There is no PeachorLemon for the housebuilding industry yet, but it may be only a matter of time. More and more homebuyers are turning to the internet to express their dissatisfaction with their new homes by setting up an anti-housebuilder website. Add to this a stream of critical television programmes and newspaper reports, and you could be forgiven for thinking that the industry is coming under attack.
But is the attack justified?
Stephen Nancarrow, managing director of Inspector Home, says it is. He provides an inspection service for buyers of new homes and was a judge on the BBC's UK's Worst New Home programme. "I've been inspecting homes for more than 10 years and build quality hasn't improved. I saw a four-bedroom house recently that had more than 400 defects," he says. From the new homes it has inspected this year, Inspector Home has come across just a handful that have achieved what it believes is the best finishing quality. "Anything below 15-20 snagging issues on a house or 10 on a flat means that a housebuilder has cracked it," says Nancarrow. As for the Egan-inspired Holy Grail of zero-defects construction? "It's a dream. It won't happen," he says dismissively.
The activities of Inspector Home are not popular with a lot of the housebuilding industry. "A couple of developers have refused us entry to their sites," admits Nancarrow. But the company is gaining influence.
I’ve been inspecting homes for more than 10 years and build quality has NOT improved
Stephen Nancarrow, managing director, Inspector Home
It recently met an Office of the Deputy Prime Minister official to discuss the need for standards or even a trade body to govern snagging companies like Nancarrow's. Perhaps more surprisingly, five housebuilders, among them Fairview New Homes, have asked Inspector Home to turn gamekeeper and help them improve the quality of their products.
For Fairview, the company carries out random quality audits of its homes. "Fairview is spending the money upfront and is now seeing the benefits," says Nancarrow. "We've been working for them for 18 months and defects have dropped by 40% across the board." Improvements have been achieved in a number of ways. "They used to use finishers, like carpenters, to do the window mastic. We advised them to use a specialist mastic team and the quality is now much better," says Nancarrow. "You don't necessarily need to throw money at quality. A problem could be something like a poor product or it could be a poor relationship between a site manager and a subcontractor."
The difference between a good site and a bad one is really all down to the site manager, he believes. "You can go to a site that is dire, but two miles along the road, the same housebuilder will have another site that's great," he says.
Although Inspector Home sees little improvement in new home quality, there have been efforts to raise standards, be it through the Housing Forum-backed National Customer Satisfaction Survey, which is currently carrying out its third survey, or by regulation. One of buyers' greatest sources of dissatisfaction is having to move into a home that simply isn't complete and still has snagging issues or more major works to be carried out on it. But this has been tackled by the Council of Mortgage Lenders with a rule that came into force in England and Wales in April, and will soon be adopted in Scotland. Under the rule, a mortgage cannot be released unless or until a home has been certified as complete.
The cost of remedial works is two or three times the cost of doing it right in the first place
"Housebuilders have clearly responded well to the changes brought about by the CML initiative," says Rod MacEachrane, commercial director of the National House Builders Confederation. Before the initiative came into force, the NHBC was signing off up to a third of new homes after the date of legal completion, but that figure has now dropped to 6%. The number of "red letters" – notifications that a house has failed its pre-handover inspection and will not receive its certification for a mortgage – has dropped from 30% at the end of 2002 to just under 7%. Homes tend to fail their pre-handover inspection as a result of common problems relating to simple items, such as electrical wiring or and door closers.
In its Customer First survey, warranty provider Zurich has identified that it is relatively simple niggles that concern new homebuyers. This is the fourth year that Zurich has commissioned market researcher Pitcher Consultancy to survey buyers of homes built by its housebuilder customers, and it has registered little improvement in new home quality and customer service over that time. "The defects indicate that housebuilders are not addressing the basics," says Helena Pennycook, business development manager of Zurich. "The cost of remedial works is two or three times the cost of doing it right in the first place, and then there is the cost of lost goodwill and the staff time that is spent on it."
Pennycook points out that some of the items highlighted by buyers in its survey are not covered by Zurich's warranty and would be categorised as poor finishing rather than poor build quality. But Inspector Home believes that insurers should be offering homebuyers the sort of protection they want. "We would like to see the warranty market opened up so that the customer, rather than the housebuilder, chooses their warranty," says Vanessa Ambler, commercial director with the company.
As customers are becoming more discerning, housebuilders and insurers may have to do more.