The cost of construction-related loss to consumers was the equivalent of €80.7 million last year, according to a report published today.
The National Consumer Agency (NCA) report on home construction industry examined the costs to consumers in all aspects of home ownership and the protections available to them when buying or upgrading a home.
The report, by Grant Thornton, made a measurement of “consumer detriment,” or problems that resulted from poor services, workmanship, or materials provided for a job, in terms of financial and non-financial loss.
In a survey of 798 people, the total of €80.7 million in consumer detriment was split between €44.8 million consumer loss in the new housing category and €35.9 million in repair, maintenance, and improvement.
The two main problems reported were poor workmanship and failure to keep to a schedule, and the average cost of incidents with loss in new houses was €1,911, while the average cost in major works incidents incurring loss was €1,344.
However, consumer detriment loss as a percentage of overall output in the construction industry was 0.36 per cent.
When asked whether this figure was significant, Tony O’Brien, head of business consulting at Grant Thornton, pointed out there may be losses that consumers are unaware of, such as those relating to wall insulation and foundations.
He said the Irish level of detriment relating to the repair, maintenance, and improvement of homes was 2.5 the times that of the United Kingdom.
The NCA study made 25 recommendations in all. Among those, it wants a statutory backed system of certificates of compliance that contractors and subcontractors would be required to sign up to; a simple, standardised contract for small domestic building works; better dispute-resolution procedures; and easily accessible online information on the home-construction industry for consumers.
The report called for the elimination of certain terms and conditions, such as in a building agreement under which the developer has no obligation to complete a development or adhere to the original plans for that development.
The NCA is also seeking a forum that would involve all stakeholders to implement the report’s recommendations.
Commenting on the findings, Ann Fitzgerald, NCA chief executive, said: “Our research shows that home improvements is a greater area of consumer detriment than in new dwellings.
"This leads us to conclude that particular aspects, such as consumer awareness and education, as well as the need to put such works on a proper contractual basis are essential. It also suggests that industry itself has a role in promoting better standards of customer service, given that such problems are readily addressable.”
In a statement, the Construction Industry Federation said welcomed the report, saying it found “a high level of consumer satisfaction particularly when measured against similar studies in the UK.
“The report finds however that there are areas where further improvements are necessary. On a number of these issues the NCA is clearly moving towards the CIF's position and we welcome this."
The federation called on consumers to use reputable builders and to check all references. The industry body also said it was preparing a register of competent contractors for householders seeking greater energy efficiency in their homes.
Six reports reviewing existing practices in the industry have been published by the NCA and can be found on its website (www.nca.ie).
