Increased demand for affordable housing is compromising quality, say industry experts, leaving angry owners battling for recourse from industry giants
Thousands of buyers face moving into substandard properties as developers compete to meet demand for affordable housing, experts are warning. The concerns come as the number of new homes in England jumped by 25% in 2014-15 according to official figures released last week – the biggest increase in 28 years.
A total of 170,690 homes were added to the country’s housing stock, figures from the Department for Communities and Local Government showed, of which 155,080 were new-build. But experts say poor workmanship and unexpected costs risk turning a buyer’s dream into a nightmare. “In the rush to build new homes there is concern that standards are slipping,” says Paula Higgins, chief executive of the Homeowner’s Alliance, which champions the rights of homeowners.
A recent survey carried out by the group found that 38% of buyers are shunning new-builds because of their poor quality. “Our findings throw down the gauntlet to developers and the government,” Higgins says. “We need more new homes, but ones that are built to last generations, not for a quick profit.”
Buyers of properties at a development in Milton Keynes claim to have experienced the pitfalls of new-build property. Designed by Richard Rogers’ company Rogers Stirk Harbour + Partners, and built by Taylor Wimpey, residents claim it has taken three years to make them habitable. “The proposed remedial works will seriously affect the value and any future sale of the property,” says Dave Richings who moved on to the Oxley Woods estate five years ago.
Residents have experienced leaks and rot across the 122 houses built in 2007, and say they have had to battle for years to get their concerns heard. Taylor Wimpey has since taken action against RSHP for breach of contract/duty of care, but RSHP says it will defend this.
Purchasers have more protection when buying a can of beans than a house, for property is excluded from the Sale and Supply of Goods Act, which offers legal rights when there’s a problem. Instead, most owners of new homes must rely on the 10-year Buildmark warranty provided by the National House Building Council (NHBC). But the 10 years is misleading. If a defect comes to light in the first two years the builder is obliged to resolve it; after that you have to claim on NHBC insurance, which only covers structural issues. That means buyers have two years to identify, report and resolve non-structural flaws that might take months to come to light.
The NHBC is funded by developers, and campaigners are calling for an impartial government-funded regulator to replace it. “The big three developerswho are responsible for the majority of new homes pay the NHBC millions, so the NHBC doesn’t want to rock the boat,” says Steve Nancarrow, managing director of New Home Advisor, and a former customer care manager for a number of developers. “And because they hold such large land banks and the government are relying on them to meet housing needs they wield enormous power.”
Higgins says: “We are increasingly hearing from people who have tried to get their problems resolved through NHBC or the developers, but are hitting their heads against a brick wall. Those who have used the help-to-buy scheme feel duped into thinking that those developers backed by government must adhere to good quality standards, but find out that is not the case.”
Roberto and Carolina Revilla moved into their £950,000 Taylor Wimpey house in Millbrook Park, north London, in July 2014 and have spent 15 months battling to get major flaws fixed. “Our quarterly heating bill last January was £1,200 because cold air was blowing through the skirting boards and most of the walls did not have cavity insulation,” Roberto says. “The top floor landing is so narrow we can’t get any furniture up there, the garden was waterlogged because there was no drainage, the wooden floor was uneven and we’ve suffered serious noise issues due to the badly fitted windows.”
In May the NHBC upheld the Revilla’s complaints and ruled that all problems should be rectified by the end of August, but the couple say disruptive work is ongoing and a list of 120 snags is yet to be addressed. Taylor Wimpey claims “a substantial amount” of the remedial works has now been completed and “sincerely regrets” the problems.
At Oxley Woods, residents reckon NHBC’s supposed neutrality is compromised. “The NHBC was responsible for the original building control and sign-off for the estate. It is also overseeing and approving the remedial works,” Richings says. Taylor Wimpey blames the problems on design and “the poor performance of certain third party contractors”, and says residents’ Buildmark warranty will be extended by eight years on completion. Worryingly, NHBC signed off the estate without picking up on the design flaws that were already plaguing the first occupants. Although its website claims its standards and inspection service tries to ensure that every Buildmark home is problem free, a spokesperson says its checks are “not intended to supervise the construction of a home, nor are they a substitute for the builder’s own quality assurance”.
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In 2010 the Consumer Code for Home Builders was introduced after a government investigation found 70% of new homes suffered snagging problems and buyers were left without statutory redress. It sets a code of conduct for member builders and offers dispute resolution if problems can’t be resolved. However, it the code is voluntary and regulated by the building industry whose representatives dominate its board. Moreover, it only applies to builders registered with one of the four new home warranty providers, NHBC, Premier Guarantee, Zurich Municipal and LABC Warranty.
As for the residents of Oxley Woods, they face disruption continuing until the end of 2016, and Taylor Wimpey refuses to discuss compensation until the remedial programme is complete. “The firm delayed informing residents until last summer that some of the properties have suffered from wet and dry rot as well,” Richings says. “All these factors need to be declared to potential lenders and insurers. This has made selling and remortgaging difficult. The absolute incompetence of the UK’s largest builder has turned our lives upside down.”
WHAT YOU CAN DO
Observe how the site is managed. A disorganised site suggests an unreliable builder.
Ask an independent snagging company to inspect the house for flaws before completion.
Check that the builders are members of the NHBC.
Ensure your home and contents policy includes protection in case you have to take your developers to court.
Appoint a solicitor early to advise on contracts such as a cancellation clause if the builder does not complete by a specified date.
If you are buying in the second or third phase of releases ask first phase residents about their experiences.
Avoid buying in June or December when developers may cut corners to get the money in before their half yearly accounts are due.
