Increased Accountability Measures Required In Construction Industry

Declining quality in newly built homes has prompted an industry think-tank to call for immediate changes to ensure new homeowners are not left abandoned to deal with their extensive snagging lists.

The report by the Social Market Foundation believes that home owners of new property should receive greater rights if there is a fault in their property.

The report highlights that customer satisfaction has declined significantly in recent years. Although only 53% of new home owners were completely satisfied with the quality and service of their home builders in 2012, the National New Home Customer Satisfaction Survey for 2018 has found that these figures have slipped to a mere 46%.

99% of new home owners also reported problems, snags and defects with at least one aspect of their home last year, with 69% finding more than five faults that required attention.

A major concern for home owners involved the difficulty in accessing redress for issues with systems being overly difficult to understand and navigate through and customers unclear on what their warranty actually covers.

Conscious that 80% of small housebuilders have left the market or been acquired by larger firms in the past thirty years, concerns were growing that larger building contractors have created weaker competition, monopolised the market which is leading to a lack of quality in new build homes.

In order to improve consumer power and hand more accountability back to the housebuilder, the Social Market Foundation report suggests that the UK should adopt a similar policy to that used in the Netherlands involving 5% of the property value being withheld from the developer until the snagging list has been resolved.

A compensation scheme for delayed repairs would also incentivise housebuilders to comply with their obligations and improve customer satisfaction.

It was also suggested that the government should do more to encourage expansion of small to medium sized housebuilders to improve competition within the housing market. Aiming to increase the minimum 10% small building sites was recommended as a way of achieving these aims.

In a bid to improve customer satisfaction, the report highlights the importance of greater transparency regarding warranties and the specifics of what they cover. Measuring housebuilders, their customer satisfaction results and total defects per home on previous builds were also suggestions to improve consumer power.

Samila Ali, author of the report, said: “Buying a new home is the biggest purchase most people will ever make, but the market doesn’t work well for many consumers. They should have more information about housebuilders and more power to push builders to fix problems with new homes.

“House builders should also face more competition: they’re not under enough pressure to provide the better, cheaper houses that consumers want. It’s too easy for them to sell homes that leave buyers unhappy while making large profits. A better market would push them to work harder and give their customers a better deal.”

James Brokenshire, Secretary of Housing and Local Communities, commented: “Where we need to, we will act to protect consumers and ensure the market rewards quality, consistency and customer service. I will consider the recommendations made with interest.”

Is there a growing monopoly in the new build construction sector? Will these recommendations improve the situation for home owners?

Find the full report here.

1 Comment

  • test

    My son (who works in construction) has recently moved into a newly built home.

    The builders went to considerable lengths to minimise snagging. But this resulted in considerable uncertainty and stress as to when competion would take place

    House builders should be required to deliver their products in good order AND by a fixed, contractual date

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