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Lies, damned lies and statistics...

Everyone's happy!

Customer satisfaction among new home buyers has been running at 85-90% or so for the last few years.

That's according to the HBF/NHBC annual Customer Satisfaction Survey.

"Customer satisfaction" is then 'interpreted' by the industry to mean 'construction quality'.

Here's how it works.

New build owners who have an NHBC policy get sent a 'customer satisfaction' questionnaire about 8 weeks after completion i.e. just after you've moved in and are still unpacking, whilst their promises that everything will be taken care of still seem credible, and before many serious issues may have come to light (and been ignored)...

The 85-90% figure is based on responses to the question "would you recommend your builder to a friend". Hardly a sophisticated means of benchmarking construction quality... Why not base the stats on questions that specifically ask about construction quality? Harder to spin, perhaps.

Many owners don't realise their response to the "recommend a friend" question are used by the industry to award itself "Star Ratings" which are in turn used to back up their assurances of quality and service to the next wave of prospective buyers... Would their responses be different if they knew they were perpetuating a lie (sorry, statistic)?

The results of this survey are published once a year by HBF (the housebuilding industry's political lobby group whose mandate includes preventing government from regulating the industry, so not obviously interested in revealing the hard truth of the situation, one might say). No one outside the industry has oversight of how they do this but historical published data shows (presumably inadvertently - they don't publish the same data anymore) that up to 25% of survey responses are excluded from the analysis. Perhaps those customers gave the 'wrong' answers?

The stat may be published once a year but the raw data is fed back to housebuilders week by week, development by development. Some developments are better built than others. Those where the feedback starts looking a bit negative and that might cost the builder a Star or two often come in for special treatment to 'get the figures back up'. Here is a sample of special treatments enjoyed by our members, based on consistent verified witness evidence:

  • Threats. If you don't 'recommend a friend' we won't fix your defects. And variations on a theme. Pretty crude, but effective.
  • Promises. If you 'recommend a friend' we will give install a patio and shed worth £3k (unfortunately the workmanship on the patio was dire and the shed never materialised). And many other such treats.

Variations on the above themes are reported consitently by buyers of new builds from all major housebuilders from all parts of the UK i.e. this is an industry-wide practice to manipulate the figures at source.

So there you have it. Pretty much everyone is happy. According to the industry.

If you are not one of the happy people and you need help getting defects put right, sign up now and apply for membership for expert guidance and support based on proven best practice.

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Few 'valid' warranty claims means few problems

NHBC submitted to the APPG on the Built Environment (that's the cross-party body appointed to help develop government policy on - among other things - regulatory reform of the housebuilding industry) that "out of all the homeowners covered by NHBC, less than 5% contact NHBC with issues that result in a valid claim under the warranty period." See para. 4.7 of their submissions here or download our copy of the same here.

What does that mean, exactly? Does it mean that less than 5% of policyholders have a valid claim? That's what you (and more to the point, the government) are meant to think it means, but it doesn't mean that. It doesn't really mean anything at all. It's just a lie (sorry, statistic).

Here's how it works.

The vast majority of warranty claims relate to defects reported by buyers to their housebuilder during the 'builder warranty period' (usually the first two years after completion), that the housebuilder has failed or refused to put right. See section 2 of Buildmark.

Those things the builder already failed or refused to deal with can be referred to NHBC's "Resolution Service". This is the process by which NHBC 'decides' what claims are 'valid' and which are rejected.

The NHBC is the piggy-in-the-middle of a three-way contractual arrangement: you have a policy with NHBC; NHBC has a contract with the housebuilder (called NHBC Rules). In most instances, if NHBC accepts your claim, it will be looking to pass on the cost to the housebuilder under its contract with them.

The housebuilder can challenge NHBC over sums claimed from it in this manner. Alas, for all practical purposes, you cannot challenge NHBC if it refuses to accept your claim. The reason for this is that the Resolution Service is NOT a regulated insurance activity. If NHBC rejects a legitimate claim, you cannot complain to the Financial Ombudsman Service (“FOS”) to overturn it. Or rather, the FOS has no jurisdiction to deal with such complaints, so you can complain all you like (and NHBC routinely tells policyholders of their right to do so) but it will do you no good: the FOS cannot overturn NHBC's rejection of your legitimate claim.

This inevitably creates an imbalance. If a builder intimates that it is not minded to deal with something (and bear in mind you will only be referring things to NHBC that it has already failed or refused to deal with, so that is really quite likely), NHBC can either pick a fight with the builder and face a costly legal battle, or it can tell you your reported issue is 'within tolerance' or otherwise not covered by reason of some vague misinterpretation of their policy terms or technical standards with impunity. It doesn't take a genius to work out which way NHBC is going to go in most instances. So much for NHBC's tagline "Raising Standards. Protecting Homeowners." It is doing the exact opposite: overseeing ever-declining ones and protecting housebuilders from the consequences.

The way this works in practice is key to it. Housebuilders and NHBC will routinely liaise directly with each other without notice or reference to the policyholder, and privately ‘decide’ between them which of your claims will be accepted and which ones will be rejected. Our members have, for example, (inadvertently) received copies of draft NHBC reports that the housebuilder has quite literally 'marked' by striking through great swathes of major defects that NHBC were thinking of accepting and simply writing "NO" next to them. NHBC obediently rejected those claims, with impunity. We are routinely informed by our members from across the country that they too have had obviously-legitimate issues rejected by NHBC. This is a systemic, industry-wide practice.

If NHBC rejects a legitimate claim, your option would normally then be to pursue legal action against the housebuilder to get anything. To add insult to injury, most housebuilders will rely on NHBC’s (wrongful) rejection of your warranty claim in their defence, putting you to additional trouble and expense when pursuing the legal action. Needless to say, there are many who by this stage feel disinclined to take legal action, and thus the industry wins in every such instance.

Another insidious means by which housebuilders deter aggrieved owners from pursuing legal action over legitimate issues that NHBC wrongly rejected is to include a clause in their standard plot sale contracts that purports to limit your rights to those conferred by Buildmark, in other words, to whatever NHBC and the housebuilder in private conference arbitrarily decide you can have. Needless to say, we are more than satisfied that such clauses are unlawful so do not be deterred if your housebuilder tries to convince you otherwise.

To summarise, whilst there is technically nothing strictly untrue in NHBC's statement "out of all the homeowners covered by NHBC, less than 5% contact NHBC with issues that result in a valid claim under the warranty period", it would in our view have been more honest and LESS LIKELY TO MISLEAD GOVERNMENT for NHBC to have said "out of all the homeowners covered by NHBC, less than 5% contact NHBC with issues that (after arbitrarily rejecting valid claims in private conference with housebuilders) result in a valid claim under the warranty".

If you have had legitimate issues rejected by the NHBC, that is NOT the end of the road even if the housebuilder's contract says it is. Sign up now and apply for membership for expert guidance and support based on proven best practice and ensure you get a fair, affordable, cost-effective outcome.

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