Building Safety Bill

Lord Best Excerpts

2nd reading
Wednesday 2nd February 2022 Lords Chamber

[Lord Best (CB)]

My Lords, my contribution to this debate relates to the new homes ombudsman, the scheme that will be established by the provisions in Part 5 of the Bill. I declare past interests as the previous chair of the Property Ombudsman and chair of the Government’s working group on regulation of property agents.

Among the catalogue of criticisms of this country’s major housebuilders, redress for buyers of defective properties and victims of shoddy workmanship, scams and dodgy deals deserve our urgent attention. We are all familiar with the long list of ways in which the volume housebuilders have let us down—building safety, yes, but also poor design, low space standards, soulless estates, broken promises to provide affordable homes, exorbitant profits and bonuses for bosses, leasehold scams, sales agreements that contain unfair conditions and excessive charges, lack of investment in training, skills, and apprenticeships, building on greenfield sites when brownfield development would be far more appropriate, and building out only at a speed which ensures continuing scarcity and ever-higher prices. We need also to confront housebuilders’ defective workmanship and dreadful consumer/customer service in responding to entirely justified complaints by home buyers. It is excellent that the Government are seeking in this Bill to address this issue.

The proposal for a new homes ombudsman came from two reports by the All-Party Parliamentary Group for Excellence in the Built Environment, supported by the Construction Industry Council. I declare my interest as a vice-chair of that APPG alongside my noble friend Lord Lytton. Our first report, in 2015, entitled More Homes, Fewer Complaints, commended the idea of a new homes ombudsman. Our second inquiry, in 2018, spelled out how an ombudsman could drive up standards and improve consumer rights. It was skilfully chaired by Eddie Hughes MP, who is now the very Minister responsible for implementing the initiative. He says in his foreword to our report:

“I have been contacted by many MPs with despairing constituents who have implored them to help achieve redress from housebuilders refusing to rectify poor workmanship … Consumers desperately need greater leverage to drive a change in this culture”.


Submissions received by the inquiry from home buyers described how builders failed them, making buying a new home, as one first-time buyer said,

“the worst decision of their life.”

Surveys show that well over 90% of home buyers have experienced snags or defects when moving in, and in over 70% of those cases the problem has never been fully resolved. We are a very long way from zero-defect construction. It is quite extraordinary that the new house buyer has to expect snagging difficulties, problems with doors and windows not fitting properly, leaks and cracks. If cars—vastly more complicated things than houses, with thousands of working parts and the capacity to travel safely at speed—can be purchased without defects then why not static, solid, basic houses?

So it is very good news that we are now to have an ombudsman to whom the home purchaser can turn. There have been concerns over the suggestion that the industry-based New Homes Quality Board, rather than the Secretary of State, might appoint the ombudsman and write their code of practice. This could undermine public trust and lead to accusations that the housebuilders were pulling the strings.

My short list of questions today to the Minister, whom I congratulate on bringing forward this legislation, relates to the powers that the new homes ombudsman will possess. In essence, I am asking: will the ombudsman have real teeth?

First, could the Minister confirm that the new homes ombudsman will have the power to expel a housebuilder from the redress scheme—for example, for non-payment of compensation to a buyer—and that this would mean, quite properly, the ombudsman having the power to stop any further sales by a builder since they could not continue to sell homes if no longer in the scheme?

Secondly, will the ombudsman be able to award high enough levels of compensation to deter bad practice?

Thirdly, in common with many ombudsman schemes, will this ombudsman have the power to undertake own-initiative investigations around issues likely to justify multiple complaints, without each complainant having to make a separate case, and will it be able to publish guidance accordingly?

Fourthly, to avoid sharp practices and eliminate detrimental clauses in the small print, will the ombudsman be able to require the use of standardised sales contracts?

Fifthly, can it be that the ombudsman will have jurisdiction only for the first two years after a purchase, bearing in mind that defects often emerge after that date and that warranty providers exclude all the builder’s smaller defects that can make life miserable? The Legal Ombudsman, for example, can take action up to six years after a problem has been identified.

Sixthly, will the ombudsman be able to specify that builders use only approved warranty providers that have passed a rigorous assessment?

Seventhly, will the ombudsman be able to ban non-disclosure agreements—“gagging orders”—which some builders, for fear of gaining a poor reputation, have insisted on from buyers whose homes have been subject to remediation?

Eighthly, will the ombudsman publish its decisions, to name and shame offenders and exonerate the others?

Lastly, will the ombudsman be able to extract a sufficient levy from the housebuilders to resource all the work necessary to deal with what I suspect will be a multiplicity of complaints from all over the country?

I look forward to hearing the Minister’s response and, I hope, to being able to support this important ingredient in the Bill.