The Government has backed a highly critical report into house builders by the Competition and Markets Authority (CMA), including claims that many people buying new homes are not aware of the charges they may be liable to pay, particularly in relation to estate management charges.

In a statement issued by Department of Housing, Communities and Local Government (DHCLG), Ministers also say that the problems associated with buying new homes are part of the wider challenges for home movers in England and Wales and that “we recognise that the process… can be expensive, time-consuming, and stressful”.

Land banking and planning

The CMA’s report also takes a critical look at land banking, the planning system and the private management of public amenities on housing estates.

Ministers have used their response to the report to take a pot shot at developers in general, backing claims that they are deliberately not building homes fast enough in order to maximise profits and turnover, saying: “Many of the problems in the housing market are structural. It is over reliant on a speculative model of housebuilding that slows build out and constrains the supply of affordable homes.”

The Government also wants to see buyers given access to better redress when properties they move into are faulty and the DHCLG statement reveals that all house builders will have to join the New Homes Ombudsman (NHO) and abide by a single quality code.

Improve redress

DHCLG adds: “Earlier consultations identified a clear need to improve redress and strong support for the introduction of an ombudsman with an accompanying code that can investigate complaints and make determinations.

“This is why we are working with the devolved governments to implement the statutory UK-wide New Homes Ombudsman (NHO) scheme, and we will bring forward secondary legislation in due course.
In the meantime, those complaining about house builders have an existing but voluntary scheme to use, the New Homes Quality Board but which is not industry-wide in its coverage.

Nigel Cates, the Chair of the NHO, adds: “The announcement will ensure all those purchasing new homes will enjoy the same level of protection and recourse to an Ombudsman service no matter who their developer might be”.

Read the Government’s full response.