Is there a consumer code for new homes?

Angela Ellis

Yes, the Consumer Code first came into effect on 1 April 2010 and has been updated many times since then, with the most recent being the 2017 edition. The Consumer Code is a set of requirements that all home builders must adhere to. It applies to all aspects of the process from the marketing and selling as well as the customer service following the sale of a property. The code has been put in place to not only ensure that buyers are protected but that they are given all the correct information when purchasing a property so that they can make an informed decision. This code can always be referred back to should you have any queries and the steps to take if you feel dissatisfied with your arrangement. It’s also there to protect developers so that they are clear of their limitations and boundaries. All developers must have a 10 year building warranty to form part of the Consumer Code and, without one, a buyer cannot get a mortgage.

Here are some of the key points:

Pre-Contract

1. Pre-purchase information

The following information must be provided prior to purchase:

  • The agreement of reservation in writing.
  • Explanation of the home warranty.
  • List of any services or organisations that the buyer must commit to (including the costs).

If a home is not yet completed, the following must be provided:

  • A layout of the property (including plot position).
  • A list of contents inside of the home.
  • The standards of which the property is being built to. 

2. Contact information

  • Who to contact during all stages of the process including sale, purchase and after completion. 

3. Warranty

  • What you are insured for and what is covered under warranty in the property. 

4. Health and safety measures when visiting the property on the construction site.

5. Legal advice

  • Builders should advise the buyers to seek a legal adviser to carry out the formalities of the purchase. 

6. Reservation agreement

  •  An agreement of the reservation of the property should include the following:
  • The property being sold. 
  • The reservation fees.
  • Price of the property.
  • How long this price is valid.
  • Date at which the reservation agreement ends.
  • Cost of any management services that must be paid for by the purchaser.
  • Any transfer fees or similar liabilities including the method of assessment. 

If the reservation agreement is cancelled by either the seller or the purchaser - all reservation funds must be returned and the buyer minus any actual confirmed costs incurred by the developer, however the purchaser must be informed of any deductions that are being made (these must be confirmed with the solicitor).  If the purchaser is using the Governments Help To Buy Scheme, then the developer must refund their £500 reservation fee in full.


Upon exchange

1. The contract - This must be clear and concise, and comply with necessary legislation.

2. The timeline of construction, completion and hand over. 

3. A contract termination policy.

4. Deposit and pre-payment procedure and protection.


During occupancy

1. An after sales service

  • A breakdown of what this service includes and what is covered under warranty and guarantee. 
  • A point of contact should any problems be encountered. 

2. Health and safety requirements while visiting the development site.

  • This applies to the health and safety measures that need to be taken while living in a development that is still under construction.

Lastly, the home builder must have the necessary systems in place to deal with any complaints or disputes in the most effective manner. 

If you are considering buying a new build property through us and would like to find out more information, our New Homes team will be happy to answer any queries you may have. Call them on 01923 608373. 

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