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Propertymark pressure leads to New Homes Ombudsman announcement

Thursday 27 June 2019

Following the NAEA Propertymark’s call that purchasers of new build homes should have access to an ombudsman scheme, the UK Government has launched a consultation on the New Homes Ombudsman.

The New Homes Ombudsman will aim to hold developers to account, including ordering builders to pay compensation for defective properties.

The Governments Redress for purchasers of new build homes and the New Homes Ombudsman consultation aims to seek views on a New Homes Ombudsman and the detail of proposed legislation to provide better redress for purchasers of new build homes.

The proposed legislation includes devolved matters and the Government will consult the devolved administrations with the aim to seek agreement on introducing UK-wide legislation.

The Government have also announced that housebuilders could be forced to sign up to a code of conduct if they want to benefit from the revised Help to Buy scheme.

NAEA Propertymark put forward proposals for an ombudsman scheme for purchasers of new build homes and for all new house builders sign up to the Consumer Code for Home Builders in our research, Leasehold: A Life Sentence.

We also outlined our concerns and put our proposals forward to the House of Commons Housing Communities and Local Government Committee inquiry into leasehold reform and the government’s call for evidence into improving the home buying and selling process.

Currently, consumers who buy a new home directly from a developer have no access to redress and housebuilders’ sales staff do not fall under the 1979 Estate Agent’s Act.

Commenting on the news, Mark Hayward, Chief Executive of NAEA Propertymark said: “It is positive news for consumers that Government are looking at how to create an ombudsman that will cover new homes.

“We have previously raised concerns that those buying a new home directly from a developer have no access to redress, as sales directly via a housebuilder do not fall under the Estate Agent’s Act 1979.

“Bringing new homes under the scope of an ombudsman allows for a level playing field across the entire house buying process and will ensure the selling activities that developers are engaging in are of a consistently high standard.”

NAEA Propertymark has long held the view that the Government must ensure developers compensate leaseholders to remedy onerous clauses and purchasers of new build homes have access to an ombudsman scheme.

Regulation of the property sector and better use of technology through a digital property logbook can also empower consumers.

The Government must ensure that there is a level playing field across the home buying and selling process and selling activities that developers engage in are of a consistently high standard.

For more information including NAEA Propertymark consultation responses and resources, visit the Leasehold Properties web page below.

Leasehold properties