‘New-builds should come with a risk warning’, says founder of Homebuyers Fightback
When you pay almost half a million pounds for a new home, there are certain standards you have every right to expect. But when you are faced with a snagging list running to 150 items, and struggle to get adequate redress after 18 months from the developer, builder or insurer, you can be left feeling powerless – or you can decide to act. Whittlesford resident John Gaskell has chosen the latter course of action.
“New-builds should come with a risk warning. Consumers have more protections when they buy a computer for £500 than when they invest their life savings in a new home,” he says. “This is absurd and cannot be in the public interest. It is a national scandal which needs addressing as a priority.”
John and his wife bought their house in September 2019 and problems have affected the plumbing, hot water system, electrical wiring, underfloor heating, thermal ingress and insulation, fixtures and fittings, pathways, patios, driveway and garage, and the house does not seem to comply with disability access building regulations. The bill to fix the outstanding problems is £35,000-£45,000.
John is launching the Homebuyers Fightback initiative to press the government to pass legislation to improve standards and consumer protections and is calling on MPs, councils, planning authorities, developers, housing associations and builders to back the campaign.
Concern about the protection for buyers of new-build properties is nothing new. The Callcutt Review of Housebuilding Delivery in 2007, an independent report commissioned by the government, noted concerns around caveats included in warranties, and the Office of Fair Trading’s 2008 study also considered unfair contract terms.
John has already enlisted the support of former MP Oliver Colvile who chaired the All Party Parliamentary Group (APPG) for Excellence in the Built Environment that reported on what is needed to put matters right in the new-build housing sector. However, since the APPG published its report in 2016 there has been limited progress, though elements have been included in the 2017 Conservative manifesto and a Housing Bill.
Mr Colvile says: “The building of many of these new-build homes has not improved and I am delighted the government is now taking some action.
“I really hope new home buyers will have an opportunity to obtain recompense for bad building through a new homes ombudsman who can force shoddy developers to put things right, penalise them if they don’t deliver, and we see a reduction in builders hiding behind contracts written in the language of exclusion and inadequate insurance policies.”
Following up on the problems at his house has been time-consuming on John’s part. He says: “I’ve had to effectively take on a part-time job and call on independent experts.”
Among those experts is HouseScan Ltd, a firm which offers professional snagging reports and was featured in Channel 4’s Dispatches investigation, Britain’s New Build Scandal, into allegations of shoddy standards in and poor customer care by Persimmon Homes.
Managing director Harry Yates says: “We use our nationwide team of experts to complete snagging surveys for new-build home buyers. While the number of snags per property varies, our data indicates that in 2020 we found an average of 157 defects in every new-build inspected. The sector could be facing as many as 12.6 million snags across Britain per year.
“With only around seven per cent of homes being professionally inspected, the vast majority of these issues go unchecked, unnoticed and unamended until it’s too late and the home builder’s two-year warranty has expired. Although many home builders do a great job, all too often we’re seeing customers in Mr Gaskell’s position, suggesting the current processes to assist home buyers fall short of what is required.”
John adds: “What I found most shocking was not just the poor building standards delivered by the developer and their builder, but the lack of consumer protections and accessible redress. This is in stark contrast to just about every other area of modern life, where providers of goods and services are rightly expected to deliver good standards and are held accountable when they fail to deliver.
“I am now faced with a developer that seems to want to hide behind the legal small print and language of exclusion, and who takes cover in the inadequate protections of new-build insurance policies, as echoed in the APPG’s report. For example, they found two-thirds of defects are not covered by these policies and it is commonplace for developers to use exclusion clauses to try to avoid liability for defective workmanship.”
A chartered wealth manager and certified financial planner with more than 30 years’ experience, John contrasts “the wild west new-build sector” to the UK’s well-regulated financial services sector.
“Although not perfect, consumers now have strong regulatory protections for their pensions and investments when things go wrong,” he says. “But in the new-build sector with its virtually non-existent regulatory protections, market abuse seems to be commonplace, leaving hard-working home buyers at the mercy of the wolves. Developers and house builders need to be dragged kicking and screaming into the 21st century.”
And citing Only Fools and Horses, he adds: “With ‘no money back, no guarantee’, it’s a Del Boy market.”
John has already enlisted the support of Anthony Browne and Daniel Zeichner, MPs for South Cambridgeshire and Cambridge, for his fledgling campaign.
Mr Browne says: “Crossing the threshold into your new home should be a moment of triumph, not the start of months of frustration simply to get your home up to standard. This is an all too familiar situation and needs to be addressed at a national level.
“There is no reason developers should not be providing homes that meet the highest standards in terms of build quality and sustainability. With the housebuilding industry about to get its own ombudsman, now is the time to crack down and ensure homebuyers have all the information they need before they set foot in their new home. I know Mr Gaskell’s own situation has been a cause of great distress. I wish him the very best of luck with his initiative and will continue to raise issues of building standards at a national level.”
And Mr Zeichner says: “I have heard too many horror stories about people moving into what should be a new-build dream home but it turns their life into a nightmare. I have long campaigned for a new homes ombudsman who should eventually come into post later this year.
“We need to deal with the very real problems happening now – of leaking roofs, dangerous electrics and unsafe cladding. But we also need to address the underlying problems. This is a consequence of Conservative deregulation, with local government having had its control on building regulations removed over the last decade. The result has been big profits for developers and heartbreak for householders.”
John says there needs to be a carrot and stick approach to address the underlying problems: “The carrot is that developers, housing associations and house builders commit to deliver high standards and guarantee they will stand behind the quality of the homes they build – it would be difficult to understand why anyone would not want to support this as it must be good for business.
“But there has to be a stick. If local government has reasonable grounds to suspect a developer has been building shoddy houses, they should suspend further planning permission until they have put those issues right. Local authorities have a duty of care to residents. Unless they become the local policemen for this, nothing will change.”
As well as action at the local level, John believes this must be replicated at national level.
He says: “I truly hope this government will do something meaningful to address the systemic problems in this dysfunctional sector so that hard-working people have the properly built homes they deserve, with adequate protections and easily enforceable redress against developers and builders that do not meet a professional standard.
“A new homes ombudsman would represent a significant step forward. But to make any real improvement, far-reaching reforms are needed, particularly legal reforms so buyers of new builds are not subject to liability exclusion clauses in contracts for sale.
“Perhaps what is really needed is a home buyers charter under statute, that enshrines the legal rights of all home buyers, and which can be easily enforced when developers and house builders fail to deliver.”
If anyone has experienced problems with a new-build home, they can contact John’s campaign at email@example.com and follow @Homebuyersfigh1 on Twitter.
Sign up for our weekly newsletter for a digest of the latest stories and analysis direct to your inbox every Friday