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Questionable new-build home quality reinforces buyer beware approach

by: Heather Greig-Smith
  • 28/02/2017
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Questionable new-build home quality reinforces buyer beware approach
Housebuilder Bovis’s depressing financial results on the back of disgruntled customers and poor quality homes, sounded a note of alarm.

Bovis’ results followed complaints of shoddy-new build affordable homes raised by a House of Commons committee earlier this month.

Given that the government’s Housing White Paper intends to increase significantly the number of new homes being built, should consumers have confidence in new-build products?

Ray Boulger of broker John Charcol said it is important that brokers help buyers understand the risks they are taking, especially as many purchasers of new-build homes are first-time buyers.

“Anybody who has not only seen the reports of quality issues that Bovis and others have had, but also the leasehold scandal that several of the major lenders were involved in, needs to go into buying a new-build property with their eyes open,” he said.

He added that buyers of new homes often fail to commission proper surveys because they feel it is unnecessary with the builder’s two-year guarantee and National House Building Council (NHBC) warranty. However, he said they don’t always do the job people expect them to.

“One of the easiest ways to reduce the risk is to commission a Home Buyers Report instead of just relying on the basic mortgage valuation. It will either give a clean bill of health – bar snagging issues they might have overlooked – and the comfort of knowing there aren’t serious problems, or if there are problems it would pick them up. It’s a relatively small amount to pay for peace of mind.”

Boulger added that the majority of buyers are unlikely to be aware of quality concerns contained in recent reports. He also said some may feel pressured by developers to complete quickly or to use their recommended conveyancer and broker.

“They are likely to be getting a significant proportion of their business from the developer – my advice would be to pick an independent solicitor and mortgage broker,” he said. “Then you have two professionals who can highlight issues that might have been overlooked by someone beholden to the developer.”

Others said the general quality of new-build homes was rising.

Chris Schutrups is managing director of The Mortgage Hut Group, which acquired a new-build brokerage last year. It looks after Berkley Homes in the southern region as well as working with other builders.

He said recent reports have given an incorrect picture of new-build quality. “Quality has never been better,” he said. “There are builders out there who are building lower-quality products but poor quality products are few and far between. There’s a lot of builders out there putting their name to really good products.”

Schutrups added that Help to Buy has been “the best thing to happen to new build”. “A fair proportion of people outside London rely on Help to Buy to buy a new-build property. It makes new build one of the most affordable ways to get on the property ladder.”

However he said there is room for improvement in the valuation process for new build homes. It often does not distinguish between different qualities – treating new builds as a single category.

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