New Homes Quality Board Code update: Key changes and takeaways

Background

As previously reported, the New Homes Quality Board (NHQB) published a code of practice in December 2021 (the Code) to strengthen consumer protections, improve transparency and raise standards during the sales process for buyers of newly built homes. Registration with NHQB still remains voluntary, though those that have registered will be required to comply and should be mindful of the most recent changes to take effect.

What has changed?

The NHQB aim to revise and review the Code every three years. The first amendment to the Code has now been issued and will apply to homes reserved on or after 2 March 2026.

The revised Code states that it aims for “20 targeted improvements” to its predecessor. The NHQB summarise the changes briefly as follows:

• Clearer and more realistic affordability information
• Stronger protections against high-pressure sales practices
• Greater transparency around professional adviser referrals
• Greater flexibility around pre-completion inspections

Some of the keys changes include:

1. Sales and marketing

– The ‘not misleading’ obligation now explicitly refers to photography, CGI and video
– Descriptions of the new home must now set out the size of each room and the size of the whole home in either m2 or sqft. The dimensions must be calculated on a gross internal area basis and in accordance with the RICS Code of Measuring Practice
– Specification of property – must refer to non-standard items such as floorcoverings and turf
– Where a customer attends a time-bound sales event, they must be given seven days to consider the purchase even if that extends beyond the incentive window and the incentive (but not any specific home) will be held open
– Drip pricing is expressly prohibited for elements of a new home that customers may reasonably expect would be included
– Commission and incentives for developers – the obligation to inform a customer now requires the disclosure to be in writing.

2. Reservation agreements and affordability schedule

– Generally ‘should give’ language throughout the Schedule has been upgraded to ‘must give’. For example, version 1 said developers and customers ‘should not’ sign a reservation agreement until all relevant facts were available. Version 2 changes this to ‘must not’
– Reservation agreements must now include details of how shared spaces, roads and amenities will be managed, for example by the local authority or a management company
– Affordability schedule and indicative cost estimates have been reduced from 10 years to 5 years.

3. Pre-completion inspection

– Customers may now carry out the inspection themselves using the NHQB checklist . Developers must inform them that the checklist was designed for professionals to carry out the inspection and that they may miss or interpret requirements differently
– Inspectors appointed by customers must now meet specific criteria: membership of a recognised professional body (RICS, CABE, CIOB, ICWCI or RPSA), professional indemnity insurance, and a requirement to work within their competency only
– Where inspection identifies issues breaching warranty technical standards, developers must address them before completion where possible, or within 30 days if not.

4. After-sales service

– ‘Should’ language on snag resolution has been upgraded to ‘must’ throughout, including the requirement to settle after-sales issues or problems within 30 days, unless there is a significant reason for a delay
– Where remedial work requires a customer to vacate their home temporarily, the developer must fund alternative accommodation
– The accommodation must take into account the customer’s specific needs and the likely duration of their stay.

Next steps to ensure compliance:

• Review existing documentation templates against the updated requirements: reservation agreements, affordability schedules, schedule of incomplete work
• Review sales procedures against updated requirements: commission and incentives disclosure, mandatory obligations that now apply, preventing misleading information
• Staff training
• Consider how your contracts and insurance arrangements address the new obligation to fund alternative accommodation where remedial works require a customer to vacate.

If you would like to discuss any of the changes and how they apply to you please do not hesitate to contact a member of Thomson Snell & Passmore’s expert Land and Development team at info@ts-p.co.uk.