Property: Modern homes in quality street

With better designs, materials and warranties, new homes are no longer infra dig.
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This YEAR, 12 per cent more new homes will be built than last year. Figures from the National House Building Council (NHBC) show that between January and June, an average of almost 600 new homes were sold every day. Most were in the south of England, although the Midlands and the north, including Scotland, are also seeing a lot of activity, and young families are the main buyers.

Until fairly recently, new houses were considered infra dig both in terms of style and the standard of workmanship and materials. Although often cheaper to buy, price rises did not always match those of older properties. Buyers needed to be reassured of quality, which is why the NHBC now issues a warranty on all homes constructed by its registered builders.

As customers have become more discerning, new houses have shaken off some of their naff image. Estates are rarely rows of little boxes any longer. Houses are designed to look traditional - Georgian, Victorian or Tudor (or a mix) - and maintenance costs tend to be lower with modern insulation and heating methods.

Individuality was previously the preserve of commissioned houses but now major developers such as Wimpey and Barratt are building "exclusive" and "unique" smaller developments with prices, in some cases, up to pounds 500,000. Influenced by US style, a four-bedroom, four-bathroom house, designed slightly differently from the property next door, is not uncommon.

Builders have been encouraged by the shortage of good properties for sale in a rising market. They are having to work fast, however, to cash in on the current shortage which is already beginning to ease off.

The NHBC, the independent regulator of the housebuilding industry, is reviewing its activities after some bad press. Among measures to increase protection for buyers, it is looking to improve warranties, provide more pre- and after-sales service and increase its powers to discipline bad builders.

The NHBC has approximately 20,000 registered housebuilders who construct about 90 per cent of all new homes in the UK. Members are assessed for their financial and technical competence before they are accepted into the scheme. A 10-year warranty is issued on all homes built by NHBC members. This is not an all-out guarantee but provides some insurance against incompetent building and is generally a stipulation for securing a mortgage. "The provision of warranties on new homes has worked very well over the last 30 years, providing mortgage lenders and their customers with a good deal of protection," says Michael Coogan of the Council of Mortgage Lenders.

But there is the view that the warranty provides more protection for the builder than the consumer. A registered builder has the advantage of this official seal of approval and, bearing in mind the fact that 90 per cent of builders are members, it cannot be a guarantee of exceptional workmanship. But builders who do not adhere to NHBC rules - about 200 a year - are struck off, so check that certificates are bang up to date. The NHBC is considering publishing a blacklist of such firms in the future. There are also moves to prevent builders resigning from the scheme if disciplinary action is pending, and increased liaison with other warranty organisations to stop bad builders jumping from one organisation to another.

Another warranty scheme is offered by Zurich Municipal, and the two have plans to set up an association. This has the backing of the Council of Mortgage Lenders as long as the level of protection does not diminish. If the builder is not registered with either of these schemes, forget him.

Like many insurance companies the NHBC has been accused of finding loopholes to avoid payouts and taking an unacceptable length of time making legitimate payouts. Another alarming activity has been the mis-selling of warranties by sales negotiators and builders who have given false information about the length and extent of cover provided.

On the plus side, improvements have been made. Up until 1 April the warranty only covered "major damage" - to the main structure such as foundations, structural elements of the roof, floors and walls. Now new policy holders will receive additional cover for damage caused by defects in the "envelope" of the building - tiles, rendering, flooring - but not as yet windows or doors. Also covered are faulty flues and chimneys which can pose a health hazard.

For properties bought off-plan - before construction has finished - there is protection against builder bankruptcy. Considering the number of properties which are being sold off-plan this is a necessary protection. Regalian Properties report that 99 per cent of apartments in one of its Docklands developments have been bought off-plan.

The NHBC has also launched a customer charter which includes information on the complaints procedure. There is also a new telephone claims system which the NHBC says has reduced time from claim to repair by 66 per cent in many cases. It aims to get investigations carried out and repairs scheduled within 21 days of a home-owner's telephone call.

For NHBC-covered properties, the builder is responsible for correcting all defects during the first two years. If in these two years the builder cannot or will not carry out repairs the NHBC will meet these obligations and will then pursue the builder for costs and other disciplinary actions.

There is also a mediation service between the builder and the householder during the first two years, concerning defects. About 4,000 investigations per year are carried out in this way and in more than 60 per cent of cases the NHBC finds the builder in breach of regulations. But the NHBC hastens to say that the vast majority of cases are resolved with only about 50 per year going to independent arbitration.

There are also problems in some cases with the quality of the builder's repairs. After all, if the builder didn't build it correctly in the first place, why should he be assumed to be competent to repair it? But says Matthew Hart, of builders M & L Hart, the problems may not be about shoddy workmanship. "In the car industry, for example, the manufacturers have months to perfect the prototype, but each house is virtually a new prototype every time."

The NHBC claims much of the credit for improved housebuilding standards, such as a 95 per cent decrease in roof defects over the past 12 years. But materials have improved and credit is also due to the many builders who are thriving because of the high standard of their workmanship. Mr Hart says: "We do aim to get it right first time. It is very expensive for us to rectify any problems later."

A major problem in the industry is that there is no regulation for home improvements such as loft conversions, conservatories and roof replacements. This is a critical area where action is needed to stamp out the cowboy practices and improve skills, standards and customer protection. The Federation of Master Builders (FMB) has a national register of warranted builders, each of whom will supply a warranty on the finished work if the customer requests it. Too often customers choose not to - it costs 1 per cent of the price of the work - "considerably less than a warranty for a washing machine," points out a spokeswoman for the FMB.

But as well as expert workmanship, another issue being addressed, as in all areas of industry, is the need for adequate management training. As Rob Lockey, training services manager at NHBC, says: "As the housing market continues to recover, the need for site managers with experience and management skills becomes increasingly important. To build homes of the highest quality both on time and within budget requires business skills as well as construction and technical skills."

So are new homes good value? Standards in the structure and fabric are now very high. The issue is the quality of workmanship, and the NHBC says problems are being constantly addressed. As Elizabeth Male at NHBC says: "Ideally, the NHBC would eventually put itself out of business as standards of housebuilding excel to the point that no insurance is necessary!"

National House Building Council (NHBC): 01494 434477. Federation of Master Builders (FMB): 0171 242 7583