Ombudsman’s special investigations – a sign of things to come for private residential developers?

Last week, the Housing Ombudsman, which deals with complaints regarding social housing landlords, published the outcome of its special investigation into a large social housing landlord.

The investigation was the result of the Housing Ombudsman receiving over 100 complaints concerning the same landlord from tenants at different properties across the country. The underlying issues complained about included disrepair, poor repair services, and mishandling of service charges. The Housing Ombudsman awarded total compensation of nearly £150,000 to be paid, and required the landlord to issue individual apologies to a significant number of its tenants. 

This is also a timely reminder for residential developers that the New Homes Ombudsman Service (NHOS), which covers private housing, went live in October 2022. This is currently a voluntary scheme, to which over 160 developers have already signed up (including some of the UK’s biggest housebuilders).

The NHOS, which was introduced by the Building Safety Act 2022, provides a free complaints service for buyers of new homes during the period between reservation and the first 2 years after purchase. Its stated aim is to police compliance with the New Homes Quality Code (the Code), which covers not only the building process, but also the sale process. All developers who sign up to the NHOS are also signing up to comply with the Code.

In cases where the NHOS considers that a developer has not complied with the Code, it has the power to award a range of remedies, including ordering that remedial work must be carried out by the developer, and compensation of up to £75,000. It may be possible that the NHOS, like the Housing Ombudsman, could also carry out special investigations, where a significant number of complaints are received about one developer.

It had been expected that the Government would make membership of the NHOS mandatory when the Building Safety Act 2022 came into force last year. It has not yet done so, but it may do so in the future. In the meantime, the recent actions of the Housing Ombudsman are a clear warning to residential developers that an ombudsman service can be a very effective way to tackle poorly performing housing providers.