Protection for New Home Buyers — House of Commons, 2020-01-16
Topic: Housing
Katherine Anne Green (Labour, Centre-left): I will not, if my hon. Friend will forgive me, because I think we are going to be tight on time for the Minister to respond, and I am covering—we are all covering—a lot of territory Is it right, Madam Deputy Speaker, that the law should offer more protection when you buy a toaster than when you buy a house? Why is not the standard similar in relation to the purchase of residential property I would like to mention two issues that are outside the direct remit of the Minister’s Department but that none the less impact on the overall picture of protection for homeowners. The Legal Aid, Sentencing and Punishment of Offenders Act 2012 means that, even if a householder does successfully pursue a defects claim in court, they may struggle to recover costs from their unsuccessful opponent. Although conditional fee arrangements are still possible, success fees and after-the-event insurance costs cannot be recovered from the losing party. This is a big issue for defects actions, since these costs can leave successful litigants so out of pocket that they still cannot afford to carry out the work to remedy the defects that were the subject of the case in the first place. Will the Minister press his counterparts in the Ministry of Justice to exclude defects actions for residential property from the prohibition on recovery of success fees and after-the-event insurance costs so that a successful owner can use the damages awarded to carry out repairs The operation of company law also seems to assist rather than hinder unscrupulous developers, who can set up a new company for each development, then place the company in liquidation, leaving defects unaddressed and sometimes avoiding tax and money-laundering rules in the process too. One constituent has found neither Companies House nor the Insolvency Service very willing to act to prevent this from happening, even when the same developer has blatantly and repeatedly breached registration and company law requirements. How will the Ministry work with Her Majesty’s Revenue and Customs and the Department for Business, Energy and Industrial Strategy to ensure that company law operates robustly against such practices by developers While I am aware of attempts by the industry to address homebuyers’ concerns through the five-star system, of proposals for a new homes ombudsman, of the Royal Institution of Chartered Surveyors’ intention to draft new guidance for its members and regulated firms on the inspection of new residential building works and snagging, and of UK Finance’s role in relation to mortgage lenders and improving building standards, these protections will still be insufficient The more I have looked into this matter, the more shocked I have been by the extent of the problem, the utter unscrupulousness of some developers and the absence of meaningful protection for homebuyers, many of whom are making the most significant purchase of their lives. I am sure the Minister will recognise from this brief description of the problems experienced by my constituents and those of my hon. Friends that the case for holistic, far-reaching, regulatory and legislative reform is both urgent and compelling and that any measures introduced must have real teeth. The Government’s stated intention to act to strengthen buildings standards and safety is a real opportunity, and I look forward to the Minister’s response.