it easier for consumers to raise complaints and for their complaint and supporting evidence to be easily uploaded into our complaints platform, which is accessible to all parties to a dispute. Through this we have been able to improve the transparency of our adjudication work by ensuring that all parties to a complaint can see the evidence that has been presented to us. We have also worked hard to increase the number of complaints we resolve through our mediation and conciliation work, leading to speedier outcomes for consumers”.
“We know that there are issues in the new homes industry and we are excited by the opportunity to build a robust and independent redress service for consumers to address their legitimate complaints. We are also committed to working closely with the NHQB and the industry to roll out the New Homes Quality Code and to play a key part in helping to raise standards in the new build industry across the UK.”
The Ombudsman designate will be Alison MacDougall, who is currently Group Director of Resolution at The Dispute Service where she heads up the team of adjudicators and resolution executives dealing with disputes between landlords and tenants. A law graduate, she has had extensive experience in dispute resolution and ombudsman activities. She helped to establish the Office of the Independent Adjudicator for Higher Education where she dealt with student complaints about higher education providers. She was also a senior investigator at the Police Complaints Authority dealing with serious complaints; including deaths in police custody, and has also worked at the Parliamentary and Health Services Ombudsman.
“I am delighted to support this new body which will champion good quality homes and give much needed peace of mind for homebuyers with a strong regulator to help them if things go wrong.”
Why is the New Homes Ombudsman Service (NHOS) being established?
The establishment of a NHOS was the number one recommendation made by the All-Party Parliamentary Group for Excellence in the Built Environment in its report More homes fewer complaints in 2016 that focussed on the well-publicised and high-profile quality and redress issues experienced by customers of new build homes.
In 2017 the then Secretary of State Sajid Javid announced that the Government wanted to see the introduction of a New Homes Ombudsman.
The NHOS will provide customers with access to fair and efficient redress as well as more confidence in new build homes, and will provide Governments with the assurance that as they introduce policies to increase housing supply, the industry will be delivering high standards of quality, service and customer satisfaction.
When will consumers be covered by the New Homes Quality Code (NHQC) and New Homes Ombudsman Service (NHOS)?
The NHQB is currently in the process of finalising the NHQC and putting in place the NHOS.
The draft NHQC was consulted on over Summer and a final version will be published before the end of the year.
Following an extensive procurement process the NHQB has now selected a preferred partner who it will now work with – in line with Ombudsman Association requirements – to develop and activate the NHOS.
Developers will be expected to start to register with the NHQB in Q1 of 2022
Once registered the NHQB will work with individual companies to ensure they are ready to adhere to the requirements of the NHQC. Once they are, the developer will be activated and all customers reserving new homes from that point will be covered by the requirements of the NHQC and have access to the NHOS.
All builders will be expected to be registered with the NHQB by the end of 2022.
I’m in the process of buying, how will this affect me?
Once the New Homes Ombudsman Service (NHOS) is in place, there will be a transition period during which time developers will be asked to sign up to the new arrangement. You will not be able to access the NHOS until your developer has registered with the NHQB and signed up to the new arrangements. However, please be reassured that you will still be protected by the existing redress process and consumer codes still in place if you reserve before the new arrangements are in place.
Is the NHQB independent?
Yes. The NHQB is an independent, not for profit stand-alone legal entity. It an independent chair and deputy chair and the board comprises representatives with experience from a range of sectors including consumer bodies, developers, providers of new home warranties and the lending industry; there are also two independent board members; whilst Homes England attend the board in a representative capacity. Constitutional safeguards have been put in place to ensure the board has a majority of non-industry representatives on it, which means that builders can’t control it.
A process is currently underway to recruit two more independent board members and a new independent chair.
Will the code make any difference? How do you know it is adequate?
We firmly believe that the new code and the broader framework including the appointment of a NHOS will deliver a step change in industry behaviours.
The consultation on the New Homes Quality Code received over 250 responses from consumers and a wide variety of stakeholders. These have resulted in over 400 detailed changes to the version of the code that was consulted on.
The draft of the Code that was put out for consultation was itself a result of some four years of engagement with a broad range of stakeholders including existing Consumer Code bodies, consumers, governments, lenders, warranty providers, house builders, and industry and sector bodies.
The final version will be issued alongside detailed guidance and training for industry in December.
In addition to changes made as a result of the consultation the NHQB has also committed to undertake detailed review work to understand how the Code can be expanded into additional areas and so benefit even more new build customers in the future. Whilst it was not felt that at this stage expanding the Code to cover investor buyers and shared ownership homes for example – as set out in the Building Safety Bill – could be agreed without delaying the introduction of the new arrangements, these are areas that the NHQB will undertake detailed assessment work on as soon as the new arrangements are in place.
The New Homes Quality Code, introduces a broad range of additional requirements for developers. These aim to fill the gaps in current protections and ensure that every aspect of a new home purchase, from when a customer walks into a sales office, through to two years after the purchase of the home is covered. The Code:
- Protects vulnerable customers, prohibits high pressure selling; requires any deposits the customer pays to their builder to be protected.
- Requires the developer to provide all relevant information about the home during the sales process – including its tenure and any future management or service charges – that allows them to make an informed decision about their purchase.
- Sets out requirements for a fair reservation agreement, including a ‘cooling off’ period; and sales contract requirements.
- Allows customers to have a professional carry out a pre-completion inspection of their home on their behalf.
- Specifies that a home must be ‘complete’, preventing builders paying customers to move into a new home early.
- Crucially, and to address the biggest gap in the existing arrangements, the New Homes Quality Code requires builders to have an effective after care service in place to deal with any issues or ‘snagging’ problems customers have with their new home; and a robust complaints process that responds to customers concerns in a timely manner and to their satisfaction, keeping them informed at set times throughout. If a customer is not satisfied with how any complaint they have made has been dealt with, they can refer their complaint to the independent New Homes Ombudsman Service
How does this relate to the Building Safety Bill?
The NHQB has worked with a broad range of stakeholders, including the UK Government and the devolved governments in Scotland and Wales to develop its proposals. The NHQB has developed proposals that can broadly align with the relevant sections of the emerging Building Safety Bill but are not identical to it. The ambition is that the new framework, including the NHOS, can be applied across the UK so providing greatly enhanced and consistent consumer protection. Ultimately, it will be up to the Secretary of State to decide how the powers provided by the Bill are used by Government to deliver their stated objectives and that is a separate matter to be decided by them.
What is the structure of the new framework?
The NHQB will oversee all the arrangements moving forward, including the appointment and subsequent ongoing monitoring of a New Homes Ombudsman Service (NHOS).
Underneath the NHQB will sit advisory committees which will include consumer, technical, public authorities and financial services specialists and a code council.
The NHQB will be responsible for publishing data on the performance of the industry; and working with the industry to ensure it is aware of its responsibilities under the new arrangements and in a position to deliver against them. (It is envisaged additional support will be provided for SME builders.) This will include training support to enable developers to be able to train their staff.
A new industry code of practice – the New Homes Quality Code – sits at the centre of the new arrangements. It builds on the existing consumer codes but puts much more responsibility and requirements on developers. In particular it covers post occupation and sets out how developers have to deal with any issues buyers have with their new homes in the first two years.
The NHQB will set up monitoring processes to ensure developers are complying by the requirements of the New Homes Quality Code.
Who will fund the new arrangements?
Government has made clear throughout that it expects that all the new arrangements will be paid for by the house building industry. Access to the NHOS will be free to consumers, with access being through a new portal.
The NHQB will charge developers an annual registration fee; whilst there will be a levy charged on every new home built.
There will be an additional fee for developers for certain referrals to the New Homes Ombudsman Service (NHOS).
Exact funding arrangements are being finalised
Where can I find out more information?
We will be releasing more information to consumers about how to access the benefits of the New Homes Ombudsman Service (NHOS) in due course, and will publish the New Homes Quality Code in the coming weeks.
“Ensuring new-build owners have the right to redress is a vital protection for anyone looking to buy a new property. The new Code, in conjunction with the role of the New Homes Ombudsman, aims to improve build quality and customer service from developers and should be a really positive move for the sector, lenders and customers.”
Natalie Elphicke OBE
BCRS & Regulator of Social Housing
The following also attend the board as representative, (non-voting) members;
Jackie Bennett OBE
Jackie Bennett OBE is a Senior Advisor at UK Finance, supporting the associations mortgage and housing work. Jackie has over 20 years’ experience in the mortgage industry, having worked in a variety of roles including Head of Policy at the Council of Mortgage Lenders and Deputy Head of Compliance at The Northview Group. Jackie will represent the mortgage industry on the Board.
Joanne Casey is Managing Director at construction group Mactaggart and Mickel and Managing Director of their Homes England division. Joanne is also a Board Director at Homes for Scotland and an Honorary Vice President of the Institute for Customer Service. Joanne will represent medium sized builders on the Board.
Gillian Cooper is Head of Energy Policy at Citizen’s Advice and has been a consumer advocate in the energy sector for over 15 years. As a member of the Board, Gillian will represent consumers.
Barry Cummins works for Homes England as National Development Director and will represent the organisation on the Board. Barry has over 25 years’ experience in the housing industry.
Jennie Daly has been Director of Taylor Wimpey since 2018 and also holds the role of Group Operations Director, responsible for land, planning, design and technical, production and supply chain functions. Jennie has over 20 years’ experience in the house building industry, and will represent large PLC builders on the Board.
Katy Jordan is a real estate professional with over 25 years’ experience in residential developments. Currently, Katy is Managing Director of Storey Homes and has previously worked as a quantity surveyor. Katy will represent small builders on the Board.
Paul Smee is Chair of BCRS and Deputy Chair of the Regulator of Social Housing.
Nicholas Boys Smith
Nicholas Boys-Smith is the founding Director of Create Streets, a social enterprise encouraging urban homes in terraced streets, not multi-storey buildings. Alongside this, Nicholas has been appointed by the Government to establish a quango responsible for driving up housing design standards and was co-chair of the Building Better, Building Beautiful Commission.
Steve Wood is CEO of NHBC (National House Building Council), having joined the Board in July 2017. Steve has worked in the insurance industry for 40 years and his previous roles include CEO of Paymentshield (part of Towergate Insurance) and UK Managing Director at Ecclesiastical Insurance. Steve will represent warranty providers on the board.
Natalie Elphicke OBE MP
Natalie Elphicke is a national specialist in complex housing policy who, prior to her election to Parliament in 2019, advised central and local government over a number of years. This has included as an expert adviser to the Ministry of Housing, Communities and Local Government (MHCLG) on the development of the national strategy for estate regeneration, as well as the influential independent Elphicke-House Report 2015 on the role of local authorities in housing supply, which re-set the direction of government policy in this area.
Natalie’s professional background is as a barrister, solicitor and a law firm partner, where, as a top ranked UK lawyer she had been described as “probably the best in the City” in her specialist area of housing finance. She has held senior non-executive board director roles for many years, including as Chair of audit and risk committees at FTSE-250 equivalent companies.
Natalie’s other interests include voluntary work at her local homeless shelter and as a founder member of the Housing & Finance Institute. She was awarded an OBE in the Queen’s Birthday Honours in 2015 for her services to housing.
In view of her housing expertise, Natalie was appointed as the independent New Homes Quality Champion in summer 2019 and has overseen the strategic development and then implementation of the New Homes Quality Board and New Homes Ombudsman.
Douglas Cochrane retired from Lloyds Banking Group (LBG) in July 2020, following a 41-year career during which he held a number of senior positions. Latterly, Douglas was of Head of Housing Development where he was responsible for the Banks retail relationships with the house building and affordable housing sectors.
Alongside this, Douglas was an active member of NHBC’s Scottish Committee serving two terms on the National Council. Douglas chaired the Council of Mortgage Lenders (CML), subsequently UK Finance, Scottish Mortgage Committee on two occasions. A regular contributor and advisor on housing matters, Douglas participates in housing policy debates and is a consultant to the Mortgage Advice Bureau (MAB) Group .
Douglas has been leading on the development of the New Homes Quality Code.
Steve Turner is Director of Communications for the Home Builders Federation (HBF). Steve qualified as a Civil Engineer before moving into journalism and then communications. Steve has led on HBF’s work with regards to putting a New Homes Ombundsman Service (NHOS) in place since 2016
These new arrangements will undoubtably pose some challenges for the industry as they are introduced in the coming months. However, we fully support the proposals being brought forward and are committed to helping our members make the necessary changes to facilitate them. The industry is committed to providing high quality new homes and excellent customer service, and whilst challenging, this new framework will ensure progress is maintained.