Bovis Homes is to pay £7m to repair poorly built new homes sold to customers, raising fresh questions about the standards of new-build properties across the country and the regulation of the market.
The company – one of the biggest housebuilders builders in Britain – will pay compensation after angry customers formed a Facebook group accusing Bovis of pressuring them to move in to incomplete houses so it could hit sales targets.
The boss of Bovis apologised to customers on Monday for the poor quality of their houses and promised to finish them “to their satisfaction”. He refused to state how many homes needed the urgent repair work, or how much it will cost to fix each house. The company also refused to say which developments were worst affected, but it is understood that many of the problem homes are in Kent.
The announcement led to more than £100m being wiped off the stock market value of Bovis, with its shares falling 10% to 757p.
The news comes amid growing complaints about the quality of new homes and the organisation that sets the standards for new-build properties. Critics claim NHBC , which provides 10-year warranties for most new homes in Britain, is failing to protect consumers. Another recent controversy over new homes has seen Britain’s largest housing association, Clarion Housing Group, agree to buy back some properties on a housing development in the east London borough of Havering.
Oliver Colvile, the Conservative MP who chairs an all-party parliamentary group on new builds, called for an independent ombudsman to hold housebuilders to account.
“A lot of developments across the country are not very good, and I’m concerned about all of this,” he said. “There is a genuine need for more housing but we need to ensure they are going to be good quality housing rather than the sometimes frankly rubbish.
“Buying a house is the biggest financial investment families are going to make. It is their dream and suddenly they find out it is not fit for purpose.”
Paula Higgins, chief executive of the Homeowners Alliance campaign group, said buying a new homes is “riskier than buying a home that has been standing for 100 years”.
She added: “People are going in with their eyes shut because they think they are getting the same protection as other big purchases. There need to be alot more consumer protection.
“[The Bovis homes] were signed off for the needs of the shareholder, not for the needs of the homeowner.”
Earl Sibley, Bovis’s interim chief executive, announced the £7m “customer care provision” as homeowners prepare to protest at the company’s annual meeting in May.
Sibley, who stepped in after Dave Ritchie quit after a profits warning last month, said he would make fixing customers homes the “absolute operational priority”. He said the company had experienced a much higher number of “snagging issues” on new homes than it would normally expect and had conducted a “thorough and detailed review”.
He admitted that the company’s customer service “fell materially short” and had been “declining for some time”. Sibley promised to conduct an “end-to-end review” of the company’s whole production process, and has launched a “customer service task force” to urgently fix faulty homes.
Sibley declined to comment when asked if Ritchie’s exit from the company after 18 years concerned the shoddily built homes.
The affected customers have been left nursing problems such as faulty plumbing, no guttering, and half-finished tiling. Rob Elmes said he was offered £3,000 if he and his wife completed on 23 December, but declined the offer because of the defects with their £320,000 three-bedroom property in Inkberrow, Worcestershire. Helen Batt said her £389,995 Bovis home in Maidstone, Kent, had no turf in the back garden, the wrong kitchen units and had not been carpeted.
More than 1,400 have joined the Bovis Homes Victims Group on Facebook while others have posted a series of videos showing their poorly built homes on YouTube.
Marc Holden, spokesman for the campaign, said he had never expected the Facebook campaign to have any effect but now speaks regularly directly with Sibley and is helping advise the company on how to improve customer service.
“I was quite cynical that little old me and our Facebook group trying to fight a big company would have any effect, but they actually have changed,” he said on Monday. “Well, the proof will be in the pudding. But I do believe they are genuinely trying to change.”
Holden, who spent £490,000 on his home in Milton Keynes, said there were more than 100 faults identified in his house, many of which have still not been fixed almost a year after he moved in. “It was a nightmare, I don’t see how it could have got worse,” he said. “But I guess it has to get bad before someone gets a kick up the arse to do something.”
Sibley said he had personally visited several customers’ homes to survey the problems and apologise in person and was “working with them individually” to fix the issues unique to their homes. He was unable to provide a figure for the average cost to fix the homes, or identify the bill for the worst-built home.
“Our customer service proposition has failed to ensure that all of our customers receive the expected high standard of care,” Sibley said. “We are fully committed to putting our customers back at the centre of everything we do and to delivering a much improved level of customer service.”
Some customers will be paid back for urgent work that they have already paid for, and several will be paid compensation on top of the cost of the remedial repairs.
The cost of compensating customers knocked Bovis’s full-year profits, which fell 3% to £154.7m, below analysts expectations of £160m to170m. The company said its profits would fall again next year as it would reduce the number of units it builds by 10-15%.
Bovis built almost 4,000 homes last year, but said 180 properties that should have been completed in 2016 had yet to be handed over to buyers.