Industry bodies improve accountability to head off OFT inquiry into falling customer satisfaction

Housebuilders are to pre-empt the Office of Fair Trading’s report into their industry by formulating their own code of conduct.

Imtiaz Farookhi, chief executive of the NHBC, said the code would set out rules for consumer protection and would probably require an agency to implement it.

The OFT is investigating the reasons behind falling levels of consumer satisfaction with new homes since 2003. If it finds that housebuilders are at fault, it can recommend changes to government policy.

A separate review of the industry, carried out by former housebuilder John Callcutt, last week recommended that firms be denied access to government land and grant if they failed to meet customer satisfaction targets.

The code, which will be compulsory, will allow buyers who are in dispute with a housebuilder to appeal to an independent agency. It will also offer protection on issues not covered by warranties, such as delays.

The NHBC, the Home Builders Federation (HBF) and the Council of Mortgage Lenders are taking a lead in drafting the code.

John Slaughter, director of external affairs at the HBF, admitted that the OFT investigation had led bodies to expedite improvements to their customer services.

A spokesperson for the OFT declined to say whether the code would affect the review but added the organisation was “happy to accept an application for an approved code”.

Farookhi said he was uncertain whether the industry would set up an ombudsman. He said: “There will have to be some kind of structure but what form it takes is still to be worked out.” It is to be launched by Easter, before the OFT’s final report is published next summer.