Housebuilders to work on redress scheme

Housebuilders are to set up new schemes to protect consumers following a report from the Office of Fair Trading (OFT) which has recently completed a study of the market.

While the OFT found that the sector was broadly competitive, it concluded that a code of conduct and a redress scheme are needed for customers who are dissatisfied.

The watchdog is concerned that homebuyers experiencing faults with their properties or delayed completion dates can suffer significantly, although it acknowledged that many of the faults in new properties were quickly fixed.

It has also raised issues about the clarity of information provided by housebuilders to their customers (particularly in relation to reservation fees) and says some of the terms and conditions in housebuilders’ contracts are potentially unfair.

The Home Builders Federation, National House Building Council, the Council of Mortgage Lenders and other representative bodies are now working on a code of conduct and redress scheme but do not expect to have either in place until March 2010.

The process will be watched carefully by the OFT because if progress is inadequate or solutions are ineffective, the watchdog could recommend the introduction of statutory measures that would be funded through a levy on the industry.

Discuss this in the Finance Markets forums

Story link: Housebuilders to work on redress scheme