Consumer code

Background

In 2004, Kate Barker conducted a review of the house building industry for Government, looking at customer satisfaction amongst other issues.  It gave the industry three years in which to improve customer satisfaction and to introduce an Office of Fair Trading (OFT) compliant consumer code - with the threat of a compulsory Code if there was no notable improvement.

The industry has since vastly improved its customer care with a national Customer Satisfaction Survey and the now achieved aim of increasing satisfaction levels from 56 per cent to 75 per cent.   

The Barker Review was overtaken by the Government's own Callcutt Review and then shortly after by the OFT's 'Market Study' in October 2008 which investigated the state of competition and consumer protection in the house-building industry.  Whilst giving the industry a relatively clean bill of health and providing some valuable insights, it concluded that there were still areas needing improvement.  These included the sales process and after-sales service, the adequacy and reliability of information provided to customers and the lack of a redress system for matters not covered by the warranty.

The UK house building industry had a choice; either produce a voluntary code, or Government would legislate with a system of dispute resolution to be funded by an industry levy.

Industry response

Strongly supported by the HBF, FMB, HBA, HfS, CEF(NI) and the HBF Retirement Housing Group, and with the crucial backing of NHBC and other warranty providers, an industry-led Code was developed over an 18 month period .  The CLG, to whom the OFT recommendation was handed, has indicated their satisfaction with the development and progress of the Code, indicating a preference for the industry-led Code.

In NHBC's view, an industry-led Code is the best solution in the circumstances and with the in-depth training that will be made available to house building professionals, the transition for builders to become Code compliant should be a smooth one.  The Code is about codifying best practice, but there are some new points of principle that have had to be introduced as a result of the OFT report.

What it means

For house builders, this will mean that they will need to develop systems and procedures to inform their customers on the provision of delivery dates, rights to terminate contracts, the reimbursement of reservation fees and deposits, and the external redress scheme.  Some builders may wish to do this by way of a Customer Charter.

House builders may also need to make some changes to Reservation and Contract of Sale documents, to maintain transparency with customers.  This will involve ensuring documents are amended to cover everything from reliance on oral statements, through to clarity in service and management charges.

Whilst this will mean changing some documentation and processes for house builders, it is important this Code is implemented sooner rather than later.

Not only will it ensure that home owners are as happy as possible with the home-buying process, but it means that the industry can take the lead on its own improvement, rather than being directed by Government.  The alternative to an industry-led scheme could have been more complex, harder to implement and more costly to administer, so this is a positive move for both the industry and consumers. 

How does it work?

The Code Scheme will be financed and operated via warranty bodies and led by a Management Board and supported by an Advisory Forum.
The Advisory Forum is the industry-wide representative body that represents, consults and advises on Code content, its practical application and operation, through which changes and improvements will be channelled.

Enforcement of the Code for NHBC registered Builders and Developers is by way of the NHBC Rules, amended to refer specifically to the Code.  This change will also come into force on 1st April 2010. 

There is also a set of Consumer Code Scheme Rules; these will be issued to all registered builders and developers in February.  These will explain how builders are to comply with the Code, how NHBC will deal with those builders who refuse, and the appeals process for dealing with those who are deleted from the register for no-co-operation with the Code and its adjudication service.

When will it be introduced?

The Code will be launched by the end of March 2010 and operational from 1st April 2010. It will apply to all home buyers who sign a reservation form on or after 1st April 2010.

Where can we get training?

To ensure that the industry is ready for the 2010 launch date, NHBC has arranged a series of training seminars on how the Code will affect your company, and how you can best comply with it.

The training by NHBC Training Services will cover how to adopt the Code into your Customer Charter, how to properly train staff to deliver to the requirements of the Code, and how to make sure all information, pre and post contract, is Code compliant. There will also be advice on how to deal with after-sales service and handle complaints

More information

The Code has been updated following recent feedback, including assessment by the Plain Language Commission.  The second edition of the Consumer Code and the Builder Guidance Documents are now available from the Consumer Code web site at www.consumercodeforhomebuilders.com 

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Consumer Code website:

 

Consumer Code for House Builders

Visit Consumer Code website

Consumer Code Requirements - Third Edition

Builder Guidance - Third Edition

Consumer Code Requirements - Third Edition (Welsh)

Builder Guidance - Third Edition (Welsh)

E-Learning

Consumer Code Annual Report

View the March 2013 report

NHBC builder support

NHBC Consumer Code toolkit (pdf)

Why by this home brochure (order hard copy)

Why buy this home brochure (pdf)

Reservation agreement

Reservation agreement notes

Window Sticker (pdf)