Affordable housing increase

The buyer’s claim

The buyer claimed they were mis-sold the property because the advertising material showed that 6 out of 33 properties on the development would be designated as social housing, whereas there are 20 social housing properties. The buyer requested £5000 compensation.

The builder’s defence

The builder stated that the additional affordable housing properties over and above the initial six, were sold on the open market as per the development plan, which did not include any restriction on the sale of remaining units provided they were sold on the open market.

The adjudicator’s findings

The adjudicator noted that the Code does not require the builder to identify who it is selling properties to on the open market and that selling the remaining properties to any interested parties on the open market is different and distinct to the mandated number of affordable homes required by the planning conditions. The mandatory social housing information was included in the marketing material which were therefore correct, and the adjudicator found that the builder did not mislead the buyer and had not breached the Code.

Learning points

For buyers:

• To meet planning conditions, builders are typically required to allocate a certain number or percentage of affordable homes in their development, which varies based on location and size of development. However, this doesn’t necessarily mean those will be the only affordable homes on the development. Beyond planning restrictions, builders are free to sell properties to any interested buyer on the open market.
• Builders won’t necessarily be able to predict who will buy their properties, or how. In some cases, builders may sell a number of homes to one purchaser, such as a housing association.
• The Code requires builders to provide sufficient information to enable you to make an informed decision. However, they are not required to provide details of other purchasers, and in many cases, won’t know this at reservation stage. If there are circumstances that would directly impact your decision to buy, talk to your builder at the outset so that you are clear about what they can and can’t guarantee.

For builders:

• Buyers may assume that the formal allocation of social housing – or any other specific property type – is the limit for that development. Although you are not required to provide information about other purchasers, it can be helpful to clarify that you are not able to make any guarantees about who may purchase properties and how they will be managed.
• Remember to follow your after-sales and complaint process and respond to buyer concerns. Even in cases where the original dispute is not considered a breach, builders can still find themselves in breach of the Code if concerns or complaints are not handled appropriately.