Scope of the Code

What type of protection does the Code provide?

Our Code covers the home buyer for aspects relating to the purchase of a new home that are not already covered by the builder or home warranty body. This includes setting standards for customer service and complaints handling, ensuring contract deposits are protected and that sales literature is clear and informative.

If you have a concern about a structural issue, this should be raised directly with your builder (within the first two years) and/or home warranty body. Where problems cannot be satisfactorily resolved, further support can be accessed through your home warranty body’s dispute resolution scheme and/or through the builder’s complaints process. If your builder fails to provide or adhere to their complaints policy, this may be considered a breach of the Code and could be brought as a claim through our Independent Dispute Resolution Scheme (IDRS).

To find out more about what to expect from your new home, download our guide.

Does the Code offer any more rights than existing legislation?

The Consumer Rights Act 2015 does not cover purchases of new homes. That’s why the protection provided by the Code is so important – the Code gives buyers of new homes protection if they change their mind or find sales literature misleading or inaccurate.

The Consumer Protection from Unfair Trading Regulations 2008 offers some protection. However, it requires Trading Standards to take enforcement action or consumers to bring their own legal action, which can be complex and costly.

Where issues are identified under the Code, home buyers can use the Code’s Independent Dispute Resolution Scheme rather than take lengthy and costly legal action through the courts.

Does the Code apply to all new Homes?

The Code applies to most homes being built under the insurance protection of one of the supporting home warranty bodies:

  • NHBC
  • Premier Guarantee
  • LABC Warranty
  • Checkmate

In some cases, a different code may apply so check with your builder or warranty provider – you should be given a copy of the relevant Code Scheme with your reservation agreement.

What support is available for home buyers who may be vulnerable or have additional needs?

A home buyer is potentially vulnerable if their personal circumstances make them especially susceptible to detriment. This could include those facing challenging personal situations and those less able to make decisions in their own best interest due to health conditions or other factors such as bereavement or divorce. It also includes those that are unfamiliar with the market such as first time buyers.

If you have specific needs or require additional support, we encourage you to speak to your builder or their sales agent to explain how they can make the process easier for you. Under the Code, builders must ensure that all new home buyers are treated fairly and are expected to adapt their approach, such as changing the way information is shared with you to make it easier to understand. 

Does the Code cover snagging?

Following an independent review of the Code, from 1 January 2024 our Code will require builders to give buyers (or their professional advisers) the opportunity to visit and carry out a pre-completion inspection and include in their after-sales service details of how snags will be dealt with during the two years after legal completion. The Code will require builders to resolve snags or defective, faulty or incomplete works covered by the after-sales service as soon as possible and within a mutually agreed timescale. If they fail to do so, then a complaint may be brought through the Independent Dispute Resolution Scheme. Builders must also provide an explanation of how snags and defective, faulty or incomplete works and service calls will be managed, including timescales, how they should be reported and the names and contact information of the builder’s staff to whom such issues should be addressed.

How do you monitor whether agents and developers are complying with the Code?

We encourage compliance through effective communication, training and assessments, as well as following up any Code breaches to ensure lessons are learned. In addition, experienced independent auditors from the Chartered Trading Standards Institute visit sites across the UK to monitor compliance with the Code and provide recommendations where needed to plug any gaps.

Does the Code apply to developments in areas such as Northern Ireland and the Isle of Man?

If the home is covered by one of the participating home warranty bodies, then the Code does apply unless the home builder has chosen to operate under a different code. If you’re unsure, ask your builder or check the information provided when you reserved your plot.

Does the Code cover corporate bodies and partnerships if they only buy one property?

No, the Code is intended to cover private buyers only.

Independent Dispute Resolution Scheme (IDRS)

Can I raise a complaint via the Code’s IDRS?

You must give your builder an opportunity to resolve your complaint first. However, provided your home is covered by the Consumer Code for Home Builders, if your complaint is not resolved to your satisfaction, you can raise a claim with our IDRS. Information should have been provided by your builder about the Code so check your paperwork to make sure it’s our Code you should be in touch with. If so, please speak to our enquiries team for details of how to make a complaint or read our complaints help section.

What support is available to help home buyers make a complaint?

Our aim is to make the complaints process as accessible as possible. To enable your complaint to be dealt with quickly, where possible you should state clearly which requirements of the Code you feel have been breached, and how.

In addition to providing as much detail as possible, it is very important that home buyers back up any claims with evidence. For example, complaints relating to financial loss should be supported with quotes demonstrating the cost of carrying out or rectifying works. However, you will be given the opportunity to review the draft decision and provide additional evidence if needed before a final decision is reached.

Read our blog on making the most of the IDRS

Why is the financial limit for claims less than some other Codes?

The financial limit for claims via the IDRS will rise from £15,000 to £50,000 for homes registered from 1 January 2024. Although this is lower than some codes, the limit follows the recommendations made in a Government All Party Parliamentary Group that looked at new homes purchases, and is considerably higher than others such as the Housing and Property Ombudsman Schemes. To date, very few claims have been awarded the pre-2024 maximum limit and awards can only be made where the buyer can evidence financial loss or to cover the costs of rectifying problems (which must be supported with quotes).

As part of the recent review of the Code, our Board considered raising the limit to match other new homes codes but felt that cases over £50,000 would be more appropriate to be handled via the courts with appropriate legal support for home buyers. Although there is no evidence to suggest that a higher sum is required and/or home buyers have been inhibited from bringing a claim, our Board has resolved to keep this under review.

Why doesn’t the Code deal with more cases?

The cases reported in our Annual Report cover those which proceed to the IDRS. Many home builders work hard to resolve complaints themselves successfully without the need for further escalation. The Code’s supporting home warranty bodies also deal with many enquiries and complaints which are resolved without a requiring formal complaint with the IDRS.

We are continually raising awareness of the Code so that we can encourage more people to access our IDRS should they feel the need to and have seen cases increase in recent years.

Encouragingly, overall satisfaction with new homes remains high according to the National New Homes Customer Satisfaction Survey which surveys new home owners

We recognise that not everyone has a good experience, and where problems relate to a breach of the Code, we encourage people to raise a complaint – see ‘how does the IDRS work’ for details.

Is there a limit to the number of claims a home buyer can make?

No. There is no limit to the number of individual claims a home buyer can make however, the maximum award for all claims on the same property shall not exceed the maximum financial limit for awards which is £15,000 for properties reserved up to 31 Dec 2023 and £50,000 for properties reserved from 1 January 2024. Matters in dispute must not be the subject of any current or previous adjudication involving the same buyer and the same property.

Are the findings of the independent adjudicator legally binding?

Under the rules of registration, the home warranty bodies require each registered builder to honour any award made against them under the IDRS if it has been unconditionally accepted by the home buyer.  If a home builder fails to honour any award, the home warranty bodies can apply sanctions including financial penalties, re-training or suspension from the new home warranty bodies’ registers.

Home builders have in the past been removed from the home warranty bodies register for failure to comply with the Adjudicator’s award, and details are published on our website and in our Annual Report when this happens.

Our independent Disciplinary and Sanctions Panel, chaired by Citizens’ Advice, reviews all decisions and takes further action where a serious breach or repeated complaints have been registered. A home builder remains liable for an award, even if they are removed from a home warranty body’s register.

Dispute resolution schemes such as our IDRS are designed to give consumers access to free and impartial redress which is relatively simple and quick to resolve. This does not prevent you from taking legal action, should you choose to do so.

Please be aware, however, that in some cases, if you accept the decision on your claim, you may not be able to proceed with any further legal action. Even in cases where you refuse to accept the award or decision made, any subsequent legal action is likely to take account of the outcome of your complaint.

Leasehold cover

Can new build homes be sold as leasehold under the Code?

Currently yes. However, under The Leasehold Reform (Ground Rent) Act 2022 which came into force on 30 June 2022, landlords are banned from charging ground rent. This came into force for retirement properties on 1 April 2023. It puts an end to ground rents for new, qualifying long residential leasehold properties in England and Wales. 

Home buyers covered by our Code must be informed prior to purchase about any management services and organisations to which they will be committed, and an estimate of their cost. Furthermore, solicitors should, as a matter of course, ensure their client is aware of any additional costs associated with a property.

Can I make a complaint via the Code about the cost of leasehold fees?

That depends. If your complaint relates to a period within two years of occupancy (the time period covered by the Code) and your home builder did not provide adequate information about management services and charges, you may be able to claim a breach of the Code. Outside of the two-year period, you may be able to complain to the Legal Ombudsman if you feel your solicitor did not alert you to fees and charges associated with your property.

Why doesn’t the Code prevent builders offering incentives to use their recommended solicitors?

The Code makes clear that consumers should be advised to seek professional advice prior to purchase. In some cases, using a recommended solicitor can be advantageous to both the buyer and the seller if that solicitor knows the site and associated paperwork as it can speed up the process for all parties. However, a solicitor must always act in the best interests of its client (the home buyer in the case of a house purchase). 

Even where the wider firm may also work for the builder, there are strict rules that law firms follow to prevent conflicts of interest. You can refer to the Solicitors Regulation Authority’s Principles and Code of Conduct which state that a solicitor must not allow their independence to be compromised. 

Home buyers are not obliged to use advisers recommended by the builder or agent.

New-build homes codes of practice

Are all new build homes covered by a single code?

No, but the Consumer Code for Home Builders covers most new build homes constructed across the UK which are covered by one of the four main warranty bodies – NHBC, LABC Warranty, Premier Guarantee and Checkmate.

In some cases, a different code may apply so check with your builder or warranty provider – you should be given a copy of the relevant Code Scheme with your reservation agreement.

Is the New Homes Quality Board (NHQB) part of the Consumer Code for Home Builders?

No. Like the Consumer Code for Home Builders, the NHQB is a not-for-profit company which set itself up in 2020 and operates its own code. It has commissioned a newly created New Homes Ombudsman to provide its alternative dispute resolution service. However, neither the New Home Quality Code nor the Ombudsman are statutory bodies and developers remain free to choose which code they comply with, subject to restrictions set out by their warranty provider.

Will the Consumer Code for Home Builders be replaced by the NHQB?

There are no plans to replace the Consumer Code for Home Builders. The Building Safety Act 2022 makes provision for a statutory new Homes Ombudsman and a single code, although both require secondary legislation. In the current political climate, it is likely this won’t happen for some time, and it is unclear how it will be achieved.

Would consumers be better protected by an Ombudsman?

No. The Code resolves disputes through its IDRS which is provided by the Centre for Effective Dispute Resolution Ltd (CEDR). CEDR is approved by the Chartered Trading Standards Institute as the ‘competent authority’ acting on behalf of the Secretary of State for dealing with disputes that are raised with the builder from the Reservation date until two years after the date of Legal Completion. In line with the government’s alternative dispute regulations, the time to deal with complaints under our scheme usually takes no longer than 8 weeks.

The level of financial settlements is based on evidence provided to determine the actual financial loss. This would be judged in the same way through an Ombudsman. The main difference is in the maximum financial limit, although the Code’s limit has increased for homes reserved from 1 January 2024.

However, the downside of an Ombudsman is that it does not regulate and only deals with complaints which is a weakness in Ombudsman schemes. Through the supporting home warranty bodies, we take action against home builders to improve standards. This can and has involved excluding them from the home warranty scheme, fundamentally affecting their ability to trade.

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