The Government has now published a summary of the responses received to its consultation on strengthening consumer redress in the housing market. The main points to note for developers are:
- The consultation has led to the Government believing that the number of redress schemes operating in the new build sector has created an unacceptable variance of standards, and that a single New Homes Ombudsman could solve these issues.
- The Government is proposing to set up a Housing Complaints Resolution Service to provide a single point of access to offer redress and alternative dispute resolution in housing. The new service would cover buyers of new build homes, as well as tenants and leaseholders.
- Legislation will be enacted to establish a New Homes Ombudsman.
- The Government will introduce legislation to require developers of new build homes to belong to the New Homes Ombudsman scheme.
- The New Homes Ombudsman would charge developers to ensure that the service is free of charge to plot buyers.
- The Government intends to strengthen protection for plot buyers in the first two years after purchase and have a standard level of protection for all new home buyers.
- The Government intends to work with housebuilders, warranty providers and consumers to create an agreed single consumer Code of Practice which would be used by the New Homes Ombudsman to adjudicate against. The code will ensure that there are clear expectations for accessibility, transparency, timeliness and sanctions in terms of handling complaints.
- The Government will consult on the details of the legislation to set up the New Homes Ombudsman. The consultation will look at the approval mechanisms and standards that the New Homes Ombudsman must meet. It will also look at whether a Code of Practice for developers should also be underpinned by legislation.
Whilst the New Homes Ombudsman is being set up, the government wants to establish a voluntary New Homes Ombudsman. This ombudsman will:
- Free to the consumer and funded by industry;
- Independent from the organisations the ombudsman will investigate;
- Fair in dealing with disputes;
- Open and transparent and have public accountability through regular reporting; and
- Have powers to hold developers to account.
In the 2018 Budget, the Government announced that a new Help to Buy Equity Loan scheme would run for two years from April 2021 before closing in March 2023. The Government intends that housing developers must belong to the New Homes Ombudsman to participate in the new Help to Buy Scheme.
If you are affected by any of the above issues or would like further information and advice, please contact Isabel Alderton-Sell.