This situation is criticised today by the Scottish Consumer Council in a report
which outlines a series of changes designed to give greater protection to
Scots who buy new houses.
Newly built houses are not covered by the Sale of Goods Act 1979 which
applies to most purchases made by consumers.
The Act states that goods
must be of satisfactory quality and reasonably fit for purpose. This, together
with other current problems, means that new home buyers can face delays in
completion of their new house and difficulties in getting faults such as leaky
windows, rocky staircases and ill fitting doors fixed.
This is at a time when new house building is booming and complaints about
house construction have increased. The number of new houses built in
Scotland increased by 17% between October 2003 March 2004, compared
with the same period a year earlier. Meanwhile complaints across the UK
increased by 9.5% between 2002 and 2003.
The SCC report says the evidence available suggests that new build home
buyers are all too often experiencing:
late completion of houses
pressure to accept incomplete houses
an after-build service delivered late, or not at all
inadequate means of redress.
The report Regulation of the New House Building Market in Scotland says that
the contract or missives drawn up between building firms and buyers is often
too heavily weighted in favour of the builders.
It used to be common practice,
for instance, for missives to contain a clause stating that any problems with a
new house identified in the first 12 months would be put right at the builders
expense. This now appears to be the exception and, if any guarantee
periods are included in the missives at all, they are often short.
Similarly, missives do not generally include a specific entry date for the buyer.
Most simply define a date of entry as being a certain number of days after the
property has been granted a completion certificate. The report says that
delays of several months have been widely reported in Scotland, causing
problems for buyers, particularly if they have a fixed date for selling their own
The Law Society of Scotland and Homes for Scotland, the body that
represents the Scottish house building industry, have been working together
to produce a draft standard builders missive which is likely to be piloted in the
near future. It aims to redress the balance of power between the buyer and
seller and has been welcomed by the SCC.
Other positive developments which have taken place recently include :
the introduction of a scheme in Scotland known as the revised finalling
procedure by the Council of Mortgage Lenders. Under this scheme,
mortgage funds will not be released until the property has had a
satisfactory final inspection. This offers some form of consumer protection
for the buyer.
the establishment of a Construction Innovation and Excellence Forum for
the construction industry designed to raise standards across the sector.
However the SCC says that while there are potential improvements arising
from these initiatives, the law still does too little for buyers of new homes. It is
calling for a major change in extending the level of consumer protection
provided by the Sale of Goods Act to cover new built houses.
The report adds that this enhanced statutory protection needs to be
underpinned by effective self-regulation by the industry. It recommends that a
Code of Practice be drawn up to help govern the way the industry operates.
This should be led by Homes for Scotland in consultation with consumer and
other stakeholder interests.
Martyn Evans, director of the Scottish Consumer Council said: It is plainly
wrong that people who typically spend over 100,000 buying a new house
may have less protection than those spending just a few pounds on the High
Street or in a supermarket. The law needs to be changed to bring about
improvements and this will require joint working between the Scottish
Executive and the UK Government.
However there is an obligation on the building industry itself to prevent
problems arising in the first place. That is why we have called for a Code ofPractice to be developed to regulate the way the industry operates and drive
up standards. We hope these key recommendations will be implemented to
make buying a new house a much more problem-free experience in the