Labour has made it so housebuilders must comply and join the New Homes Ombudsman service
We look at how the New Homes Ombudsman could affect those buying or selling new homes(Image credit: Richard Kiely)
The government has officially announced its commitment to improving consumer protections in the housebuilding market by making participation in the New Homes Ombudsman Service mandatory for all developers.
This move, following recommendations from the Competition and Markets Authority (CMA), aims to address widespread quality issues in new build homes.
However, the impact will not be just felt by those buying and selling new build homes and we reveal what anyone who is buying or building a house needs to know about the New Homes Ombudsman Service.
A unified consumer code for homebuyers
The new framework introduces a single mandatory consumer code to ensure consistent standards across all housebuilders in Great Britain.
Nigel Cates, Chief Ombudsman for the New Homes Ombudsman Service, welcomed the development, stating: “We warmly welcome the government’s commitment to require all housebuilders to join the New Homes Ombudsman and abide by a single quality code.
"This will ensure all those purchasing new homes enjoy the same level of protection and recourse to an Ombudsman service, no matter who their developer might be.”
Rob Brighouse, Chair of the New Homes Quality Board, emphasised the benefits for homebuyers, saying: “This will mean that there is one single framework (the Code) for all developers to improve the standards of quality and customer service provided to all new homebuyers. We believe that this decision will help to create a level playing field for all new homebuyers, offering the same route for redress and protections.”
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The government is also addressing issues for homeowners living on privately managed estates.
It has agreed to principles set out in the Leasehold and Freehold Reform Act 2024, including capping sales information request costs and providing better guidance for residents’ management companies.
Matthew Pennycook, Housing and Planning Minister, highlighted the broader implications of these reforms: “The CMA was right to highlight areas for improvement in the housebuilding market. That is why we will empower homeowners to challenge developers over poor quality new homes and bad service.
"Alongside this, our updated National Planning Policy Framework and the reinstatement of mandatory housing targets for councils will ensure communities have the homes and necessary infrastructure to thrive.”
The New Homes Quality Code
The New Homes Ombudsman Service oversees compliance with the New Homes Quality Code, which sets out clear standards across four areas:
Selling a new home
Legal documents, inspections, and completion
After-sales service and complaints
Solvency and legal rights
These standards are underpinned by ten principles, including fairness, safety, transparency, and compliance. However, critics have pointed out significant gaps in the Code.
It excludes defects discovered more than two years after purchase.
Major issues are deferred to warranties rather than being directly addressed.
It lacks a clear standard for enabling developers working on self build projects.
Jonathan Webb at Lester Aldridge, a national law firm that deals with construction law, has also criticised the New Homes Ombudsman Service, highlighting that the new Quality Code excludes major defects and issues that arise more than two years after purchase, undermining its effectiveness.
“By leaving such significant matters to warranty providers, the scheme offers little recourse for buyers facing serious problems,” he argues.
Webb also criticises the NHO’s oversight structure, saying it is “overly industry-led,” which raises concerns about its impartiality. Additionally, he describes the Ombudsman’s enforcement powers as “minimal,” asserting that mandatory participation would do little to address the systemic issues in housebuilding.
Additionally, there are doubts about enforcement. Sarah Cardell, CEO of the CMA, acknowledged the government’s efforts but noted ongoing challenges: “We welcome the government’s response to our recommendations on housebuilding, which we put forward to get people better protections and open the door to delivering more good quality homes.
"Housing is an essential area for consumers and driving economic growth, so we will assist government as they take forward our solutions.”
Jonathan Webb
Jonathan Webb provides legal advice in construction law, focusing on procurement strategies and the selection of standard contract forms such as JCT and NEC. He advises on and drafts amendments to standard conditions. His work includes preparing and negotiating project documents like building contracts, collateral warranties, reliance letters, vesting certificates, bonds and guarantees.
Impact on self builders
The New Homes Ombudsman could influence some self builders(Image credit: Richard Gadsby)
The scheme primarily targets commercial developers and aims to enforce higher standards for new build homes, including improved consumer redress for quality and service issues.
However, self build projects are largely excluded unless the home is built with the intention of being sold within a set period. This aligns with feedback from the National Custom & Self Build Association (NaCSBA), which supports the exemption due to the unique nature of self-build projects involving multiple contractors and suppliers.
Jonathan Webb emphasises the New Homes Ombudsman's limited scope and impact on the self build market.
He concludes: “Government energy should be directed elsewhere, such as strengthening local planning and building control services and establishing enforceable quality standards, rather than adding red tape for self-builders.”
There also remains uncertainty about the exact time frame and legal definitions of self build projects within the scheme’s scope.
NaCSBA suggests that self builders can find some recourse by using its Code of Practice, which provides an alternative dispute resolution mechanism for contractor-related issues.
While supporters argue that the New Homes Ombudsman is already improving satisfaction rates, detractors question its effectiveness.
Many suggest that better investment in local planning and building control authorities would yield more significant results.
As the government pushes to meet its target of 1.5 million homes this Parliament, Nigel Cates remains optimistic: “We look forward to working with the UK and devolved governments to implement the plans as swiftly as possible.”
The real test of these reforms will be whether they lead to tangible improvements in the quality and service experienced by new homebuyers.
News Editor Joseph has previously written for Today’s Media and Chambers & Partners, focusing on news for conveyancers and industry professionals. Joseph has just started his own self build project, building his own home on his family’s farm with planning permission for a timber frame, three-bedroom house in a one-acre field. The foundation work has already begun and he hopes to have the home built in the next year. Prior to this he renovated his family's home as well as doing several DIY projects, including installing a shower, building sheds, and livestock fences and shelters for the farm’s animals. Outside of homebuilding, Joseph loves rugby and has written for Rugby World, the world’s largest rugby magazine.
