HomeOwners Alliance response to Call for Evidence on the New Home Ombudsman Enquiry

Continuation – !2 However, we disagree that the best way to do this is to set up a dedicated New Homes Ombudsman. Rather, it would be much better to give the power to an existing ombudsman - and in particular, the Property Ombudsman. There are already three different property ombudsmen covering the industry: the Property Ombudsman, the Ombudsman Service: Property and the Property Redress Scheme. On top of this are numerous industry adjudication schemes (like the Consumer Code for Homebuilders). Rather than each having a specific purpose, there is considerable overlap between them. For example the TPO Code of Conduct – which covers the sale of pre-owned houses – covers many of the same issues as the new build codes of conduct, which cover the sale of new houses. This complex, overlapping and competing complaints system leads to massive confusion for homeowners, who often find it incomprehensible and too difficult to navigate. This complexity even leads some to simply give up on their complaints. It also makes it more difficult to hold the system to account, and leads to lower public awareness. The competing systems provoke gaming by the industry, and the fragmentation means that each individual adjudicator and ombudsman is weaker and more prone to industry capture. Setting up yet another property industry ombudsman – the fourth – would lead to even greater consumer confusion and exacerbate the fragmentation, making the complaints system less robust. If industry are welcoming it, you should ask yourselves why. We have real concerns that industry see a new home ombudsman as inevitable and are already planning to “capture” it to ensure it is not too independent, possibly by pre-emptively establishing one of their own to ensure that a properly independent one is not set up. There is a very high risk that a new New Homes Ombudsman would end up being designed to meet industry’s needs, not consumers’ needs. In contrast, we strongly believe that the interests of consumers – whether buying, selling, or simply owning a home – would be better served by having a single, strong property ombudsman. Financial services as a whole is a bigger sector than property, but it has just one powerful ombudsman – the Financial Ombudsman Service – which is able to effectively arbitrate between consumers and banks and insurance companies because it has sufficient scale. It is highly respected, high profile, and deemed by all sides to do a good job. This should be the model for the property sector, rather than proliferating ombudsmen. This would mean folding the three existing property ombudsmen into one and giving it responsibility for covering new build complaints, as well as other issues in the property sector such as leasehold disputes or complaints against architects. We realise this is outside the scope of your review, but the three existing ombudsmen could be folded into one by simply requiring all estate agents to belong to one named ombudsman, rather than any authorised arbitration scheme.