New Builds, Poor Standards!
18 Jul 2019 | Shilpa MathuradasTable of Contents
This week’s Dispatches programme examined allegations of shoddy standards, poor customer care and excessive profits from one of Britain’s biggest builders.
It is no secret that new build homes are quickly gaining a reputation for being poorly built, resulting in significant stress to buyers who buy these homes with the risk that many of them will not recover the sum they paid for them.
With the introduction of the Help to Buy scheme, the Government offers those with small deposits an opportunity to buy their own home. The equity loan scheme is available to first-time buyers who want to buy a “new build” house. The purchase price must be no more than £600,000, and under the scheme, you can borrow 20% of the purchase price interest-free for the first five years as long as you have at least a 5% deposit. Living in London allows you to borrow up to 40% of the purchase price. The scheme has been extended to 2023 for first-time buyers.
This scheme has resulted in new build homes becoming very popular amongst first-time buyers, namely, those with the least experience buying a property. As a result, large developers have been doing very well out of the scheme. Buyers have, however, complained about the quality of these new builds, the fact that they had been forced to complete when the property was not even ready and threatened with financial penalties and court action if they refused to complete.
In many cases, the buyers could not obtain their own surveys before purchasing the property, and the developers controlled the whole process. After completion, properties were found not to meet basic standards. In one case, the property did not have the required fire barriers.
With the government facing a 4 million housing shortfall and the extension of the help-to-buy scheme, it is inevitable that this will be an ongoing debate. However, with the introduction of the New Homes Ombudsman, it is recognised by the government that this is a significant problem.
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