In October 2024, the government accepted the Competition and Markets Authority’s recommendations to create a single mandatory consumer code, along with a new homes ombudsman service. This was seen as great news for new home buyers, as it is expected to improve the buying process and protect their rights. However, it has yet to decide how they will be implemented, who will be responsible, or when the changes will happen. Since new laws and consultations are required, it could take some time for these changes to take effect.

What protection do new home buyers have right now?

Currently, several consumer codes are in place to protect buyers of new build homes. Which code applies to a builder often depends on their warranty provider. Leading warranty providers like NHBC, Premier Guarantee, Checkmate, and LABC Warranty require builders to follow the Consumer Code for Home Builders (unless builders opt to join a different code scheme).

Some providers, such as Ark Insurance Group, ICW Warranty, and ABC+ Warranty, have their own consumer codes, which builders must follow if they’re signed up to these warranty schemes.

The good news is that several of these codes, such as the Consumer Code for Home Builders, Ark Insurance Group, and ICW Consumer Code, are approved by the Chartered Trading Standards Institute.

Key consumer codes for new home buyers

The two main codes are:

• The Consumer Code for Home Builders.
  Introduced in 2010, this code aimed to make the home buying process fairer and more transparent and was designed to protect buyers and improve their experience. It is thought to cover approximately 10,000 house builders of all sizes.  The most recent version of this code came into force on 1st January 2024.
• The New Homes Quality Code.
  This code was published in December 2021 with the intention that all builders would be required to sign up to this code, however registration with the New Homes Quality Board is currently voluntary. Builders who sign up to the New Homes Quality Board must follow this code, which is enforced by the New Homes Ombudsman Service. Many of the major UK house builders have registered with the New Homes Quality Board and it is estimated that 54% of all new homes being built in England, Scotland and Wales are covered by the New Home Quality Code

What do these codes cover?

The main consumer codes provide similar protection for new home buyers, from the moment buyers reserve their home through to two years after completion. Some key protections include:

• Marketing and Selling: Builders must give buyers clear and accurate information before buyers commit to buying a home. High-pressure sales tactics are prohibited.
• Build Quality: Buyers have the right to carry out a pre-completion inspection of the property.
• After-Sales Support: The codes set out requirements for after-sales service and a clear process for handling complaints.

What’s next for consumer protection in the home building industry?

While it may take some time to see the full implementation of a single, mandatory consumer code, it is hoped it will strengthen protections for buyers. A unified code would require all builders to follow the same rules, and the addition of a new homes ombudsman would provide an independent body to resolve disputes. Non-compliance could lead to harsher penalties for builders who don’t meet the standards.

The future seems focused on building a more robust framework for new home buyers, ensuring builders are held accountable not just for the quality of their homes but also for the overall customer experience. It is considered a step towards making the homebuilding industry more transparent, ethical, and consumer friendly.