Who does what when it comes to consumer protection for new build homes?

Buying a new home is a major and complex purchase, which is why consumer protection is so important. Here’s a quick guide to the different types of protection that apply and how they are governed.

Codes of practice

Purpose

• Set requirements builders of new homes must meet in the marketing, selling and after-sales support for home buyers
• Provide access to independent redress scheme for consumers’ complaints

The Consumer Code for Home Builders (CCHB) was established in 2010 and is supported by the UK’s four main home warranty providers, NHBC, LABC Warranty, Premier Guarantee and Checkmate.

Independent oversight

Many new homes codes are independently audited and assessed annually by the Chartered Trading Standards Institute (CTSI) Approved Code Scheme. The CTSI is the government approved body that sets standards which organisations operating codes of practice should meet.

The CCHB has been an Approved Code for over five years.

Home warranty schemes

Purpose

• Provide a 10-year guarantee covering build quality and structural defects (of which the builder is responsible for defects reported in the first two years)
• Free dispute resolution service if you are unable to resolve issues directly with your home builder.
• Deposit protection if your builder becomes insolvent.

Independent oversight

Warranty providers are regulated by the Financial Conduct Authority. Consumers can raise complaints via the free, impartial Financial Ombudsman Service.

Alternative Dispute Resolution

Purpose

• Provide free, impartial ways of resolving disputes between consumers and new home builders that don’t involve going to court.
• Ombudsman schemes are a form of ADR providing a similar service

Independent oversight

• ADR schemes must meet requirements for handling disputes set out in The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015
• The CTSI operates as the competent authority, acting on behalf of the Secretary of State, and audits and approves ADR bodies in all non-regulated sectors

The CCHB’s ADR scheme is operated by the Centre for Effective Dispute Resolution Ltd, a CTSI-approved ADR provider.

Conveyancing services

Purpose

• To provide advice and guidance to consumers on all legal aspects of a new home purchase
• Must act in the best interests of their client

Independent oversight

• Solicitors in England and Wales must meet requirements set by the Solicitors Regulation Authority, and in Scotland, those set by the Law Society of Scotland.
• Licensed Conveyancers in England and Wales must meet requirements set by the Council for Licensed Conveyancers, and in Scotland by the Law Society of Scotland
• Concerns or complaints about quality of service for legal services in England and Wales can be raised with the Legal Ombudsman and in Scotland with the Scottish Legal Complaints Commission.

Legal Action

Purpose

• Potential route of redress for consumers pursuing action which exceeds the financial limit of ADR or where they choose to pursue an alternate route
• Potential route for Trading Standards to bring action against businesses in breach of the Consumer Protection Regulations.

The maximum limit for a claim under the CCHB is £50,000 for homes reserved after 1 Jan 2024.

Download our handy guide to the different types of support available to home buyers.

For more information about the Consumer Code for Home Builders and how our Code helps protect new build home buyers, visit https://consumercode.co.uk

*Home warranty policies vary so please check your policy for details