2018

ANNUAL REPORT

Introduction 3

Executive Summary 4

The Home Buying Process 5

Moving In 6

Settling In 6

Warranty 6

Profile Of Respondents 7

Contents

IntroductionThe New Homes Review (NHR) is now in its second year having been launched in November 2016. It is an independent annual report on the new home buying experience from the consumer’s perspective.

It publishes findings from the NHR survey which asks the owners of newly built properties for their feedback on the process and quality of their home as well as their overall buying experience.

This is collated into an annual report which can be used to help potential new home buyers with their buying decisions and provide an update on the performance of the home building industry.

Key features of the insight programme are:

• It is truly independent as it is not affiliated to developers or to an industry body• All new home owners of any development can participate• The questions on the survey were developed following consultation with developers and consumers, to ensure that they are meaningful and relevant• New build homeowners can choose how they complete the survey – online, by telephone or by post

The NHR itself is undertaken by an independent research agency, Zebra Square Ltd.

The NHR believes that good service in any industry should be rewarded and excellence in home building should be no different. To provide a reliable guide for potential home buyers and encourage the raising of building standards, NHR has developed an annual rating system based on new home owner customer satisfaction which will be rolled out as the survey gains further traction.

As excellent developers and builders come in all shapes and sizes, the NHR has developed a rating system which is fair for all and split into three tiers dependent on the size of the developer / builder.

The results of the NHR rating are shared with developers and builders registered with the participating warranty providers as a measure of customer satisfaction and to encourage a better home buying experience.

These ratings are based on the following questions asked within the survey:

• The condition of your home when you moved in• The standard of finish of your new home• The overall quality of the build• Value for money of your new home• Overall satisfaction• Overall satisfaction with the service provided throughout• Overall satisfaction with the service provided after you moved in

We hope you enjoy the results of this second survey. More information can be found on www.newhomesreview.com

When we decided to set up NHR, we were very aware that buying a home is one of the most stressful things that anyone can do. Now in its second year we hope that it will continue to help new home buyers with their buying decisions and minimise the stress involved, making it a much more enjoyable process.

The first NHR report covered 2017 and revealed that delays and snags after moving in were a bigger issue for consumers when buying a new build home rather than any delays during the build.

For 2018, the majority of new build purchasers were satisfied with their home, but there remains room for improvement. Most felt that the quality of the build and the finish was high. What is clear is that home buyers have very high expectations and that better communication on any delays or issues would help for everyone involved in the process. The home buyer would be better informed and feel more in control and it would be easier for the builder / developer to be open about the issues, many of which can be out of their control.

So are people satisfied?

The NHR independent rating for the new build industry for 2018 is Gold. This means that the average customer satisfaction score for the survey was between 61% and 70%. More details on the rating system can be found at www.newhomesreview.com

81 -100% Diamond

71 - 80% Platinum

61 - 70% Gold Overall industry rating: 66%

51 - 60% Silver

41 - 50% Bronze

Upto 40% Unrated

This rating shows that there have been some improvements since 2017, but there is still more to be done, particularly around snags and defects. The number of homes where there are snags or defects is still very high at 91% and while the majority are resolved in a timely manner, for the 25% where they aren’t, it will be a very frustrating time for the home buyer.

In 2018, just over two thirds of new home buyers were satisfied with their new build home overall, showing a slight increase from last year. Most felt: • Satisfied with the service they received during the sales process• The building completed on time and improved from 2017• The quality of the build was high• The standard of finish was good• Their home met their expectations when they moved in • Their new build home was value for money• That their home met expectations when they moved in• Clear, open communication around snags, defects and delays is very important, helps minimise disruption to the buyer and has a positive impact on overall satisfaction levels• Where snags and defects are experienced but resolved quickly they were generally as positive as those who had not experienced any• The majority of new home owners recognise the importance of their warranty insurance

Executive Summary

Areas for improvement:

• Almost everyone experienced snags or defects which ranged from issues around décor and finish to more serious problems relating to heating and plumbing

• 25% of those who experienced delays or defects said that they had not been resolved in a timely manner. More needs to be done to improve this

• Clear, open communication around snags, defects and delays is very important and helps minimise disruption to the home buyer

The Home Buying ProcessHouse building is such an important part of our society. With an increasing population and house building on course for its lowest levels since the second world war, the country needs more new homes to avert a housing crisis.

Builders and developers play a huge role in delivering people’s dreams, designing houses that people want to live in. Many of them are also trying to improve the service that they provide to home buyers. The NHR survey showed that 58% of people were satisfied with the service that was provided by their builder through the process and that 63% of the properties were completed on time. There is room for improvement, but there are reasons for the delays.

There are many different reasons why home buyers choose a new build property. As part of this study, NHR looked at the reasons why people chose a new build, the top eight reasons for 2018, ranked in order of importance were:

1. Location2. The design and look of the property3. The price of the property4. The size of the property5. Close to family and friends6. Number of bedrooms7. Being close to work8. The reputation of the builder

Location was the most important reason for the second year running, which is to be expected. But what was interesting when compared to the 2017 results, is that being close to family and friends, which was ranked third last time, has slipped down to fifth. This may show that people are moving away from their family, friends and work for the right location.

Another change from 2017 to 2018 is that the size of the property and the number of bedrooms is more important to home buyers.

Moving In There is nothing quite like collecting the keys to your new build home. Everything is fresh and new and the day is full of excitement and emotion.

The NHR survey asked new home owners if the property was as they had expected when they moved in and 57.7% said that it was, with 65% saying they were satisfied with the condition of the property.

When specifically asked how satisfied they were with their new home, 69% of homeowners said they were, with 65% satisfied with the overall condition of the property and the quality of the build. When asked about the standard of the finish in the new home, 59% said that they were satisfied it.

A home is normally one of the most expensive things that anyone ever buys. When asked if they were satisfied that the property was value for money, 69% of new build home owners agreed that is was.

Settling InOnce new home owners have collected their keys and moved into their new build home, 91% of those surveyed said that they had experienced snags or defects. This has improved very slightly from 2017. In the main, these snags and defects were resolved in a timely manner, with just 25% reporting dissatisfaction at the speed of resolution.

There were mixed reviews when new build home owners were asked about the service that was provided after they moved in. In fact, it was split down the middle with 49% unsatisfied, but with 33% reporting that they were completely satisfied. This means that builders and developers need to continue to work on the after sales service, which is often handled by the developer or builder’s head office rather than the on-site team.

WarrantyA structural warranty is an insurance policy designed to protect against defects in new buildings, normally for a period of 10 years after completion.

Given the survey responses that looked at the post sales service received, and the number of people that found themselves with some snags and defects, NHR went on to ask about the warranty or insurance that would cover major defects in the new build home.

When asked about the importance of the warranty or insurance when buying the new home, 87% of those surveyed said that it was important and just 13% didn’t think it was important.

They were then asked which statement best described them:

• 54% said “I know a little about what is covered by my new build warranty”• 35% said “I fully understand what is covered by my new build warranty• 1% said “I am not at all aware of what is covered by my new build warranty but someone else in my household is • 10% said “I am not at all aware of what is covered by my new build warranty”

Profile of Respondents

Age of respondents (years)

Number of people in the home

Between 1 November 2017 and 31 October 2018, 687 homeowners participated in the survey.

Those responding to the NHR survey

were asked if they had bought

a new build or newly converted

home before?

28% said it was their first

time purchasing a new build

3%

1%2%

13%

13%

15% 28%

17%

37% said yes they had purchased

a new build previously

35%said they had purchased a house before but not

a new build or converted property

16%

Under 35 35 - 44 45 - 54 55 - 64 65 - 74 75+

1 person 2 people 3 people 4 people 5 people 6+ people

22%

21%

51%

How the survey worksOwners of new build homes registered for warranties with the NHR’s warranty partners, Premier Guarantee or LABC Warranty, are actively invited to participate in the research three months after moving into their property. Information is sent out to these consumers via a postcard which explains the project and how to complete a survey. Each new home address has a unique code to complete the survey online via the NHR website. Homeowners can request a telephone survey or a paper copy.

Who is eligible to take part?Purchasers of new homes are eligible to take part.

Any purchasers of a new build home can participate. The survey is not open to those renting a new build property.

New build refers to any residential dwelling (house, apartment, bungalow etc.).

Report terminology• Housebuilder, developer and builder are used to refer to the party responsible for the build of the property.

• New build, property, dwelling and home are used to refer to the respondent’s place of residence.

• Respondent, purchaser, consumer and owner are used to refer to the individual who completed the survey.

For more information on the New Homes Review go online to www.newhomesreview.com or email info@newhomesreview.com

@newhomesreview | info@newhomesreview.co.uk | www.newhomesreview.com