Dissatisfied housebuyers are to benefit from a code of conduct and redress when making complaints about their newly built home.

The Office of Fair Trading (OFT) has found that while the sector is "broadly competitive", many buyers experience faults with their new property or delays moving in.

Some suffer "significant detriment, distress and inconvenience" over faults or problems, particularly concerning the plumbing and heating.

The sales process is also not perfect, particularly to do with reservation fees, and some terms and conditions in contracts are potentially unfair.

Organisations including the Home Builders Federation, National House Building Council and the Council of Mortgage Lenders have now agreed to a code of conduct and redress scheme, due to be up and running by March 2010.

The OFT has warned that if the industry fails to make adequate progress or deliver an effective solution, it will recommend more intervention through a statutory redress mechanism that would be funded through a levy on the industry.

Overall, the OFT found little evidence of competition problems with the delivery of new homes in the UK.

It said the barriers to entering the market were low, and prices were set through homebuilders competing for sales against each other, while the price of new homes was also "significantly constrained" by the price of existing ones.

It added that there was no evidence that individual housebuilders had the market power to restrict supply in order to inflate prices, or that they hoarded land.

Instead it said landbanking reflected the need for firms to have a pipeline of land at different stages in the development process. It added that apart from housebuilding firms, the public sector appeared to have the largest landbank.

OFT chief executive John Fingleton said: "We have found the home-building market to be generally competitive, with no evidence that individual homebuilders have the ability to restrict supply in order to inflate prices or to hoard land for anti-competitive reasons."

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