黑洞社区

When Stephen Lupton bought a 拢250,000 home at Little Stanion Farm, the developer Bovis claimed in its marketing 鈥渁n enviable reputation for the quality of its build鈥�, promising he would feel 鈥渢he Bovis Homes difference鈥�. But when he completed the purchase in December 2014, it turned out to be not the kind of difference he was looking for.

Needing boots to make his way through the mud-soaked site, he entered his home to find the wrong kitchen installed and bannisters not affixed properly. While Bovis initially worked hard and resolved these problems, those turned out to be simply the most obvious difficulties. After living in the house, Lupton, a QS himself, realised there were missing padstones in the kitchen and hall lintels when cracks started appearing in the walls; incorrectly installed air bricks, which stopped ventilation under the floor from working; and areas of missing insulation leading to cold spots.

Dealing with these problems, which have yet to be resolved, among many other more minor ones has, he says, turned into virtually another job. 鈥淚t鈥檚 shockingly bad. It takes 10 hours a week of my time just to deal with. And you feel you don鈥檛 live in your own house, because you鈥檙e constantly waiting for works to happen, so you can鈥檛 paint it,鈥� he says.

Lupton, who has contracted shingles in recent months, puts part of the blame for his poor health on the increased stress he has suffered. 鈥淚t affects your relationship, everything. We鈥檙e now locked in to living here 鈥� we couldn鈥檛 sell without these things sorted out without losing a huge amount. If I wasn鈥檛 in the industry and able to understand it, I think I鈥檇 have had a nervous breakdown.鈥�

Unfortunately, Lupton鈥檚 experience of buying a Bovis Home has become an increasingly familiar tale in recent months, a situation which ultimately cost former chief executive David Ritchie his job, as the builder tried and failed to rush through completion of 180 homes before the 2016 Christmas year end. But while tales of woe at the company have since abounded in the national press, there are many that maintain that this problem of housing construction quality runs deeper than one troubled major builder.

Last year an all-party parliamentary group led by Tory MP Oliver Colvile branded quality across the industry as 鈥渦nacceptable鈥� and called for action from industry and government. But last month the latest survey of home purchasers, produced by the Home Builders Federation (HBF), found construction quality continuing to head downhill 鈥� for the third year in a row. It found 98% of buyers now report snags and defects with their home, with a quarter of buyers reporting more than 16 problems to their builder.

However, some are now saying that the experience of Bovis 鈥� one of the UK鈥檚 biggest housebuilders 鈥� and the rise of social media may have delivered a wake-up call to an industry that has neglected its core business. So, how big is the problem, and will the industry raise its game?

A wider problem

Three years ago, David Frise, chief executive of industry trade body the Finishes and Interiors Sector, wrote a series of columns for 黑洞社区 in a personal capacity about his experience of buying a new home from a major UK housebuilder. Today he is still battling the builder 鈥� which is not Bovis Homes 鈥� to get issues at the scheme rectified. He says these problems include a potentially dangerously mis-installed boiler and ill-fitting doors. He says his experience, like Lupton鈥檚 with Bovis, is of dealing with a business that is completely deaf to all his pleas to resolve problems. 鈥淭hey have ignored everything I鈥檝e raised,鈥� he says. 鈥淏ecause I鈥檓 in the construction industry I know I鈥檓 right about these issues, but I don鈥檛 recognise the complete lack of regard for customers from the industry I know.鈥�

What鈥檚 been allowed to happen is that lots of defects and incomplete works now get dressed up as a snagging list

Mark Farmer, Cast

The top line from the HBF home purchasers survey, which is actually conducted by the industry鈥檚 warranty provider, the NHBC, is that 84% of consumers are, overall, happy with their purchase, which the HBF says puts housebuilding in line with other comparable industries. Following publication of the all-party parliamentary group report last year, the HBF set up a quality task force under Crest Nicholson chief executive Stephen Stone to drive industry improvement. And Bovis itself, which received a two-star rating (out of five) in the HBF survey following its performance last year, says it has now set aside 拢7m for its own customer task force to deal with outstanding customer complaints, and initiated an 鈥渙verhaul鈥� of its customer service function. Steve Turner, communications director at the HBF, denied quality in the industry was at an unacceptable level. 鈥淭he overwhelming majority of new home buyers are happy with their new home. The percentage of cases where there are serious issues with new-build homes is very small.鈥�

However, the detail of the HBF survey reveals a less rosy picture getting steadily worse. It shows 38% of people encountering more problems than they expected, and 41% experiencing more than 10 defects or snags, up from 28% in 2014. Even the top line figure of 84% satisfied, which is down from 90% three years ago, implies 15,500 unsatisfied customers each year, in an industry where the consequences of major problems on people鈥檚 lives, according to the all-party parliamentary group鈥檚 Colvile, 鈥渃an be devastating鈥�.

Quantity vs quality

Neil Jefferson, managing director of the NHBC, says the worsening figures are down to rising output. 鈥淰olumes have doubled. The industry resourcing itself to do that has been a major part of this and it鈥檚 where the stretch has been created.鈥� Mark Farmer, founder of consultant Cast and author of the government-commissioned report on the future of construction, Modernise or Die, agrees there is an industry-wide correlation between increasing housing output and falling quality. 鈥淚t鈥檚 a much-wider issue than Bovis,鈥� he says. 鈥淭he industry has got used to delivering at a quality that doesn鈥檛 bear comparison to sectors like automotive or hospitality.鈥�

Farmer puts this down in part to the quality of staff being diluted as output has risen, but also a failure of the system of site supervision of construction, and a gradual erosion of what is meant in the industry by the term practical completion. 鈥淭here鈥檚 been a corruption over time. What鈥檚 been allowed to happen is that lots of defects and incomplete works now get dressed up as a snagging list,鈥� he says.

Until Bovis received a two-star rating this year, the company ratings in the HBF customer survey have generally shown little differentiation between those firms that have a reputation within the industy for focusing on build quality and others that don鈥檛, giving little incentive for housebuilders to invest in this area. At the same time both the government and shareholders have put builders under pressure to expand quickly and bring in more money. David Birkbeck, chief executive of Design for Homes, says: 鈥淯nfortunately, the City undermines quality. Analysts promote companies that squeeze build costs and pay suppliers slowly. They challenge those trying to develop a brand based on better quality of build and design, like Barratt, which has to defend its model of trying to sell a home with fewer defects and better street scenes for a premium.鈥�

Hence, he claims 鈥渋ndustry insiders would never allow their friends and family to buy from most builders top rated by the City鈥�.

Complaints

But it is not just the volume of defects and problems, but builders鈥� response when problems are unearthed, and the means of redress for the consumer which is now under scrutiny. Evidence submitted to the all-party parliamentary group by one consumer who claimed to have been fighting a legal battle over defects in his new home for 17 years, described his threefold realisation once his complaint had been tabled. Stephen Watkins said: 鈥淭he first [realisation] is that the builder intends to deny the defect and negotiate about it instead of putting it right,鈥� he said. 鈥淭he second is that the builder is practised and skilled in such negotiation. The third is that a whole host of technicalities surround that negotiation and that the builder and his experts fully understand those technicalities whilst consumers do not.鈥�

It鈥檚 shockingly bad. It takes 10 hours a week of my time just to deal with

Stephen Lupton, Bovis home owner

The HBF鈥檚 Turner completely denies this characterisation, saying: 鈥淚n all the cases we see, housebuilders or the warranty provider are looking to work with the homeowner to resolve issues, as is their responsibility.鈥� Nevertheless, Paula Higgins, chief executive of pressure group the HomeOwners Alliance, says: 鈥淲hat is shocking is the real lack of consumer protection and real lack of checks and balances in the system.鈥�

This consumer fear about the odds being stacked in favour of the builder, has driven growing concern over the effectiveness of the main 10-year warranty provision for new homes, undertaken by the NHBC. The NHBC, which was born out of the major housebuilders but now claims to be independent from them, steps in if housebuyers and housebuilders can鈥檛 resolve issues raised in the first two years after purchase, and thereafter acts as insurer for major structural problems. Many see the NHBC鈥檚 relationship with the housebuilders as a conflict of interest, and both Frise and Lupton claim it has done little to help in their cases 鈥� to which the NHBC responded by saying the organisation was sorry when new home owners experienced problems. A spokesperson said: 鈥淚n both of these cases we are working to help resolve the issues as swiftly as possible and make sure that any necessary remedial works are carried out.鈥�

The all-party parliamentary group report called for a full review of both consumer rights when buying new homes and of existing warranties, which it said 鈥渄id not match the expectations of the consumer鈥�. It also called for the setting up of an independent new housing ombudsman to put pressure on both housebuilders and warranty providers, replacing the dispute resolution service offered under the industry-devised Consumer Code for Home Builders.

However, while the NHBC鈥檚 Jefferson admits there may be a perception problem, he denies any real conflict of interest, pointing to the fact the NHBC finds in favour of the homebuyer in 70% of disputes taken to it. 鈥淲e鈥檙e independent of the government and industry. It鈥檚 in our interest that builders build better, and I regularly have difficult conversations with senior people at builders to get them to sort things out.鈥� The HBF鈥檚 Turner says an ombudsman is not needed, because its function is already covered by the consumer code, with the majority of disputes already resolved in favour of the homeowner. However, Jefferson says NHBC would be 鈥渋nterested to work with specific proposals鈥� for a new housing ombudsman, though he maintains the industry is already starting to improve of its own accord.

Bad publicity

If the sector is now focused on self-improvement, then the experience of Bovis is driving it, at least in part. Cenkos analyst Kevin Cammack says the volume of negative coverage of the firm is almost akin to the infamous World in Action investigation into vulnerabilities of Barratt鈥檚 timber frame systems to rot and fire 鈥� after which Barratt took 鈥渢hree years and a management change鈥� to recover. 鈥淭he brand of housebuilders is becoming more and more important, and Bovis is now the poster-child for these kind of problems,鈥� he says.

Bovis鈥� construction delays were serious enough to prompt a profit warning, but this financial hit was compounded by the tales in national newspapers of unhappy consumers, derived by journalists from a Facebook group, entitled Bovis Homes Victims Group, with more than 2,000 members. The group鈥檚 administrator Helen Bonner says that despite improvements since the departure of David Ritchie, members of the group are still planning to protest at the firm鈥檚 AGM in May.

Cast鈥檚 Farmer says this potential provided by social media to marshal discontent and propel it straight into the public domain is now forcing firms to take build quality seriously. 鈥淭hey鈥檝e seen in the last three months what can happen if they don鈥檛 get to the bottom of the quality issue 鈥� it could have been any one of them. This fear of reputational damage will drive improvement.

鈥淚t鈥檚 the bringing in of this culture of consumerism, the TripAdvisor effect, the immediate ability to rank providers that is going to come into this big housebuilder world,鈥� he says.

Unsurprisingly, the HomeOwners Alliance鈥檚 Higgins says she is working to set up exactly such a thing, where prospective homebuyers can see all developers rated by the average number of snags buyers experience. Cenkos鈥� Cammack says: 鈥淣o doubt the housebuilders are starting to put far more credence on their [HBF] star [quality] rating.鈥� The NHBC鈥檚 Jefferson agrees: 鈥淚n the past it鈥檚 been disappointing to see the lack of interest from some [City] analysts to these quality issues. But increasingly we鈥檙e getting questions from analysts on this topic.鈥�

Nevertheless, the evidence suggest that if things are to get better, there is in some cases still a long way to go.