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National House Building Council pays developers up to £15m a year

Construction standards and credibility questioned after it emerges National House Building Council pays developers up to £15m a year.

This week the Guardian published an article highlighting questionable practices of NHBC, focusing primarily on the following key issues:

  • Up to £15m paid out to developers each year to, “keep them sweet and an NHBC customer”
  • NHBC focus on the housebuilder - rather than the consumer
  • Campaigners say the lack of protection for the homebuyer is, “a scandal”

Paula Higgins, CEO of the Home Owners Alliance, says: “I think NHBC is acting on behalf of the developers and its members. I don’t think they are acting on behalf of consumers. She added that NHBC was “too much of a monopoly” in the warranties market and described its relationship with housebuilders as “cosy”.

At the same time, Oliver Colville MP, has also stated his “great concerns” over the independence of NHBC and the anti-competitive nature of their practices.

There is continued pressure for the Government to elect an independent ombudsman to oversee the independence of the structural defect insurance industry and to put homeowners first. There are also calls for the Competition and Markets Authority to investigate NHBC’s dominance of the market.

What concerns CRL about the report?

We’re concerned about the way NHBC secures its warranties as it raises many questions about the independence and credibility of the warranties.

We’re also concerned that the monopolisation of the market by NHBC is putting homeowners below the needs of developers.

The relationship between NHBC and the UK’s major housebuilders is too cosy. Greater competition in the structural defects insurance sector can only open the market to fresh-thinking and innovative providers who put the homeowner at the forefront of everything they do.

CRL always ensures that the warranties we source are of the highest standard and offer the greatest protection for new home buyers.


Specialists in Construction Insurance

Does this mean that we’ll have to change our methods?

No, we welcome the revelations that have come to light. We already pride ourselves on being easy to do business with and have transparent processes in place.

We will continue to improve our services and methods and will lead the way in ensuring a fairer market place and a better product for homeowners.

What does the report mean for new and existing customers?

For our existing customers, this should act as a booster, reassuring them that they have made the right decision in choosing CRL as their broker.

For new and prospective customers, this report should highlight the main point of difference between CRL and our competitors.

We want to reinforce that we are a service led company, focused on our customers’ needs and striving to make every step of the process better, from first inspection to exchange of certificate.

How does this affect homebuyers and developers?

The revelations published in the article mean that homebuyers are often forgotten, or pushed down the hierarchy with other suppliers, which can lead to a decrease in build quality.

Developers who have been a part of NHBC can now see that they are paying out to bigger developers to get their business - effectively bribing them to stay, which in turn leads to their monopolisation of the market.

If you have any more questions about our stance on the matter or if you're thinking about switching your structural defects insurance specialists, feel free to get in contact now.


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