Government changes to Help to Buy and to address “shoddy” new builds
The government has announced changes to the Help to Buy scheme and further plans for the New Homes Ombudsman to ensure that homebuyers have a place to turn to when their home is not up to scratch. We cast an expert eye over what is promised and what you need to watch out for when buying a new build
February 25, 2020
Help to Buy changes
Developers selling homes under the Help to Buy scheme between 2021 and 2023 when it closes, must adhere to a range of changes to the Help to Buy scheme announced by the Government this week:
Help to Buy developers must display star ratings
- Developers must clearly communicate their Home Builders Federation star ratings on Help to Buy related communications and advertisements. We’ve been quite critical of the HBF star rating in the past; it’s optional and doesn’t include all developers. It also only measures satisfaction at 8 weeks whereas defects can appear later. We would like to see an independent body take over the star rating scheme and make it mandatory to give consumers greater confidence.
- But the real missed trick here is that the government has decided not to force house builders to meet a higher quality standard in order to access funding under the Help to Buy scheme. This would have really made a difference to quality and service customers receive and act as an incentive to developers to build neighbourhoods and not just houses for sale.
Help to Buy homebuyers can get a survey
- And about time too! Under these Help to Buy changes, the government has said all buyers will be entitled to view the actual home being purchased, with their own surveyor if desired, before legal completion of sale. We think this should be the case for all new build homes, not just help to buy! To encourage developers to build right first time, buyers should be able to delay legal completion until any issues have been rectified. This should make a huge difference to the homeowners who face hundreds of snags that years for homeowners to get fixed.
- In the meantime, if you’re buying a Help to Buy home, ask your developer if they will let you inspect your home before you complete. If they won’t, get an independent snagging survey as soon as you move in to ensure your home is completed to a high standard and to help you get problems fixed. The rule of thumb is the earlier you get a survey done, the more likely the builder will commit to putting things right.
Ground rent peppercorn on Help to Buy leaseholds
- The government has been under increasing pressure to reform the unfair leasehold system. We therefore welcome that for Help to Buy homes, any ground rent on the sale of leasehold properties through the scheme must be restricted to a peppercorn rent.
Help to Buy house builders must be members of New Homes Ombudsman
- Builders must be members of the New Homes Ombudsman, when it finally comes into being and access will be free to consumers (see below)
A New Homes Ombudsman
- This Ombudsman will have statutory powers to award compensation, ban rogue developers from building, and order developers to fix poor building work.
- First promised in 2018, the government say the Ombudsman will step in to “help homebuyers with issues from sloppy brick work to faulty wiring”
- Where people are in dispute with developers, the government insist the Ombudsman will “act swiftly and independently to resolve any issues – ending the injustice of people facing long waits and costly court cases trying to sort out problems with their new homes.”
- New laws will also require all developers to belong to the Ombudsman, giving all homebuyers free access to swift redress.
Good news we say, but please get on with it! We’ve been talking about this for years and need to see this body established in a way that puts consumers first, rather than being made up of industry representatives, protecting industry interests.
In the meantime, if you have problems with your new build, take a look at our guide How to fix problems with your new build. An independent snagging surveyor can identify any issues and help you get them fixed.
For the full announcement see the Government site