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Home Improvement Guarantee Scheme gets thumbs up

Christina Hoghton
Written By:
Christina Hoghton
Posted:
Updated:
21/03/2016

The Ombudsman has backed the launched of a new Home Improvement Guarantee scheme to stop building disputes

The head of redress at the Property Redress Scheme (PRS) has backed the Home Improvements Guarantee Scheme (HIG) – the initiative set up to prevent disputes between consumers and builders.

Sean Hooker has recommended the scheme to reduce the number of expensive incidents between builders and consumers around the country.

He said: “Agents are often asked for recommendations for builders by clients and I am happy to say that the HIG is a worthy solution, strengthening the bond between builder and clients and adding value to the service,” he said.

Agents and any other professionals who recommend the HIG will earn a commission for any work carried out through the scheme, but Hooker says he hopes increased use of the HIG will reduce the chances of any disputes because of the scheme’s structure and built-in complaints procedure.

The Home Improvements Guarantee (HIG) sources and vets builders from all over the country, then arranges quotes from three traders to maintain competitive forces during the tender process.

HIG has access to more than 1,000 builders and all must agree beforehand to sign up to the terms of the guarantee before bidding for any projects.

How the HIG scheme works

First, the work is split up into various stages, and a timescale or deadline is agreed on for completion of each stage, and the whole job. Then the money for the first stage of work is placed into a Financial Conduct Authority (FCA) regulated holding account, and is released to the builder only when the consumer is 100% happy with the work and agrees to release the funds.

Then the builder can continue with the next stage of the project.

By placing the money in an independent account the consumer knows that their money is safe, whether the builder does good or bad work, goes bust or just disappears. This gives peace of mind to both parties; the builder can see that the customer has the money and the consumer knows they don’t have to pay until they’re happy with the work that has been done.

Once all the stages have been completed, and the consumer is 100% happy with the work that has been done, the final payment is released. If any extras crop up along the way, the homeowner must sign and agree to the extras being carried out. The extras are only paid for when they too are completed.

The scheme is free to consumers because the builder pays a levy equivalent to 3% of the net value of the job (i.e. net of VAT) to HIG in return for being on the database of recommended builders.

Finally, the scheme also offers an insurance backed guarantee which provides additional security over and above the tradesman’s own guarantee. It is valid for up to 10 years and insures the homeowner against the tradesman going bust, disappearing, or problems with the quality of the work.


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