New homes consumer codes and the ombudsman
What the Consumer Code for Home Builders and the New Homes Quality Code mean for developers selling new homes and for the people who buy them - and how a consumer code sits alongside your structural warranty.
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What they are
What a new homes consumer code does
A consumer code sets standards for how builders treat people buying new homes. The codes cover the information buyers are given, reservation agreements, contracts, how deposits are handled, handover, and after-sales service and complaints. The best known in the UK are the Consumer Code for Home Builders, the Consumer Code for New Homes and the New Homes Quality Code.
Most warranty providers require the builders they register to follow a consumer code. So if you sell new homes with a structural warranty, you will usually be expected to follow one. Which code applies, and whether you also need to register with the body behind it, depends on your provider and the homes you build - we can tell you what yours will expect.
The codes are reviewed and updated from time to time, and how they apply can differ between England, Scotland, Wales and Northern Ireland, so always check the current version.
In practice
What a consumer code means for developers and buyers
For developers
- Clear, accurate information for buyers before they reserve
- A written reservation agreement setting out the price, the reservation fee and what happens if the sale does not go ahead
- Fair contracts, and clear information on how deposits are protected
- A proper handover and an after-sales service for dealing with problems
- A complaints procedure that buyers can easily use
For buyers
- Enough information to make a decision before committing
- Clear terms if they reserve a home and later change their mind
- A route to complain to the builder if something goes wrong
- With some codes, an independent dispute scheme or ombudsman if the complaint is not resolved
Code and cover
A consumer code is not a warranty
The two work together, but they do different jobs. The structural warranty covers the cost of putting right defects in the structure for the policy period, usually 10 or 12 years, and is provided by the warranty provider or insurer. The consumer code is about how the builder deals with buyers - the sale, the handover and the service afterwards.
Following a code does not replace a warranty, and a warranty does not replace the code. Buyers' lenders look for the warranty. Buyers and their advisers may ask about the code as well.
Building your own home? The codes are aimed at builders selling new homes, so they do not usually apply to a self-builder in the same way. See self-build warranties.
Consumer code questions
Do I have to sign up to a new homes consumer code?
If you sell new homes with a structural warranty, your warranty provider will usually expect you to follow a consumer code as a condition of registration. Which code, and whether you register with its body directly, depends on the provider and the homes. We can tell you what yours will expect.
What happens if a buyer complains?
The buyer first uses your complaints procedure. If the complaint is not resolved, some codes give buyers access to an independent dispute scheme or an ombudsman, which can look at the complaint and decide what should happen. The New Homes Ombudsman Service, for example, deals with homes from developers registered with the New Homes Quality Board.
Is the consumer code the same as the warranty?
No. The warranty covers defects in the structure and is provided by the warranty provider or insurer. The consumer code sets standards for how you sell and hand over homes and deal with complaints.
Does a consumer code cover deposits?
The codes set standards for how deposits are handled and what buyers are told about them. Separate cover that protects buyers' deposits if a developer becomes insolvent is offered by some warranty providers as an optional extra.
Selling new homes? Start with the warranty
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