New Homes Ombudsman; New Homes, New Protections

The Government in the new Building Safety Bill has published information about the New Homes Ombudsman. This bill was first released in July 2020 and the latest draft was issued on 5 July 2021.

The idea behind the bill is to ensure housebuilders deliver high standards of quality, service and customer satisfaction.

Housing Secretary Robert Jenrick has said that it is “ completely unacceptable that so many people struggle to get answers when they find issues with their dream new home. That’s why the Ombudsman will stop rogue developers from getting away with shoddy building work and raise the game of housebuilders across the sector. Homebuyers will be able to access help when they need it, so disputes can be resolved faster and people can get the compensation they deserve”.

Key points:

  • New Homes Quality Board (NHQB) is an independent body designed to promote new build quality and strengthen the protection available for buyers. They are presently working on a new code which is set to replace the Consumer Code for Homebuilders.
  • The new code will require developers to have effective complaints procedures in place, specified timelines in which they have to respond to buyers that raise complaints. If they do not adhere to these measures, buyers will be able to refer them to the New Homes Ombudsman.
  • Other parts of the housing market already have mandatory redress requirements set out in legislation e.g. social housing, and property, lettings and estate agents. 
  • Buyers of new homes will have the right to have complaints against builders investigated and determined by the New Homes Ombudsman.
  • The service will free.
  • The Ombudsman will have the following powers:
    • the ability to make awards for compensation to the homebuyer
    • request developers to undertake or refrain from undertaking work
    • direct developers to improve their service
    • publish details and reasons for expulsion of a developer
    • the ability to make recommendations to resolve disputes and timescales for rectifying disputes
    • request apologies and explanations from developers
  • Failure to comply with a determination may lead to the builder being expelled from the Ombudsman Scheme – effectively barring them from the industry (since membership of the Ombudsman Scheme is mandatory).

Further details are expected later in the year; the NHQB is currently going through a tender process to identify and appoint a third party to run the Ombudsman Scheme and a decision is expected in the autumn.

Priya Sejpal is an Associate in BLM’s Property Litigation team.

Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to clients of BLM. Specialist legal advice should always be sought in any particular case.

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