Memorandum by the National House-Building
Council (NHBC) (DHB 30)
INTRODUCING NHBC
NHBC's (the National House-Building Council)
primary purpose is to raise standards in the new house-building
industry and provide consumer protection for new home-owners.
As the leading warranty and insurance provider for new homes in
the UK, NHBC was established 65 years ago as a not for profit
company.
AN INDEPENDENT
AUTHORITY
NHBC's experience, knowledge and unrivalled
understanding of the UK house-building industry, means it is a
respected voice and can exert a positive influence to raise standards
and protect consumers.
NHBC is independent of the house-building industry
but works closely with it. Our governing Council of 73 includes
all the major stakeholders with an interest in raising house-building
standards for home buyers. These include the Local Government
Association, The Royal Institute of Chartered Surveyors (RICS),
The Royal Institute of British Architects (RIBA), and the Consumers
Association.
NHBC'S MODEL
FOR RAISING
STANDARDS
— 1.6 million homeowners are currently
protected by NHBC Buildmark cover
— NHBC registers almost 85% of new
homes built in the UK
— NHBC has 18,000 registered builders
who agree to comply with NHBC rules and standards
— NHBC is now the single largest single
provider of Building Control and inspects half of the new homes
built in England and Wales for compliance with Building Regulations
— NHBC provides a range of complementary
services to the industry and is currently the largest provider
of construction management Training, Health and Safety, and Home
Energy Rating services in the UK
AN INTERNATIONAL
AUTHORITY
NHBC's experience, knowledge and unrivalled
understanding of the UK house-building industry, means it is a
respected voice and can exert a positive influence to raise standards
and protect consumers.
NHBC has participated with and contributes to
a range of government, professional and technical bodies. These
include the Housing Forum, Building Regulations Advisory Committee
(BRAC), Building Control Performance Standards Advisory Committee
(BCPSAC), Urban Task Force, British Urban Regeneration Agency
(BURA), Construction Research and Innovation Strategy Panel (CRISP),
Contaminated Land Action in the Real Environment (CLAIRE), National
Society for Clean Air (NSCA) and the Construction Industry Research
and Information Association (CIRIA).
We are also an international model of best practice
as a world class warranty provider for the new house-building
industry. Countries from around the world, including Australia
Japan, Israel, China, Poland, South Africa and Turkey have consulted
NHBC for advice and information.
NHBC was instrumental in establishing the new
warranty organisation in South Africa (NHBRC) without which the
South African Government would have been unable to deliver its
commitments on mass housing.
NHBC has an influential voice in Europe and
European standards work. We contribute to the European Committee
for Standardisation (CEN), European Union of developers and house
builders (UEPC) and the European Organisation for Technical Approvals
(EOTA).
We also provide the secretariat for the Association
of European Home Warranty Organisations (AEHWO) and actively promote
the benefits of home warranty within Europe.
NHBC'S RESPONSE
TO THE
HOUSING BILL
NHBC welcomes the primary purpose of the legislation;
to increase consumer protection and improve the home-buying process.
Whilst we will be making a detailed submission
to the Office of the Deputy Prime-Minister on aspects of the proposed
legislation and the two consultation papers; "The Contents
of the Home Information Pack" and the "The Home Information
Pack in Low demand areas", this submission focuses on key
elements of the proposals.
We would welcome the opportunity to discuss
before the Committee our response on other aspects of the legislation
and on related documents that are not covered in this response.
1. HOME INFORMATION
PACKS (HIP)
a) NHBC agrees that the concept of a Home
Information Pack (HIP) offering a "log-book" model for
each home, is a step forward. It creates the potential for improving
knowledge about the condition of homes and the information available
to both vendors and purchasers.
NHBC also agrees that the HIP should—"should
include copies of any current National House Building Council
or Zurich Municipal warranty or equivalent or similar warranty,
contract or insurance policy relating to the fabric of the property,
the benefit of which will transfer to the new owner".
In NHBC's opinion this will increase consumer
awareness of the role Warranty Schemes play and encourage more
accurate and comprehensive dissemination of warranty documentation.
b) NHBC agrees that Home Information Packs
should contain a Home Condition Report, which should be "an
objective report on the condition of the property and its energy
efficiency".
Furthermore, NHBC believes that to administer
such a proposal it would be desirable to establish a new body
of home inspectors, qualifying under a certification scheme approved
by the Secretary of State.
We approve of the suggestion that this Home
Condition Survey should be a—"mid-range survey"—similar
to the RICS Homebuyers Survey and that it should not include a
valuation.
c) NHBC is content with the proposal in
the document that where a home is marketed "off-plan"—"the
warranty or insurance policy described in chapter 8 should not
be required. The pack should instead include evidence that the
home is registered with the provider of such a warranty or insurance
cover, and include details of the cover a HCR is not required".
d) NHBC is content with the proposals regarding
sales of new homes prior to marketing—"where a transfer
of ownership of a physically completed new home registered under
a designated housing warranty scheme is to either a company in
the same group of companies as the developer or to another company
that is a member of a designated housing warranty scheme, then
onward marketing of the home should be exempt from the requirement
to include a HCR in the HIP".
2. DESIGNATED
WARRANTY SCHEMES
NHBC welcomes the positive remarks in the consultation
document regarding Warranty Schemes. We agree that a Designated
Warranty Scheme (DWS)—"Would offer home buyers redress
if defects or damage arose attributable to the original construction".
We also agree that "effective housing warranty
scheme will involve inspections at the construction stage with
view to preventing or correcting defects before completion"
and that an "effective warranty scheme will also provide
a good measure of redress for the homeowner if defects come to
light after completion".
NHBC also agrees that "a significant advantage
for the homeowner is that for matters covered by an effective
warranty scheme he or she does not have to take legal action to
show negligence on the part of someone involved in the design,
construction or inspection processes".
NHBC also agrees that one important aspect of
the Bill is the role it ascribes to Designated Warranty Schemes.
We welcome the fact that introduction of this legislation would
require the Secretary of State to scrutinise the—"operational
effectiveness of scheme and the extent of the cover provided".
NHBC agrees that the Secretary of State will
need to have confidence in the effectiveness of any DWS in protecting
consumers and we note that the ODPM intends to consult separately
on the criteria for so-designating Warranty Schemes. NHBC welcomes
this consultation and would be happy to give evidence to the Committee
on the proposed designation criteria for Warranty Schemes.
3. THE NEW
HOMES EXEMPTION
Whilst NHBC welcomes the fact that for first
sales of new homes being marketed with the benefit of a "designated
housing warranty"—"there should be no requirement
to include in the Home Information Pack a Home Condition Report",
we do have concerns regarding the operational implications of
these proposals and in particular the interface between Warranty
Schemes and Home Condition Report Inspectors following the first
sales of new homes.
NHBC would welcome the opportunity to set out
before the Committee our views on how Designated Warranty Schemes
can protect consumers of new homes both at first sale and beyond.
4. CONCLUSION
NHBC welcomes the proposed legislation and the
proposals set out in the consultation document on Home Information
Packs. We are however aware that the proposals raise important
implementation issues and we would welcome the opportunity to
discuss these further with the Select committee.
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