Non Disclosure Agreements forced on homeowners

An MP has claimed that housebuilders that carry out repairs on new-build homes are asking residents to sign non-disclosure agreements.

MP for Sheffield South East and chairman of Parliament's housing committee, Clive Betts, told BBC Radio 4's Money Box programme that the practice was appalling and would not be acceptable in other industries.

Mr Betts said housebuilders needed to be more open about what work had been required as systemic defects might affect other properties, too. "If this kind of thing happens in the car industry for example, car companies have to tell their customers, issue a recall, and get the problem fixed. I don't see why it should be any different when it comes to buying houses," he said.

Chief executive of property advice group HomeOwners Alliance, Paula Higgins said the practice was prevalent and should be banned. "It is a form of blackmail to ensure that housebuilders keep their reputations intact" and said buyers of new-build properties needed to do everything they could to know exactly what they were buying and go into the purchase with their eyes open. New homes can be riskier than old homes because you do not know what you are buying. It is natural that expectations for quality are high with new builds but there can be huge issues that you are stuck with if you complete a purchase," she said.

However, the trade association for the home building industry in England and Wales, the Home Builders Federation, said the practice was "not widely used" by housebuilders. "Settlement agreements are legal contracts that are used by businesses across all sectors. They are not widely used by housebuilders and when they are it tends to be with regards to details of compensation payments, sometimes at the request of the customer," a spokesman said.

While some defects can be minor, others can be very serious, such as problems with plumbing and sewerage systems, brickwork, or foundations. According to government figures, there were 244,000 new homes built in 2019 to 2020, the highest number of homes built in a year since 1987.

Collings Solicitors

Altrincham