The New Homes Quality Code – What you need to know

Key Takeaways

• The New Homes Quality Board's ("NHQB") latest code increases Developer compliance and obligations relating to new build houses.
• Developers should begin to prepare and improve their processes accordingly to match Code standards, even if they are not registered with NHQB.
• Developers should use the transition period to meet Code standards. 

Background

NHQB has released the most up to date New Homes Quality Code (the "Code") which relates to new build homes reserved from 2 March 2026 onwards. The Board intends to revise the Code in accordance with best practices within the industry. 

This article will focus on the practical implications and future consequences the Code may have for developers operating within the new build industry. 

The latest changes to the Code

Most notably, the Code has shifted towards stronger consumer protection, with all references to 'should' being replaced with 'must'. What were once recommendations provided by NHQB, have now become strict obligations that developers must comply with. This demonstrates NHQB's clear intention to enhance safeguards for consumers.

The Code provides greater clarity on what it does not cover, some notable exclusions include: 

• Commercial purchasers
• Claims falling under structural warranty
• Claims relating to tenure or the occupancy status of other properties, and;
• Claims involving the loss of value due to fluctuations in market conditions or factors which are not within the control of the developer.

While the Code applies only to those registered with NHQB, the position is unclear regarding joint ventures. Developers should at the very least understand and consider the cost benefit of implementing these changes as these standards could become industry-wide expectations in future. 

Sales information and marketing materials 

Developers must ensure all sales and marketing materials are clear and accurate to ensure their compliance with their obligations under Part 2 of the Digital Markets, Competition & Consumers Act 2024. This includes providing all information that would likely impact a consumer's decision to proceed with the purchase. Marketing materials should accurately reflect the new home including both verbal and visual representations made in relation to the selling process. All materials need to be introduced at the outset to prevent the need to introduce additional information later in the process and any additional information shall not arise later in the transaction.

Selling homes: Customer service standards

As a part of the sale process, developers should not project high-pressure selling techniques that could unduly influence a customer's decision. A new seven-day consideration period has been introduced to enable customers to consider the purchase where time-pressured financial incentives have been offered in return for immediate decisions. Developers must communicate clearly with purchasers to ensure they are aware of the ongoing sale risk during this period. 

In essence, any information provided to customers that is likely to provide false representations or mislead them will constitute a breach of the Code. Consequently, sales teams should re-assess their systems and processes to ensure customer service standards are met and that the Code is integrated across every aspect of selling a new home. 

This includes a consideration of vulnerable individuals, for whom developers must be flexible in their approach, offering additional support to help them make informed decisions. 

Professional adviser referrals

Where developers receive any fee, commission, reward or advantage for introducing a professional adviser to the customer, they must in writing disclose information relating to their referral or recommendation before the customer makes any commitment. This reinforces the requirement for full disclosure and transparency when dealing with purchasers of new build homes.

Inspections and completion

The Code provides customers with the right to undertake inspections of the property themselves or alternatively appoint a suitably qualified professional to do this on their behalf. While this is a new right, developers can remind purchasers that the inspection process was designed to be carried out by a professional suggesting this remains best practice.

At the point of completion, a Schedule of Incomplete Work is to be shared with the purchasers detailing incomplete works relating to the Development along with estimated timescales for when the work is expected to be finished. 

The future of the Code – how you can prepare

Although the Code currently applies only to those registered with NHQB, strengthened consumer protections could eventually become standard across the sector. Those who overlook the Code risk missing opportunities to align with industry expectations.

This also raises the question as to whether we may see a gap in the marketability of units where developers are not registered under the Code. Purchasers could be more inclined to buy their home with those accredited by NHQB due to the increased protections offered. 

Developers who have registered with the NHQB should use the six-month transition period to update training, revise branding and sales procedures, and embed the new compliance requirements across their operations.

For legal advice or if you have any queries please get in touch with your contact at Howard Kennedy or our Building Safety Group. This article is for general information only and does not constitute legal advice.