- Housing developers make record profits thanks to government incentives
- But Britain’s new housing developments are often full of unhappy residents
- Increasing number of owners malfunctions and heavy leasehold contracts
- Homes still built on flood-risk land and poor energy-efficiency standards
- Complainants are sometimes forced to sign a non-disclosure agreement
Over three million new homes have been built in the UK over the past two decades.
Yet while housing developers have made record profits with the help of government incentives, owners have been left with many problems to deal with.
Market researcher IBISWorld says the new-build business is now a £60 billion industry. And the minister wants to build 300,000 houses every year by the middle of 2020.
New build nightmare: According to experts BuildScan, the average property now comes with 157 defects, a 96% increase from 80 in 2005.
But Britain’s new housing developments are often full of unhappy residents. Owners complain of an increasing number of defects – and some are forced to sign non-disclosure agreements before repairs can be made.
Others were burdened with leasehold contracts and many faced heavy bills for the removal of fire-risk cladding. Although the government promised to ban the sale of new leasehold homes in England, they can still be sold legally today.
In addition, houses are being built on flood-risk land and poor standards of energy efficiency.
So how has Britain allowed substandard standards to spoil its new housing stock?
According to a recent survey by trade body Home Builders Federation (HBF), about 94 percent of new-build homeowners report at least one defect after their property is completed.
Poor plastering, pointing to poor brickwork and damaged windows are among the most commonly reported ‘snags’.
According to experts BuildScan, the average property now has 157 defects, up 96 percent from 80 in 2005.
Over the same period, the average new-built home price has increased by 44 percent to £340,936.
And in recent years, more properties have been built by the 12 biggest construction giants.
According to a parliamentary report, in 2015, large firms made up 59 percent of the market, up from 31 percent in 2008. Crores of small construction companies collapsed due to the financial crisis.
Big business: new-build business now a £44.4bn industry, says market researcher IBISWorld and ministers want to build 300,000 homes every year by 2025
But some experts claim that larger companies are more likely to abandon homes, as there is pressure on their builders to quickly finish the development and move forward.
Delays due to supply issues in the manufacturing chain and rising cost of materials have put more pressure on the industry.
James Forrester, managing director of small developer Stripehomes, says: ‘Unfortunately, snagging issues are rife and large builders are often the culprits.
The result is that some homes are simply not fit for purpose and, in the most severe cases, pose a real threat to those unlucky enough to buy them.’
Nicolas Christofi, managing director of Serious Property Finance, says low-quality new-construction homes can begin to deteriorate after just 30 years.
And government schemes like Help to Buy have also helped firms fill their pockets by offering interest-free equity loans to buyers with small deposits – if they have bought a new-build property. Critics say that the builders used this scheme to inflate the prices.
Asked to sign NDA to get £7k payout
lousy: Jamie Fleury has reported 400 snags with his persimmon house
Jamie Fleury and Sarah Lynn reported 400 snags with their Persimmon house.
The couple bought 50 pcs of a £370,000 four-bedroom home in Leighton Buzzard, Bedfordshire, two years ago through a shared ownership scheme.
But within days he was diagnosed with problems including a front door that didn’t open properly and a leaky shower.
After battling with Persimmon and the Hightown Housing Association, which owns the other half of the property, 40-year-old Jamie, a payroll manager, eventually turned to his warranty provider, Premier Guarantee, which confirmed that 270 issues had been reported. .
If they signed a non-disclosure agreement, Persimmon initially offered the couple £2,000 so they could fix things themselves. This was later raised to a final offer of £7,000.
Jamie, pictured above, went back to the warranty company, which paid £12,000 in July.
A spokesperson for Persimmon says it has worked hard to resolve the couple’s complaints over the past two years.
Most buyers will expect their newly-built home to meet the latest energy-efficiency standards.
Last week, the prime minister confirmed that starting next year, developers will have to install electric-car charging points for new homes.
And all properties are now given Energy Performance Certificate (EPC) to let buyers know how energy efficient they are.
But government figures show that only 2 per cent of the EPC ratings given to new homes in England between July and September this year were the A standard, the highest score.
And while 83 percent scored a ‘B’, 2 percent got an E and some were awarded a G, the lowest rating. In Wales, only 5 percent of new-builds achieved an A.
The government is banning gas boilers in new homes from 2025 – but before that hundreds of thousands could be installed in new construction.
An energy-efficient heat pump costs about £2,500 when a house is being built, and more than three times as much to fit retrospectively.
And when the government begins offering a £5,000 grant towards the cost of installing a new heat pump in England and Wales, new-built homes will not be eligible.
Labor says that if heat pumps were installed in more than 850,000 homes…