In December 2021 the New Homes Quality Board (NHQB) published its quality code, which became the national code of practice for the house building industry.
The publication followed years of work to agree a single code, which included a full public consultation on its initial draft.
The new code aimed to fill the gaps in previous protections and ensure that every aspect of a new home purchase, from when a customer walks into a sales office, through to two years after the purchase of the home is covered.
This is what it means for housebuilders…
What is NHQB? The NHQB is a non-profit organisation dedicated to improving the quality of new homes and customer service provided by developers.
As part of its mission to improve industry standards, the board oversees the New Homes Ombudsman Service to ensure developers fulfil the requirements of the New Homes Quality Code, and to provide compensation if necessary.
By championing quality new homes and better consumer outcomes, they aim to help create a housebuilding sector that benefits all.
What is the purpose of the code? The New Homes Quality Code offers enhanced protections for buyers of new homes. The Government had announced that a New Homes Ombudsman should be introduced in response to criticism of new build homes. The ultimate aim of the New Homes Quality Board and the New Homes Code is to achieve customer satisfaction.
Who does it apply to? The New Homes Quality Code establishes mandatory requirements which must be adopted and complied with by developers and new homes builders who are registered with the New Homes Quality Board. While membership is currently voluntary, the intention is for it to be used on a UK wide basis. It will require participation for members on Help to Buy Schemes.
What does it cover? The code is broken down into four parts, covering the different stages of the new home buying process. The four parts are: Selling a new home; Legal documents, information, inspection and completion; After-sales, complaints management and the New Homes Ombudsman; and Solvency, legal and jurisdiction.
What are the requirements? The code sets out specific requirements about the standard of service customers should get during the new home buying process. In summary it: • Allows a 2-year builder’s liability for the customer from date of legal completion of the original sale by the developer • Prohibits selling incomplete homes, ensuring new homes built by registered developers meet building-safety and other regulations • Enables buyers of new homes to arrange a pre-completion inspection before the completion date and within five days after notice to complete has been served or earlier if the developer and the customer both agree to this • Requires the developer to provide full information to buyers on tenure, future management and service charges • Provides an effective after sales process.
What are the key principles? The code sets out 10 fundamental principles that registered developers agree to follow. They are:
- Fairness
- Safety
- Quality
- Service
- Responsiveness
- Transparency
- Independence
- Inclusivity
- Security
- Compliance
What does it mean for SME housebuilders? The code’s framework means all developers work towards the same robust guidelines, meaning no matter the size of the developer, all have a consistent standard which they must meet. This may mean some SME developers need to enhance their services to compete with larger ones.
The NHQB provides an independent and impartial ombudsman, which helps resolve customer complaints when finding an in-house solution becomes too challenging. By offering this protection, which might otherwise put a significant financial and resource strain on SME developers, it helps safeguard the reputation of developers who are meeting the required standards and builds trust among potential homebuyers.
Where can you find out more? More information about the NHQB and the New Homes Quality Code can be found on the organisation’s website at: https://www.nhqb.org.uk/
