Are British New Builds Declining in Quality?

New build properties have always carried a certain amount of emotional heft with them. For many people, a sparkling new two-bed on the quiet estate just out of town is their first experience of owning property – especially in the current marketplace with its acute shortage of affordable housing.

But could that dream fast be becoming a nightmare for some first-time buyers? Many buyers themselves certainly seem to think so. According to the HomeOwners Alliance’s The Home Owner’s Survey 7th Annual Report, 63% of UK adults believe housing quality is declining and becoming a serious problem.

In addition, the report indicates the quality of new build property could be one of the key drivers of negative perceptions of the UK’s housing stock. Some 40% of new-build homeowners report being unhappy with the snagging process, with as many as 20% concerned they were ‘coerced’ into paying the deposit before being able to identify snags and defects in their new home. 

More worrying still, over a third of respondents didn’t agree that their builder or developer resolved these defects within two years of the purchase date. And, some 43% disagreed that the warranty provider had fulfilled its responsibilities or explained the warranty properly. 

It could even be having a disastrous effect on the very aspiration of owning a home, once viewed as second only to births and weddings as the proudest day of many people’s lives. Some 72% of those surveyed felt that the property on offer for a first home is demotivating because the quality of the product is so poor.

What’s more, buyers perceptions appear to be being borne out in reality. According to housing charity Shelter, More than half of purchasers of new builds in England have experienced issues with construction, fittings and utilities.

What’s going on?

The Housing Crisis Comes Home to Roost

Perhaps the simplest reason for any lack of quality in new-build properties is the sheer speed at which they’re being built. There are very few policies that command universal appeal across the political spectrum but everyone from the most ardent Corybnite to the keenest Farage devotee is in accord over the need to build more houses.

The result is pressure handed down from central government to local authorities and developers to build as many houses as possible, as quickly and cheaply as possible. UK housebuilding figures hit a ten-year high in 2017-18, and this in an environment with precious little state investment, so it’s perhaps not surprising that some of these houses have been more thrown up than built.

Regulation (or lack thereof)

People are often surprised by the lack of regulation in the UK building sector. While there is a multitude of building regulations for the buildings themselves, covering everything from ventilation to weatherproofing, the industry is subject to the lightest of light-touch regulation.

Builders are not legally obliged to obtain a licence to work, and there is no official regulatory or licensing body for the industry. The more virtuous can sign up to bodies such as the National House Building Council (NHBC) or the Federation of Master Builders, but this is entirely voluntary.

The outcome of this is depressingly predictable; with no regulatory oversight and little punishment for substandard workmanship, it’s to be expected that less scrupulous builders cut corners. After all, they’re given every incentive to do so.

An Oligopolistic Market

The last big contributor to declining quality is the nature of the UK market. New-build property development is dominated by an oligopoly of 4 or 5 large firms, with crisscrossing webs of subcontractors doing most of the actual building work underneath.

Unsurprisingly, this leads to an accountability deficit and no real quality control as large developers struggle to adequately assess subcontractors’ work and bureaucratic buck-passing when buyers complain. Housing giant, Persimmon admitted as much in a Channel 4 documentary aired earlier this year stating: “We fully accept that on too many occasions in the past we have fallen short on customer care and the speed and empathy with which we dealt with problems.”

What Can be Done?

Firstly, regulation must be far tougher. As discussed, the new-build sector currently resembles something of a wild west scenario with little incentive for many builders to do anything other than construct hastily cobbled together, poor quality housing. Of course, any drive towards stricter regulation of the industry must come from central government, something that looks unlikely at present.

In the absence of regulation, there are calls from some quarters – most notably The Homeowners Alliance – for the introduction of a snagging retention fee. Under such a scheme, new-build homeowners would be permitted to withhold funds from house builders until they rectify faults. According to a recent poll by the Homeowners Alliance, this policy has overwhelming public support, with almost 9 in 10 (87%) of new-build homeowners backing the proposal.

Finally, on a more practical level, homebuyers can guard against poor-quality property by undertaking a homebuyers survey, as well as carefully checking for snagging – hard though that may be in the face of pressure from their agent to make an offer.

New build housing doesn’t have to be this way. The recent publicity surrounding the award-winning Goldsmith Street development in Norwich serves as a timely reminder that when we build well, we’re constructing so much more than bricks and mortar.