The United Kingdom has just received a timely reminder of how developers need to improve their performance ahead of the eventual revival of the housing market.
Of course the short-term necessity is for the global banking crisis to be resolved, public confidence to return and business volumes to bounce back.
But even pessimistic market observers believe that will happen in, at most, a few years.
What might be a longer-term problem for developers is the astoundingly poor image they have in the eyes of the public, based on the quality of their product.
A report by the UK's Office of Fair Trading – a government watchdog supervising business practices – reveals the widespread number and range of problems suffered by people who purchase new homes.
A third of buyers suffer completion delays and many have to leave their old home, rent temporarily and wait for builders to finish their homes later than promised. Then some 70 per cent of buyers find faults – sometimes more than 50 faults in one unit. Some 10 per cent of buyers say their new homes are 'poor' or 'very poor'.
It doesn't end there. Other statistics are equally dispiriting for the residential construction industry:
- Numbers of buyers finding faults or problems with their home rises to 76 per cent in the case of those purchasing apartments rather than houses
- Some 63 per cent of those finding faults reported between one and 10 faults, but five per cent of them claimed there were 50 or more faults
- Most problems concerned allegedly poor decoration (29 per cent) or plasterwork (25 per cent, issues with glazing and windows (27 per cent), faulty central heating, hot water, or kitchen appliances and units (25 per cent), problems with internal doors (24 per cent) and faulty or missing electrical sockets (20 per cent)
- Half of those experiencing problems said they had been resolved in two weeks; another 22 per cent said they were rectified between two and four weeks later; but five per cent had to wait six months and two per cent claimed they had to wait a year for a satisfactory repair;
- Over a quarter of buyers who found faults or problems felt that homebuyers had 'little or no protection' when buying new homes, despite warranties that allegedly promise swift repairs soon after a purchaser moves in.
This isn't the first boot up the backside for builders. Back in 2004 the Barker report – at that time, the most comprehensive survey of the housing industry ever undertaken in the UK – criticised developers' build-quality and after-sales service.
Their response – surprisingly similar in almost every case – was to introduce their own in-house survey which with Soviet-style predictability would produce 90 per cent-plus approval ratings from purchasers. Today's OFT report shows what many people might believe to be a more realistic appraisal of the industry's performance.
If the latest figures were from car buyers or restaurant visitors there would be uproar. Luckily for the residential industry, the OFT statistics have been released over a summer pre-occupied with market gloom and were missed by many observers.
But that does not mean Britain's developers can breathe a sigh of relief. In a few years time, at most, the market will bounce back: but will public support for those building homes that appear to be failing their buyers? This problem exists across the world, of course, and not just in Britain.
Construction has booms and busts. During the former, build rates are fast and high and unskilled labour is frequently imported at short notice.
Because of the latter, especially in an era of privatised workforces, there are few long-term apprenticeships so skills levels amongst builders are variable.
The result is that building quality drops. The UK is also likely to be in the spotlight – perhaps unfairly compared with many other countries – because it is still relatively highly regulated with much potential for surveys, reports and public revelations about badly built homes. But the principle exists around the world that there is much dissatisfaction with the quality of new-build property. Perhaps it is inevitable, but the task therefore facing volume builders is to develop better construction methods, structure better checks prior to completion, and evolve better after-sales repair services.
With property investment on the back foot for the next few years, most buyers in the short term will be purchasing a home they intend to live in for quite some time to come. They will not settle for the indifferent quality seen, in the UK and overseas, in many properties aimed at the buy-to-let rental market.