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New Build Homes

– in the House of Commons at 10:33 pm on 2nd December 2015.

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Motion made, and Question proposed, That this House do now adjourn.—(Julian Smith.)

Photo of Caroline Nokes Caroline Nokes Chair, Speaker's Advisory Committee on Works of Art, Chair, Speaker's Advisory Committee on Works of Art 10:35 pm, 2nd December 2015

I do not expect you to stay in the Chair for the whole of this Adjournment debate, Mr Speaker. You might be able to hear that I have a slightly croaky voice, so I will by necessity keep my remarks relatively brief.

I welcome the opportunity to raise this issue with the Under-Secretary of State for Communities and Local Government, my hon. Friend James Wharton. It has been a recurring theme over the past few months, but perhaps that is inevitable as the Government promote house building, and because the number of both starts and completions is up significantly. There are, therefore, more new build homes with the potential to provoke complaints. My right hon. Friend Mrs Miller led a similar debate in July, and my hon. Friend Oliver Colvile is chair of the all-party group on excellence in the built environment, which is conducting an inquiry into this very issue.

I will speak on behalf of one constituent in particular, but I will also refer to others, because, sadly, the problems tend not to happen in isolation. Test Valley borough, which covers the greater part of my constituency, has followed what the Government have asked of local planning authorities. Over the past three years, Test Valley has had either the highest or the second highest number of housing completions in the whole of Hampshire, including the two cities of Southampton and Portsmouth. Test Valley has consistently been in the top 10 for housing completions across the whole of the south-east region. Unfortunately, and as one might expect, areas with high levels of house building can also have high levels of complaints from new residents.

Buying a new home is an enormous step for most people. It is exciting, challenging and stressful, probably in equal measure. I think it is true to say that moving home is one of the most stressful things that any individual, couple or family can go through, but it is also certainly exciting. How much more exciting can it be for someone than to move into a new build home that they can put their own mark on and that no one else has lived in?

My hon. Friend the Minister will be delighted to hear that, during the general election campaign earlier this year, I talked to residents at Abbotswood, a new 800-home development on the edge of Romsey. One resident invited me into her new home, which was bought with help from the Government’s Help to Buy scheme. She proudly showed me a photograph—it had pride of place in the sitting room—of her and her husband at Downing Street with my right hon. Friend the Prime Minister. For Lisa and her husband, there was nothing but joy in being in their own brand new home. Sadly, however, that is not the case for everyone. I requested this debate to highlight some of the challenges facing purchasers of new build properties when things do not go according to plan.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Health), Shadow DUP Spokesperson (Transport), Shadow DUP Spokesperson (Equality)

I am conscious of the hon. Lady’s voice, so I do want to keep her here for long. I understand that anybody who buys a new build house gets a 10-year warranty, but it is a very informal arrangement. Does she think it is time for the Government to formalise the legislation and make sure that buyers of new build homes are protected?

Photo of Caroline Nokes Caroline Nokes Chair, Speaker's Advisory Committee on Works of Art, Chair, Speaker's Advisory Committee on Works of Art

I thank the hon. Gentleman for that intervention and I know that he also has a keen interest in this issue. The nub of the matter is the 10-year guarantee and how effectively it comes into play when there is a problem.

As a society we have become very aware of our consumer rights. When making substantial purchases we look for warranties, for quality assurance and for customer service. There is no purchase in life more substantial than buying a house, yet over the past 18 months some of my constituents have felt less protected than they would have been if they had, for example, bought a new car. The protections they believed that they had, and which they had taken for granted, assuming that they would come into action should there be a problem, have simply not had the effect any reasonable consumer would want.

We all know that with new build properties there can be snagging problems. Indeed, back in 1996 I well remember buying a new house and some minor issues needed fixing. The builder came back and sorted them out, and I remember the pride I had in that house and in being able to put my own identity on it, and how happy I was.

What about when the issues are not minor, as was the case with my constituents Evelyn and Riccardo Lallo? Some 18 months after they first identified the problems with their brand new house, they remain in rented accommodation paying a mortgage on a house that they cannot live in. Unfortunately, they are still waiting for the builder, in this case Taylor Wimpey, to remove the undersized ceiling joists, some of the walls and the roof. To be frank, it sounds awfully like a total rebuild, and although they are in rented accommodation, one of their neighbours lived in a hotel for six months.

One of the problems I would like to draw to the Minister’s attention is the assumption by house purchasers that building control is necessarily performed by the local authority. That is not always the case. It is in some, but in many cases the building control checks are done instead by the warranty providers, such as the National House Building Council. There can be very good reasons for that. The warranty companies might prefer it, as they will then be providing the warranty for the building with which they have been involved from a very early stage. Several inspections take place at various stages, from checking the depth of foundations and making sure that cavities are the appropriate size, through to the pre-plaster check. There is a log for each inspection, which my constituents argue should be freely available automatically to the prospective purchaser.

The customer is not necessarily aware of that, and there needs to be a better understanding that a local authority building control inspector might never have seen the building, and the local authority, beyond granting planning permission, might have no direct interest in the subsequent build process. The assumption, however, is that no matter who has carried out the inspection process, problems will be flagged up throughout the process and could be amended in the build process before it moves on to the next stage.

I am conscious that my right hon. Friend the Member for Basingstoke has raised in detail with the Minister the flaws in the inspection regime, and how that might leave the homeowner in a more vulnerable position than they had ever imagined when entering into the contract to buy a home. I do not intend to repeat those arguments. Suffice it to say that I wholly endorse her view about the need for a duty of care to be established between approved inspectors and the homebuyer, and I welcome the Ankers report in that respect, but we also need somehow to convey to purchasers that they need to be vigilant in the process, and to be aware that it might not be their local authority that has inspected the build.

In the case of my constituents, Mr and Mrs Lallo, they feel very much as if they have been pushed from pillar to post, with each one shrugging shoulders and all pointing back to the builder as the one who must rectify the problems, and that is undoubtedly right. The NHBC system and other warranty providers require the builder to rectify any problem within the first two years, and in this situation the builder, Taylor Wimpey, has accepted that it is its responsibility to replace all the joists and trusses, which had not been installed properly as required. Tonight the scaffolding is up and I understand that the roof will come off tomorrow. We must hope that the sun will be shining.

When a defect is discovered and the builder refuses to carry out the remedial work, a free resolution service is offered by the warranty providers, but what happens when the builder agrees to carry out the work but drags their feet and does not get on with the repairs? That is the point at which my constituents first contacted me. Their bright, shiny new house had unacceptable levels of vibration and investigations revealed the joists and trusses were acting independently of each other. They have to come out, all the plaster must be removed, the ceilings must be taken out and the roof will come off. They contacted the local authority, which very quickly stated that it was not its responsibility, but could find no agency to act as an intermediary between them and the builder to exert the pressure that they wanted to facilitate a speedy and appropriate remedy.

For six months, the family lived with no ceilings after they had been stripped out, walls were missing and their living room furniture was in storage. For a further six months, they have lived in rented housing, expecting at every moment work to start on the house that was meant to be their pride and joy—a home for their boys. My constituents feel that for big purchases such as houses there should also be some protection—someone to speak up on their behalf, to act as an intermediary. It is their contention that there should be some sort of ombudsman, and that idea certainly has some attraction.

My real concern is that if, as happened in the case of my constituents, fundamental structural flaws that should have been picked up in the pre-plaster inspection were being missed, what can we expect as rates of house building accelerate? I hope the Minister can provide some reassurance that the inspection regime remains robust, and that the case of my constituents and their neighbours, who were similarly affected, is unusual. I say that because as house building necessarily increases, we want the owners of new homes to be happy, to have pride in their new homes and, above all, to be protected adequately should the worst happen.

Photo of James Wharton James Wharton Parliamentary Under-Secretary of State (Department for Communities and Local Government) (Northern Powerhouse) 10:46 pm, 2nd December 2015

I congratulate my hon. Friend 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 currently 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 they are 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.

House adjourned.