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

Continuation – !3 For the avoidance of doubt, we believe the single ombudsman should be built out from the existing main one – the Property Ombudsman. This ombudsman is far from perfect, but it is the most independent and effective of the three, and is largely constrained by its limited remit and weak powers. The benefits of having a single strong property ombudsman covering disputes ranging from estate agents to housebuilders would be: • Far easier for consumers to navigate – just one place to go • Naturally far higher profile, with more media coverage. Multiple ombudsmen get lost in the noise • Much easier for parliament, government, consumer groups and media to scrutinise its performance, and ensure high standards of operation. It could be called to give annual evidence to the DCLG Select Committee • Better resourced, and have efficiencies of scale, able to hire more specialist expertise and provider higher quality services (eg use of digital) • Better able to stand up to pressure from industry, as it is more widespread across different subsectors. It would be difficult for housebuilders, estate agents and architects to co-ordinate themselves to muzzle it • Able to spread learnings from one subsector of property to another – there is a lot of overlap across a lot of different issues, and a single ombudsman would help ensure consistency across the industry. That would in itself help consumer understanding and make complaints easier • A single ombudsman would be better able to raise standards across the industry, and to proactively tackle systemic abuses when it sees them arise Membership of the ombudsman must be mandatory. In the past, membership of property ombudsmen has been voluntary, which fundamentally weakens the system and brings it into disrepute. The funding model for the ombudsman is critical to its success. It must be funded by case handling fees, paid for by industry not consumers, and not subsidised by the taxpayer. Again, the Financial Ombudsman is the successful role model to follow – it is funded by case handling fees of £550 paid for by the financial services company irrespective of whether they win or lose the case. This has many advantages: • a powerful financial incentive for companies to resolve complaints with consumers before it goes to the ombudsman (they save the £550 fee), making the companies a lot more co-operative and less defensive and obstructive • it relieves the Ombudsman of painful budgetary constraints leading to worries they can’t hire the staff to handle complaints – when the number of complaints