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Ministers are being urged to “get on” with plans to force developers to join a customer redress scheme, with a consumer group warning that people are left with more rights when buying a toaster than a house.
The appeal comes from the HomeOwners Alliance, the voice of the consumer, as the number of complaints about new homes made to a voluntary ombudsman service has more than doubled to 100 a month compared with a year ago.
The New Homes Ombudsman Scheme (NHOS), which launched in 2022, offers a service for buyers of new homes to settle disputes with developers, which can range from home mis-selling claims to defects with the completed property.
However, participation in the scheme by developers is voluntary, with the number of companies registered around 65-70 per cent of the 545 in the market.
Most of the largest developers in the UK have signed up to the scheme, but there was a “long tail” of smaller developers who had not joined, the NHOS told the Financial Times this week.
With the government expanding ambitious plans to build 1.5mn new homes by 2030, the HomeOwners Alliance says the government needs to make the scheme compulsory.
“It is completely frustrating,” said Paula Higgins, chief executive of the HomeOwners Alliance.
“There really is no excuse for the delay as primary legislation is in place [to make the scheme statutory]. They have done the hard work, they really just need to get on and finish what they have started.”
She added: “This is leaving many buyers unprotected from bad practices. For many new home buyers, they will have more protection buying a toaster than a new home, as you can’t return a home [back to the seller].”
The focus on protections for buyers of new homes intensified after a 2024 investigation by the Competition and Markets Authority raised concerns around the quality of some new builds.
About 123,000 new homes were completed across the UK in 2023.
The CMA investigation concluded that housebuilders do not have strong incentives to compete on quality and consumers have unclear routes of redress. The watchdog found a “growing number” of homeowners were reporting a higher number of snagging issues with new builds, or issues identified after the completion of the home.
A substantial minority also experienced particularly serious problems with their new homes, such as collapsing staircases and ceilings, according to the CMA report.
The CMA recommended that the government set in place a statutory New Homes Ombudsman Scheme across the UK “as soon as possible” to protect buyers suffering issues with their new home. In August last year, the government accepted this recommendation.
Complaints from homebuyers have steadily risen over the past three years as more developers have signed up, according to the NHOS.
“Most issues we see concern physical aspects of a property — defects and snagging, but can often be compounded by additional problems with customer service or sales promises,” said Nigel Cates, chief ombudsman at the NHOS.
“The worst issues we see tend to be enquiries relating to developers who have not yet signed up to the scheme and where the customers do not have the protection of NHOS.”
He added: “The government has committed to making the scheme statutory, which will be a welcome development and mean all customers are covered by the scheme.”
The Department for Housing, Communities and Local Government said it remained “committed” to making the scheme compulsory — but did not offer a timetable.
“We will deliver a statutory New Homes Ombudsman to make sure that new home buyers can challenge developers when things go wrong and drive up standards in the sector,” said the Ministry of Housing, Communities & Local Government
“This will help us to deliver 1.5mn good quality homes as part of our Plan for Change, and we will set out further details in due course.”
