Buying a New Home? Or Bought a New Home in the last 2 years? Is it fault free?

New does not necessarily mean flawless. Newly-built properties are known to have minor defects or snags caused by poor workmanship or equipment. It is your Housebuilder's responsibility to check and fix any snags before you complete the purchase, but it is unlikely they are going to fix everything given the time pressure constraints under which they work.

Problems with New Build Homes 

In 2015, in their annual survey on satisfaction with new homes, the House Builders Federation (HBF) and NHBC (which is the new home warranty scheme - an insurance against unexpected problems or problems due to your Housebuilder not conforming to NHBC Standards during construction) reported that 86% of buyers were satisfied overall with their new home. However, 27% of buyers said their new home had more problems than they had been expecting.

In their 2017/18 survey it was reported that 86% of buyers were satisfied with the quality of their new home, but 34% said their new home had more problems than they had been expecting. Also 16% were dissatisfied with the standard of finish, 9% dissatisfied with the quality, and 14% dissatisfied with the condition of their new home on the day they moved in.

In their 2018/19 survey, published March 2020, of the 63% of new home buyers who responded, it was reported that 77% were satisfied with the quality of their new home, 31% said their new home had more problems than they had been expecting, but only 26% said there were fewer problems than expected. 97% had reported snags to their builder, 25% of whom had reported more than 16 snags. Also 14% were dissatisfied with the standard of finish, 8% dissatisfied with the quality, and 12% dissatisfied with the condition of their new home on the day they moved in. Although these figures are a slight improvement on the previous year’s survey, they still appear to indicate a consistent problem with build quality.

With most goods you have the right to reject them and demand your money back if they fail to live up to expectations. Property, however, is exempt from the Sale and Supply of Goods Act, with the result homebuyers can be stuck with faulty properties.

What your warranty provides

If your home is less than 10 years old – even if you are not the first owner – it is almost certainly covered by a warranty, as mortgage lenders usually insist on this. In 80% of cases this will be the Buildmark Policy provided by NHBC. Other policies include BLP, LABC, Premier Guarantee and Checkmate.

You should have received an NHBC information pack, or similar, within the Home User Guide Pack for your new home when you moved in, explaining what is covered.

Most of these policies work on the same principle:

• During the first 2 years, the policy covers most defects, except for matters of wear and tear and minor defects such as small plaster drying cracks. During this period you should contact your Housebuilder, or Housing Association, directly in the first instance. If your builder is no longer in business, however, you should contact NHBC or other warranty provider.
• In years 3-10, the policy will cover major defects, such as structural or weatherproofing problems. During this period the minor defects are excluded.
• From year 11 onwards you will have to rely on your own insurance policy.

You should also be aware that policies, such as NHBC’s, may not cover all design and construction problems – for these, your only option may be to sue under the builder’s contract. 

The importance of a Snagging Survey and the Best Time to have it done

For most of us a New Home is a once in a lifetime purchase.

On ITV’s Tonight Programme - “Britain’s New Build Nightmares” - on 5/9/19 the owners of a 4-bed detached house found about 20 snags. A professional snagging company carried out a survey and found over 360 snags, with one major problem with loose ridge tiles. Whilst the total number of snags sounds bad, it doesn’t mean the house is not well-built, just that there are a lot of minor issues to be rectified. A snagging company can help point out the issues you might not see yourself.

A Snagging Survey gives peace of mind that you bought what you paid for. 

You can carry out a snagging survey at any time in the first 2 years, although some defects found late in this period may be disputed by the housebuilder as being caused by wear and tear, or damage by the homeowner.

The Best Time to have your Snagging Survey done is approx 1 week before contract completion. Not only is this arrangement more convenient for you, to cause you the least disruption (especially if major issues are found), but it is also easier for the site to work from one comprehensive snagging list rather than you raising issues over several months. However, most developers do not allow access to Snagging Companies to carry out the Snagging Survey prior to completion, which is within their rights as they still own the property until contract completion, and it is still possible for you to pull out of the purchase.

The timescale builders require a snagging list from you varies from just a couple of days to a few months. If you have bought through a large developer such as Bovis, Persimmon, Barratt, Bellway, Bloor, Taylor Wimpey, Redrow, etc, we recommend that it is carried out during the first 2 months. The reason for this is in relation to the HBF customer survey which you should receive 8 weeks after completion. It is important for your builder to address the items on the snagging survey to ensure they receive a favourable rating when you come to complete the survey. 

In any case, before the initial two year period expires, you should give your home a thorough inspection and send a final report of any outstanding problems to your builder.

You can do this yourself, with advice from a company such as OBISS, by carrying out a Snagging Survey to list the defects which need attention and sending it to your builder. The advantage of using a specialist snagging advisor is that they can point out defects that homeowners may not typically have reported themselves. At its best, a snagging survey will help apply pressure on a builder to sort out defects. 

You shouldn’t be concerned about sending a long list to them. They would prefer a single list, and are more likely to act on it, as it is more cost-effective for them to send tradesmen to rectify all the snags in one visit rather than have several visits with 1 or 2 snags at a time.

The housebuilder’s obligation to fix the defects

As part of your property’s warranty, which typically lasts for ten years, Housebuilder’s are legally obliged to put right any defect caused by their failure to build in accordance with the building standards as set out by the warranty and insurance provider. However, the guidelines can be subjective, which is where it can become tricky. You might consider something to be a fault but the housebuilder may argue it is not.

Most of the time, it is about negotiating. You may not get everything you want, so you will have to decide what you are happy with.

No traditionally built new home is going to be completely flawless because it is built by people, not machines. There may be some minor things you have to fix yourself but be wary of invalidating the warranty.

Remember at all times though that housebuilders are professional companies who have a reputation to maintain.

Try to keep things amicable with your housebuilder as it will make the process easier. If there is a breakdown in communication between you and the housebuilder, your warranty provider can offer a resolution free of charge.

What you can do next if no satisfactory response from your housebuilder

Even armed with a detailed snagging report, there is no guarantee that your builder will take any notice of problems during the first two years. If your builder does not respond satisfactorily your next move should be to escalate your complaint directly to the NHBC – or other warranty provider – as soon as possible. 

In this case you will get better results if:

• You make sure you keep records of all communication including copies of all letters, emails, etc, and confirmation of any verbal discussions and agreements. Even if your builder is available on  site and is generally amenable to face-to-face requests, it is a good idea to correspond by letter or email from time to time to make sure there is a record in case things go unexpectedly wrong  later.
• You can demonstrate you have pursued the matter with your builder exhaustively before approaching your warranty-provider (though keep in mind the 2 and 10 year warranty periods).
• You haven’t tried to fix the problem yourself, which your warranty-provider may consider to have invalidated your warranty.
• You have a dated Snagging Survey report, listing all the faults present at that time.
• You have taken an approach of polite persistence at all times, not anger or abuse (no matter how difficult this may be).

If you don’t receive any satisfaction from your warranty-provider, you can complain internally to NHBC, or other warranty-provider, but make sure you follow the complaints procedure.

New Homes Ombudsman

The government announced on 14/10/19 that there will be a New Homes Ombudsman – a watchdog that will champion homebuyers, protect their interests and hold developers to account. 

They intend to legislate to require all new developers to belong to a new homes ombudsman.

House buyers should be confident that when they purchase a new home, they get the quality of build and finish they expected.

The government will work with consumers and industry to develop proposals and publish more details in due course.

In the meantime government expects industry to continue to improve the current redress arrangements and improve the consistency of quality for new build homes.

The Government recognises that building a new home is a complex undertaking requiring a wide range of various skills and trades but expects builders to aim to get things right the first time, correct mistakes quickly and treat home buyers fairly.

What the scheme means for homebuyers

Currently, there are no options to complain about substandard work and hold developers to account. Ultimately, this scheme is designed to protect new homeowners from rogue developers and inadequate building work, giving them the opportunity to raise a dispute.

Decisions are yet to be taken around maximum awards for compensation, however the government response states that it would want to see a New Home Ombudsman make awards up to £50,000. With regard to the time allowed for complaints to be issued, the documentation proposes that this be set at two years in line with current liability periods.

Following the establishment of a board and permanent chair, it was hoped the scheme could be in place in early 2021 along with an expected transition period for developers to join. This has since been revised to later in 2021.

What if I find a problem after the initial 2 years?

You can still go back to the Housebuilder if you have found a Latent Defect. A Latent Defect is a defect in the property that could not have been discovered by a reasonably thorough inspection before and following the sale. For example this could be a hidden leaking pipe which did not become apparent until it manifested itself sometime after the end of defects liability. In such cases this may be difficult to prove so you may have to seek legal advice.