Overview of the New Homes Quality Code (NHQC)

The New Homes Quality Board (NHQB) recently announced that more than 50% of all new homes sold in England, Scotland and Wales are now protected by the New Homes Quality Code (NHQC), and a large proportion of developers are registered with the NHQB. But what does this mean for developers and home buyers?

In short, the NHQC sets out robust obligations that developers must meet when building and selling new homes. The framework sets high standards for developers whilst aiming to deliver fair outcomes for home buyers who are disappointed with their purchase.

Two of the key requirements of the NHQC are that developers must have:

1. an effective after care service in place to deal with any issues or ‘snagging’ problems new home buyers may have; and
2. a robust complaints process in place to comply with mandatory milestones during the handling of a complaint for communication with home buyers (5, 10, 30 and 56 calendar days) in order to respond to their key concerns.

Areas that are not covered by the NHQC include claims for diminution in value or blight, personal injury claims and/ or claims that are not covered by the scheme rules of the New Homes Ombudsman Service.

The process

A home buyer has two years from reservation or completion of a property (whichever is the later) to make a claim under the NHQC.

If a home buyer makes a claim, the developer has the opportunity to respond. The Ombudsman will then make an assessment by reviewing all of the information and evidence provided by both parties. It will subsequently publish a draft decision and both parties will have ten days to provide any further comments and/ or information before the decision is finalised.

Remedies

If a complaint is upheld by the Ombudsman, the Ombudsman may require the developer to issue an apology and/ or explanation to the home buyer, rectify any defects or award compensation to the home buyer of up to a maximum of £75,000, payable by the developer.

Looking ahead

In March 2024, the NHQB hosted a Parliamentary Roundtable discussing ‘Building Consumer Confidence in New Homes’. Attendees were in favour of the NHQC and the New Homes Ombudsman Service becoming statutory to ensure that consumers are provided with consistent levels of protection and to raise the quality of new homes throughout the UK. Whilst it could take some time before it becomes law, it is worth bearing in mind.