Homeowners of new properties should receive greater rights if there is a fault in their property, according to a recent by the Social Market Foundation.

New rules are needed to fix a broken and non-competitive market for new-build housing which currently puts too much focus on the profits that builders can make, leaving many buyers increasingly unhappy about quality and services, according to the recent report from the Social Market Foundation.

The report calls for the introduction of rules already in place in countries including the Netherlands, such as the ability for people buying new-build homes to hold back five per cent of the purchase price until the house builder has fixed any problems or defects with the property.


Further, there is a suggestion that some house builders have a ‘culture’ of neglecting customers’ interests, and the Social Market Foundation is calling on the Government to do more to safeguard consumer rights. All this comes at a time where political focus on the quality of new-build housing is growing.

The fact that many house builders have left the market and / or been acquired by larger firms in the past 30 years is highlighted as a concern in the report. This is because it has created a system where developers’ profits are able to rise without enough attention paid to the customers who will buy these properties in the end.

The think tank has urged the government to do more to encourage the operations of small to medium-sized house builders to improve competition within the housing market, which could increase competition and therefore standards.

Salima Ali, author of the report, says: “Buying a new home is the biggest purchase most people will ever make, but the market doesn’t work well for many consumers. They should have more information about house builders and more power to push builders to fix problems with new homes.

“House builders should also face more competition: they’re not under enough pressure to provide the better, cheaper houses that consumers want. It’s too easy for them to sell homes that leave buyers unhappy while making large profits. A better market would push them to work harder and give their customers a better deal.”

James Brokenshire, secretary of state for housing, acknowledged that the report highlights a number of challenges for the house building market. He commented: “Where we need to, we will act to protect consumers and ensure the market rewards quality, consistency and customer service. I will consider the recommendations made with interest.”

The report also calls for the introduction of detailed information packs for prospective new home buyers so that they can review their options and make a more informed choice. This should include measures on performance of each house builder such as satisfaction, defect data relating to previous home and warranty claim numbers.

Also, a compulsory licensing and certification of house builder firms is called for, to ensure that all companies have appropriate standards which should improve quality across the industry.

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Jim Kersey
Jim focuses on the socio-economic impact of housing. His reporting for Property Notify often touches on topics such as changes in sentiment among investors in various housing sectors, as well as the impact of various developments on the average person.

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