Public consultation on changes to the New Homes Quality Code

Introduction from the Chair of the Code Council:

When the NHQB introduced the New Homes Quality Code to focus on the service delivered by developers to their customers, it committed to having the Code regularly reviewed by an independent council, with an in depth review every third year. With a background in resolving consumer disputes, I was appointed to chair the council which has a membership including those representing consumers, developers, insurers, conveyancers and the New Homes Ombudsman.

We started by asking for feedback from stakeholders on the existing Code and on areas that are not, but perhaps should be, included. That produced a list of issues which we considered in depth and on which, where necessary, we took advice. From there we decided on proposed changes that are the basis for our consultation.

Modern regulation has shifted from tick box compliance to a much more collaborative system with a strong ethical foundation to “treat customers fairly”. That is what the NHQB Code is based on and is the core of our review. Regulation is becoming increasingly outcomes focussed – asking whether following codes and guidance has made a positive difference to the service or product received. And regulation is seen as an opportunity for learning and improvement, hence our review in the first place.

With those principles in mind, please consider our proposals for change, ask yourselves whether they will add to the continuous improvement the NHQB, developers and consumers all want to see, and if we have missed something then feed it back to us before midnight on 4 November 2024.

Lewis Shand Smith, Chair of the Code Council

Summary of proposed changes to the New Homes Quality Code (relevant section of the Code shown in brackets):

Changes to the list of what's not covered by the Code (Introduction).
Confirmation that valid snags or defects should be resolved, regardless of how they are identified (Introduction).
Addition of an expected timeframe for the developer 'transition period' (Introduction).
Confirmation that the requirement for sales & marketing material not to be misleading, also applies to photography (Section 1.1).
New requirement for developers to comply with the list of legally required 'Material Information', where relevant (Sections 1.2 & 2.2).
New requirement for developers to provide the overall size of the new home in addition to room dimensions (Section 1.2).
New requirement to give customers enough time to consider any short-term sales incentives (Section 1.3).
Additional requirement related to ‘drip pricing’ (Section 1.3).
If developers receive any fee or reward for recommending an advisor/product/service, then they must tell the customer the amount as well as who will receive it and for what activity (Section 1.7).
Reduction of the timescale for the Affordability Schedule from 10 years to 5 (Section 2.2).
Ability for customers to request an earlier exchange date (conclusion of missives in Scotland) if required (Section 2.2).
Additional requirement to confirm how shared spaces, roads and amenities of the development will be managed (Section 2.2).
Additional reference to anti-money laundering regulations (Section 2.4).
Clarity around warranty providers, and information about the warranty itself (Section 2.5 & 2.11).
Customers to be able to undertake a pre-completion inspection themselves or appoint a professional (Section 2.8).
Clarity around 'major changes' where the customer has the opportunity to cancel the reservation (Section 2.9).
Clarity around occupation of a complete new home (Section 2.10).
Removal of out-of-date references to 'habitation certificate' (Section 2.11).
Clarity around any outstanding work in the home and also on the wider development (Sections 2.11 & 2.12).
Changes to the requirement relating to protection of consumer monies (Section 2.13).
Additional requirement where alternative accommodation is required (Section 3.2).
Definitions of Estate Charges and Service Charges (Glossary).
Removal of reference to ‘major defects’ (Introduction & Glossary).