Major Government reforms ahead in response to CMA report

Time to protect homebuyers and improve housebuilding standards across the UK

The UK Government has committed to introducing a mandatory New Homes Ombudsman and a single consumer code for house builders, following the Competition and Markets Authority’s (CMA)

Key insights:

  • New Homes Ombudsman will become mandatory, enabling homebuyers to challenge developers on poor-quality homes.
  • Single consumer code for all housebuilders, improving industry standards and accountability.
  • Addressing ‘fleecehold estates’ to eliminate unfair private maintenance contracts through further consultation.
  • Increased transparency on property fees for both leasehold and freehold arrangements.
  • Planning system reforms to streamline processes and support more housing development, particularly for SMEs.

The CMA’s February 2024 report uncovered major failings in the housebuilding market across England, Scotland, and Wales, concluding that the sector has consistently fallen short in delivering for consumers. The study resulted in 11 key recommendations, including stronger consumer protections and tighter regulation of private estate management arrangements.

In response, the Ministry of Housing, Communities and Local Government endorsed the CMA’s findings. It has committed to introducing secondary legislation to make the New Homes Ombudsman compulsory, ensuring that homebuyers have a formal mechanism to address quality concerns. Additionally, the government will enforce a mandatory consumer code for all housebuilders, enhancing industry-wide standards.

The government also acknowledged the need for significant reforms in the planning system. This will aim to provide greater certainty to housebuilders, particularly small and medium-sized enterprises (SMEs), helping to meet housing demand while streamlining the process.

Rob Brighouse, Chair of the New Homes Quality Board, said: “We welcome the government’s commitment to having a single mandatory consumer code for all housebuilders and activating the New Homes Ombudsman Service for all buyers of new homes.

“This will mean that there is one single framework [the Code] for all developers to improve the standards of quality and customer service provided to all new homebuyers. We believe that this decision will help to create a level playing field for all new homebuyers; offering the same route for redress and protections offered through the New Homes Ombudsman.

“We will be engaging with government and all stakeholders over the coming weeks and months to help put this into effect.”