This scene, which was screened a fortnight ago, may become a regular feature of Watchdog, with the housebuilders taking turns to wear the black hat – a few weeks before, Campbell's was exposing Persimmon's poor performance. Away from the cameras, housebuilders say that they are popular with these programmes because they make easy targets, that some customers are playing on the compensation culture, that customers' expectations have risen and that they really are striving to build better quality homes.
But this defence was weakened by the findings of a government-backed survey published in February, which found that the quality of new homes has declined over the past three years. That finding has since been seized on by Kate Barker, adviser to the government, who has issued an ultimatum to housebuilders to improve customer satisfaction or face the scrutiny and censure of the Office of Fair Trading – as estate agents did last month. Now it is not only television that is putting housebuilders on trial.
The National Customer Satisfaction Survey, produced by the Housing Forum and carried out by Mori, has published assessments of the performance of nearly 40 of the country's top housebuilders in 2001, 2002 and February of this year. Over the course of the three surveys it was demonstrated that homebuyers were progressively less satisfied with their homes and were finding an increasing number of defects in the build quality.
Those findings prompted Kate Barker to recommend in her review of housing undersupply that housebuilders must improve customer service dramatically. Barker advised that two key measures in the Housing Forum survey – buyers' willingness to recommend their housebuilder to others, and satisfaction with service quality – should show an improvement of about 20% over three years. To help achieve that aim, the House Builders Federation was told to develop a code of conduct governing sales that was in line with the OFT's consumer codes approval scheme. If standards do not improve, then the OFT should carry out "a wide-ranging review of whether the market for new housing is working well for consumers", says one of the 36 recommendations in Barker's final report.
There is a need to provide consumers with some sort of protection
Vanessa Ambler, Inspector Home
Rumours had been circulating in housebuilding for some time that the OFT was becoming interested in its sector, but many in the industry are unhappy with Barker's ultimatum and the basis on which it was made. "We have undertaken in-depth surveys of our customers for the past four years and have evidence that customer satisfaction levels have improved considerably in this time," says Tim Hough, managing director of Miller Homes. "If Kate Barker was able to look at the wider picture and had access to the detailed studies that many housebuilders are carrying out, I am sure that she would find that this is generally the case across the industry."
"I don't think the industry's gone backwards," says Rod Maceachrane, commercial director of the National House Building Council. "We've seen quite a positive shift in the past 12 to 18 months." MacEachrane says dispute resolution cases, the last resort of the unhappy homebuyer, are down 14% year on year, which it believes contradicts the findings of the Housing Forum survey. "The Housing Forum survey compares the industry against itself and there is not much benchmarking. It is generic data that is not that useful," he says.
This month the NHBC begins surveying new homebuyers for its own customer satisfaction survey, which will seek customers' in-depth feedback on the service they get from their housebuilder. The survey data will not be presented as a chart that allows the public to compare housebuilder against housebuilder, as the Housing Forum does. In fact, many of its findings will not be publicly available at all. Housebuilders covered by the survey will receive a report showing how they compare with their peer group, and how their own individual operating divisions are performing; only national and regional trends will be available for public consumption.
The HBF for its part has no immediate plans to respond to Barker's call to create a code of conduct this year. "We'll have to see whether a code of conduct is necessary," says Pierre Williams, head of media at the HBF. "The evidence suggests that the public perception of the industry will change. I think we'll see that a mandatory code of conduct won't be necessary."
But Inspector Home, the Hertfordshire-based home inspection service that takes up the cause of dissatisfied new homebuyers, believes that there is little likelihood of either public perception or housebuilder performance improving. "If housebuilders don't want to change, it won't happen. The only way things will change is if developers take things on themselves," says Vanessa Ambler, commercial director of the company.
Inspector Home is pressing for stronger measures than the OFT's code of conduct. Last month, it submitted a petition to the House of Commons, calling for new homes to be included in the Sale of Goods Act. "There is a need to provide consumers with some sort of protection," says Ambler.
Self-regulation …What difference would it make if housebuilders had to comply with a code of conduct under the OFT Consumer Codes Approval Scheme?
The scheme is self-regulating and puts the onus on the code sponsor, a trade body or group of businesses, to administer the code and uphold its standards. Each industry comes up with its own code, which is then approved by OFT. The only sanction open to the OFT is to withdraw its approval for a code if it decides it is not serving its customers.
OFT guidelines say a code should give customers:
- Adequate information about goods and services
- Clear and fair contracts
- User-friendly and speedy procedures for dealing with complaints
- Low-cost, independent redress if a complaint is not dealt with satisfactorily.
… or legislationIf The Sale of Goods Act were applicable to new homes, it would give consumers a lot more power, and housebuilders could be left facing hefty bills for faulty homes. The Sale of Goods Act says goods must:
- Be as described, and fit for any purpose which the consumer makes known to the seller
- Of satisfactory quality. Aspects of quality include fitness for purpose, freedom from minor defects, appearance and finish, durability and safety.
If goods are not of satisfactory quality, the buyer is entitled, providing they act within a reasonable time, to reject the goods and get their money back. Even if the buyer had lost their right to reject the goods, they would still be entitled to damages.