Fixing the system
The spotlight on customer care for new home buyers and the house building industry has never shone brighter.
Introduction
The spotlight on customer care for new home buyers and the house building industry has never shone brighter. National and local politicians from all parties have expressed their commitment to solving the problems in the housing market and in customer care for new home buyers. The media have reported on many issues that consumers have had with new homes they have bought. Meanwhile Brexit is increasing the challenges that the industry faces by exacerbating the skills shortage and threatening the commitments made by all parties to increase the volume of new homes being built.
Demand for housing continues to exceed supply and as the industry strives for further growth in output the pressure on delivering high quality homes grows too. The environment in which the sector operates is broadly positive thanks to a growing population, continued support for the Help to Buy scheme, favourable economic policies with low interest rates and quantitative easing, continuing investment in UK property from overseas and direct funding for house building by the Government. As the supply side struggles to meet demand and to meet All Party ambitions for growth, the industry has called on Government to act now on what it sees as planning and stamp duty constraints to supply.
And now the pressure is mounting further as the UK Government has launched a consultation on the housebuilding industry called Strengthening consumer redress in housing. Customer care for new home buyers has never been more important.
Strengthening consumer redress in housing
The Ministry of Housing, Communities & Local Government launched its 8 week consultation on 18th February 2018. Housing Secretary, Sajid Javid, said
“For too long, tenants and homeowners have navigated multiple complaints procedures to resolve disputes about everyday household repairs and maintenance. Fixing this housing crisis is about more than just building homes, it’s ensuring people have the answers available when something goes wrong. Today’s top-to- bottom review shows government is working hard to deliver a better and simpler system.”
Unlike other areas, such as financial services that have a single and accountable ombudsman, housing has over four different complaints bodies. House builders are responsible for all customer care for new home buyers including fixing incomplete work in new build homes but when this does not happen many consumers with snagging issues can find that they have nowhere left to turn.
The Government sees the consultation as crucial to improving the complaints process across the market, driving forward a higher standard for customer care for new home buyers.
The consultation seeks views on redress for consumers of housing. It covers the following issues:
- the current complaints and redress landscape, how it is working and if more can be done to improve it;
- what standards and services should be expected of a redress scheme/an ombudsman;
- how to fill the existing gaps between current services;
- whether a single ombudsman service is needed to simplify access to redress across housing, and if so, what form that should take and what its remit should be.
This consultation was open to everyone including tenants, landlords, homeowners. The Ministry will provide more information on future proposals to the housing redress process following the conclusion of this consultation.
No-one involved in the house building industry should be under the illusion that things are not going to change.
Lloyds Bank Housing Report 2018
According to the Lloyds Bank Housing Report 2018 housebuilders are expecting to increase their turnover by 29% in five years. Firms are planning to invest in business infrastructure (50%), R&D (38%), new types of property (31%), staff development (30%), land (30%) and new UK geographical markets (29%). There is no mention of investment in customer service, snagging and defects management or after care solutions or systems.
The report also states that the workforce is forecast to shrink by 20% – 25% over the next 10 years, which will put significant pressure on these growth forecasts. Yet surprisingly 72% of housebuilders believe the sector has the resources to help meet the Government’s housing targets. These findings seem contradictory.
The Lloyds report was issued before the consultation was announced, so it would be interesting to see the results of this survey post consultation. The industry is planning significant growth, but with a shrinking workforce and no clear focus on investing in customer care for new home buyers or aftercare and snagging services, it is clear from this report that the industry as a whole is unprepared for the changes that the UK Government is expected to effect post consultation.
Why focus on Customer Care for new home buyers?
Consumer expectations have never been higher. Across most industries there have been significant developments in quality and reliability of products and services and yet the perception remains that UK house building has failed to deliver any such improvement. The industry must act now to earn and maintain a deserved reputation for excellence in customer care for new home buyers, to the benefit of consumers and shareholders alike.
A well-known piece of research originally undertaken by the Direct Selling Educational Foundation in 1982, and renewed by TARP Research in 1999, conservatively concluded that for every 1 formal complaint received 1,560 people would hear about that business in a negative light. That was before social media and the recent legislative changes to consumer rights. It is not difficult to imagine that since this research was done consumer reach has increased more than ten-fold through social media, so it is imperative that house builders manage after care effectively to avoid negative publicity across the internet. Focus on customer care, both pre and post completion, can deliver a material reduction in costs and waste, so it is perhaps surprising that this area has received little investment to date and little investment seems to be planned by house builders.
Impact of UK Government’s proposals
A new ombudsman with a formal complaints process and method of redress for consumers will create additional costs for house builders and will require new infrastructure and systems and expert teams to manager aftercare, complaints and snagging. Our experience with housebuilders so far suggests that many do not have the internal capabilities to deal with these new requirements. Customer care and defects repairs require specialist skill: on completion a house turns into a home and delivering an excellent service to homeowners can only be achieved where issues are professionally resolved at the first attempt, there is clear communication at every stage of the process and disruption to the enjoyment of the new home is kept to a minimum. A very different approach to that typically demonstrated in the management of the construction phase is required to get this right.
Working within someone’s home requires an understanding of the impact any repairs or snags have on the homeowner(s). The customer needs to feel cared for and understood and any repairs or snagging works need to be carried out with care and consideration for the home owner and their family.
Customer care systems need to record all the necessary details for the property from completion onwards, including handover documents, details and outcomes of aftercare visits, snagging reports and photographic evidence, full details of any works carried out and constant measurement of customer satisfaction. These are all very different skills and systems than those traditionally employed to build a new home.
A new home is made with, on average, 26,000 individual components assembled by a multitude of trades people with varying skills and qualifications usually in inclement weather. So unsurprisingly things go wrong sometimes. In future, the performance of a house builder will not just be measured by how many homes it builds and sells, but also by how it looks after its customers post-completion. If the UK Government carries through its proposal to “name and shame” poor practice, then there will be nowhere to hide and the most successful house builders in the future will be those who invest in customer care now!
A new ombudsman will require regulatory reporting by house builders, may involve audits and inspections and will almost certainly have a complaints adjudication process that will support the consumer whenever there is doubt about the behaviour of the house builder. It will also require funding from the house builders and will no doubt make charges for every complaint it has to deal with. For an unprepared house builder a new ombudsman could be very costly.
Help is at hand
House builders need to prepare now for the new regulatory environment that is coming. NHCC is ready to help.
Building on over 20 years of experience in the building repair and new home warranty sectors, NHCC partners with new house builders and registered providers of social housing to deliver efficient customer care services which raise customer satisfaction whilst reducing cost and improving profitability.
NHCC are experts in property case management in partnership with clients and provide great customer service. Our comprehensive range of customer care services include:
- A dedicated contact centre to manage and report on customer care issues, either with your branding or as an independent expert.
- Snagging services to include reporting and rectification.
- Courtesy visits to achieve consistent care at pre or post-handover visits.
- Full home surveys in the event of reported defects.
- Provision of bespoke software designed to meet the unique needs of house builder customer care, from image and video capture on site to a customer portal allowing visibility and interaction at every stage of a customer care case.
- Home repairs of any size or complexity.
- Detailed evidence reports identifying root causes of issues to enable effective contra charging/recovery from third parties.
- Insight through trend reporting on changes to design or procurement that deliver tangible cost benefits.
Our bespoke IT systems include mobile applications for consistent data capture on-site to case management software which links customer care teams, site teams and home buyers.
NHCC Scoper, our mobile surveying and scoping tool creates a schedule of works on site and captures photographs, videos and voice recordings to support customer care. Not only does it collect information on snagging and defects but it also records data on customer satisfaction and customer requirements to ensure that all issues are captured and communicated quickly. Scoper syncs automatically into our case management system, NHCC Reflex 360.
NHCC Reflex 360 has been developed by our in-house experts in building repairs and customer services. This bespoke IT system supports the management of property cases from sale completion right through to the end of the warranty period. It has a customer and client portal enabling clear communication on the progress of cases 24 hours a day.