Nigel Cates, Chief Ombudsman, The New Homes Ombudsman Service; Chloe Fletcher, Head of Policy and External Affairs, Chartered Institute of Housing; Richard Smith, Head of Standards, Innovation and Research, National House Building Council.

Steve Turner, Executive Director, Home Builders Federation; Stephen Teagle, CEO of Partnerships and Regeneration, Vistry Group; Jennie Daly, Chief Executive, Taylor Wimpey. Witnesses: Nigel Cates, Chloe Fletcher and Richard Smith.

Good morning, everybody. Welcome to the Housing, Communities and Local Government Select Committee. I am Florence Eshalomi. I am the Chair of the Committee. Can I ask my Committee colleagues to introduce themselves please?

I am Andrew Cooper, the Member of Parliament for Mid Cheshire.

I am Sarah Smith, the Member of Parliament for Hyndburn.

I am Sean Woodcock, the MP for Banbury.

I am Maya Ellis, the MP for Ribble Valley.

I am Chris Curtis, the MP for Milton Keynes North.

I am Will Forster, the MP for Woking.

Good morning. I am Lee Dillon, the MP for Newbury.

Can I ask our guests to introduce themselves, please?

Good morning. I am Nigel Cates, chief ombudsman at the New Homes Ombudsman Service.

Good morning. I am Chloe Fletcher, head of policy and external affairs at the Chartered Institute of Housing.

Good morning. I am Richard Smith, head of standards, innovation and research at NHBC.

Thank you for joining us this morning. This is the sixth evidence session of our inquiry on housing conditions in England, something that fills all our inboxes as Members of Parliament. I just wanted to start with a question in terms of the prevalence and severity of quality issues in new homes. Nigel, you mentioned that you are seeing a steady, significant number of issues with the quality of new homes, including major defects, safety issues and problems with damp and mould. Can you tell us a bit more about these problems and how you are dealing with the quality of new builds?

The New Homes Ombudsman Service is a voluntary service at the moment. It is important to understand that context. At the moment, we cover about 60% or 65% of the market. We do not see everything. In fact, it is worth saying that the complaints we see are from the companies that have chosen to sign up, which you would think are the companies that are trying to do the right thing and have the resources. There is a part that we do not see, which I will reference as well. We had our first complaint about three years ago, and now we are getting about 200 complaints a month. We cover the whole of the UK, but if you think about 200 complaints, as an estate, that is quite a sizeable amount coming to us. Complaints first go to the developers to see whether they can resolve them, so the issues that come to us are the ones that developers are not able to resolve. Of course, we see a huge range of different things. We cover sales, service aspects, quality and defects as well. The majority of the issues that we see are to do with physical aspects of the property or the wider estate, so perhaps promised parts of a wider development, whether that is a playground or an issue to do with unadopted roads. There is a theme that we see. Obviously, houses are very complicated. They are built by lots of different people. They are built in the wilds of the UK weather. The theme of the issues that come to us is not just to do with the defects and snagging issues, but to do with a breakdown in communication. Many customers can understand the fact that there might just be a few things to fix with a house or something that is not quite right at the time that they take possession of the property, but they expect developers to get on to that and deal with it really quickly. The cases that come to us are the ones where the customers feel that they are completely let down. They feel that they are project-managing things, and the impact on them individually is huge, affecting their mental health, their stress, their wellbeing and that of their family as well. Even where things are not major defects, the impact on people is significant. The types of issues that we see range from just an aggregate of lots of different snagging issues through to safety issues to do with poorly fitted fire equipment. We do see issues of damp and mould. I should be clear that it is not on the scale that the social housing regulators see. These are new properties, but we do see damp and mould, and we can see that sometimes that is pervasive throughout a property.

With the damp and mould issue, how quickly does that appear in new builds?

There is something that links the damp and mould issues that we see with the safety issues, which is around the property not being properly signed off. Something has gone wrong with the build process. In essence, that damp and mould has been there right from the start, because it is to do with the way that the materials have been stored. The property is not fit for purpose from the start. Obviously, that is a huge problem for people moving in, but often it is exacerbated because, in some of the cases we see, the developers have argued or sought to try to present the picture that this is a localised issue, and that it might be to do with the behaviour of the customer themselves or the occupants of the property, whereas actually, on further investigation, it turns out that this is something that is throughout the fabric of the building.

There is a quote from the Snagging Directory platform used by snagging companies that commented, “Professional snagging inspections consistently reveal concerning patterns where fundamental building principles are being compromised in the pursuit of rapid completion”. Would you say that this is what you are seeing?

The context is important. There is a data bias. Obviously, the stuff that comes to us is the bad stuff that people have not had resolved. If you look at it in the wider context, we probably see on average 1% to 2% of properties for individual builders, so 98% to 99% from the builders are things that are not coming to us, but yes, I would agree that for that 1% or 2%, which is critically important not just to the individuals but to confidence in the market, it often is linked to a rush to get to a completion date and not having proper sign-off checks. Often the checks in some companies might be done by the people who have built the property, so they are not seeing issues with fresh eyes.

They are marking their own homework sometimes.

A little bit, yes.

I would just like to add on this point that in the sector that I represent, which is the social housing sector mainly, we are seeing exactly the same issues in terms of the planning requirements and the section 106 agreements. Where housing associations or councils are looking to buy up some of these properties as part of the section 106 agreements, they are finding as customers that they are facing exactly the same issues: large numbers of defects coming out, that communication issue again, and not being able to resolve those problems quickly for the tenants moving in. Although we are talking about organisations being the consumers, ultimately the tenants of those properties are facing exactly the same problems as private homeowners. We have absolutely seen that. The NHF survey last year showed exactly those kinds of problems and a real difficulty resolving them, which then ends up in complaints to the Housing Ombudsman Service in our sector. We have done a survey of members around the section 106, and it is not just the in‑built problems of quality that are presenting an issue; it is the lack of forward thinking in terms of the build quality. We are seeing that housing associations do not want to be buying properties with gas boilers because they know they will have to pay to take them out again and to make them more energy-efficient. They are not the right size. They are not the right types of homes. Critically, sometimes they are just in developments that they know are going to be unaffordable in terms of service charges for the tenants going forward. Housing associations in the social housing sector as a whole are quite a large consumer of section 106 properties, so we are very interested in these problems being resolved for everybody across the market. It will make a big difference.

Richard, people cannot get warranties if there are so many issues with these supposedly new builds. How is the NHBC dealing with this?

The NHBC is a not-for-profit organisation. We have a dual role with warranty and building control. We have a vested interest in ensuring that homes are built right first time; that is the most important thing to say. What I would say is that, in the year ending March 2025, we paid £86.4 million out in claims. That is over the homes that we have on cover over a 10-year period, so about 1.5 million homes, but that actual figure has gone down from what it was. Some of the trends that we are seeing are showing that the quality is improving. At NHBC, we are investing £100 million of our own funds in the development of training hubs and academies for apprenticeships. We have a target to build 12 of these hubs with 3,000 apprenticeships. We are trying to do those sorts of things to encourage and promote that build quality aspect. On the builder satisfaction survey, 93% of new homeowners say that they would recommend their builder to a friend; 90% are satisfied with the quality of their new home. There are still 10% who are not on that basis, but to put that into context, as Nigel just said, while there is unfortunately that small proportion that still has a bit of an issue with the quality of new homes, in general terms we work with builders to promote construction quality. Getting it right first time is the most important aspect for us.

Of that 10% who are not, is that beyond cosmetic imperfections? What is the main issue?

I do not have the full details of what that 10% is. It is the Home Builders Federation survey in relation to that. Again, it is probably more an area for Nigel to comment on from a New Homes Ombudsman point of view. Just to talk about our claims experience, we have a warranty that covers insolvency cover pre-purchase. That is protection to a consumer if a builder goes into administration and a deposit is paid; we could either complete the property or refund the deposit. We have a two-year builder liability period where the builder is responsible for any remediation during that time. We would step in if the builder did not carry out their obligations there. Then years 3 to 10 are about more major damage where, if there is a significant defect within the property, either the builder would remediate or, again, we would step in and remediate that as well. There are quite a few layers in relation to that, but, on the exact figure of that 10%, I cannot give you the full details.

You said it was £86 million paid back from £100 million. That shows a drop in value, but it could show an increase in cases but just a lot of lower-level cases. Do you have a breakdown of what that £86 million was on? Was it major repairs or lots of minor repairs? Then we can see that trend data as well.

I see your point there. We work quite closely with builders to make sure that they meet their obligations in the first two years. We are very careful to work with the right builders in that respect so they can carry out the right remediation and whatever. My experience of claims is that predominantly water ingress is the most common claim, especially in years 3 to 10. More commonly, claims can manifest in years 6 to 7 when certain materials may have deteriorated a little bit by that time. Water ingress in roofs is our highest claim area, and water ingress through external walls is our second highest. That is in both value and notifications. We are just starting some campaigns on roofing because the future homes standard was launched a couple of weeks ago, and there are other requirements to install photovoltaic panels on roofs, for example. That is a path to water ingress, so we will focus on that.

Would you be able to write to the Committee afterwards with that full breakdown?

I will see what I can find. We can, yes.

The Government have a target to build 1.5 million homes over this Parliament. The Ministry told us that a robust regulatory framework will ensure that that commitment is delivered safely and sustainably. How robust is the regulatory framework governing the quality of new build homes?

Shall I cover it from the redress point of view? We do not set the standards in terms of building regulations and so on; that is for others, but we have the new homes quality code, which is linked to the New Homes Ombudsman Service. As I said, it covers the majority of the market, but if we cover 60% or 65% there is 35% or 40% outside of the market. The new homes quality code sets standards that go much higher than the law. Really importantly, it brings in the ability for customers to have independent, impartial redress from an ombudsman service if things have gone wrong, which is a really important protection not just for the individual, but for confidence in the overall system. That works well. You can see that from the growth in terms of cases that we have, but also from the efforts that the builders who have signed up have put into improving their practices, improving their customer care, understanding the root cause of issues, and fixing things. Over time, we will see a decrease in the number of problems. Where it fails—and there is a failure—is in the 35% that is out. I would say it is not robust at all. You have a patchwork of codes that are different but, in many cases, just replicate what people had in general consumer protection law, not specific consumer protection for new homes, and linked to quite a niche or narrow adjudication system. Obviously, that impacts those individuals, but there is also a big systemic impact. You lose the eyes and ears that an ombudsman service can bring in terms of really understanding what matters in the real world. You have regulation that can set the standards and prohibited practices in practice, but the ombudsman service, if it covers everything like a statutory service would, sees what really matters to customers and what is actually going wrong, and it can feed that back into a wider regime. At the moment, we lose in two regards: first, there are those people for whom it is just outside their control, whether for geographic reasons or because the developer that they have bought a house from does not have the protections of a code and an ombudsman service; secondly, you lose the systemic benefits.

I would like to echo everything that Nigel has just said. In that wider context, the Government are doing some really good work in this area. It is getting better, but I was sitting in a meeting recently where parts of the industry were described as the wild west. We absolutely support the 1.5 million homes target, but we need to ensure that those homes are built safely and at really good quality. They are going to be with us for decades to come. It is really important that we get this right and that we do not waste money and have to put things right in the future. The work that Nigel and the New Homes Ombudsman Service are doing is improving things, but it needs to be mandatory across the whole sector. In our opinion, it needs to cover the social housing sector, affordable homes, and the types of homes that social housing organisations are buying for their tenants. We need to get rid of permitted development rights that allow some developers to make changes to office blocks that are no longer in use, which creates what many are describing as the new slums of the town. I come from Harlow New Town. We have Terminus House in the town centre, which one of the residents described as a prison without bars. It is awful. In a new town that was developed to provide those wonderful new homes that my grandparents moved into that were safe, quiet, airy and built well, we are creating these shoeboxes with no natural light, no room, and no place to go and play if you have children. We absolutely cannot allow parts of the sector to be left like that, so we need to make sure that the whole thing comes together. The work on the single construction regulator is going ahead. It is incredibly complicated work. If quality was moved into that area alongside safety, we could see a framework or ecosystem developed that could absolutely knit all of the existing regulation together, making sure that every single home and tenure is covered, and providing that foundation to go forward.

Richard, you talked earlier about the value of claims going down, but the NHBC Foundation has reported that, historically, increases in the volumes of house building coincide with rises in the potential number of defects and the lowering of levels of customer satisfaction. Assuming these homes do get built as we head towards the 1.5 million, can we expect that again? What problems might we expect as the rate of house building hopefully starts going up?

First of all, at NHBC we fully support the delivery of 1.5 million new homes. It is a stretching target and it could be challenging to reach, but at NHBC we are running various quality assurance programmes—we call them our construction quality reviews—that go further than just our risk management approach, providing development for builders. Going forward on that, again, we want to continue to maintain that quality across the board. Another area that we think is a real positive is the use of offsite construction and modern methods of construction. There is more systemised housing based in factories where the quality control can be more consistently approached. We are seeing that a majority of the larger developers are now either acquiring factories or working in partnership with manufacturers or suppliers of various types of panellised systems, so not full volumetric systems. That is then providing much more of a consistent approach to construction, which is having that effect. The benefit is that standardisation takes away that element of deviation on site that is quite often an issue. Going back to the skills objective, we are putting that investment in skills because, again, it is in our interest that we get that right first time. As NHBC, we would pay out on claims and increase on that, which is not what we want to do because that is a bad experience for consumers.

This is just a quick question to you, Richard. The NHBC provides road and sewer bonds to developers to potentially cover the costs of completing construction, should the developer be unable or unwilling to complete. I have heard evidence in my area of where councils are requiring 100% coverage on the bonds. That is not leaving enough bond capacity for an individual house builder for the sewer proportion, and therefore the sewer bond would never cover the true construction cost if that had to be finished. I am just wondering what your reflections are on whether that bond system is still fit for purpose—whether you think it is functioning as it was intended to.

I do not do that much on that side of road and sewer bonds at NHBC, but at NHBC we probably have the most robust process in place in relation to road and sewer bonds. It varies significantly based on the size of the developer and whether the warranty provider can offer that bond or facility. There seems to be quite an inconsistency between local authorities about what is required. I would suggest that that could be an area of focus to look at how there is more of a consistent approach across England in the way that road and sewer bonds are actually applied, and at agreements between local authorities, because I believe that is quite variable

Does that apply to utilities as well, so United Utilities versus Thames Water versus Severn Trent?

Typically, the road or sewer bond is the road and sewer in that street. Obviously, that would impact on different utilities going in there, but that would be more connected with that.

In my constituency of Ribble Valley we have had a lot of home builds in the last few decades, but one of the consistent things I get in my inbox is about challenges of snagging. As an opening question, for the average person who is buying one of these new build houses, how effective do you think they find the process of reporting and finding defects and getting that resolved?

This is slightly an ombudsman’s answer, but it is going to depend. Some would find it incredibly effective. We have genuinely been really impressed by some of the builders, not just with where they started three years ago when the ombudsman came in, but with some of the changes they have made. They have put in consumer care teams. In the way they move data around, identify problems and conduct root cause analysis, it works. We can really see that in the percentage of complaints that come through from those individual companies. For others, they would find it incredibly frustrating. Their emotional experience would be, “I am really excited. I have a new house. No one has ever lived in it before. It does not have any of those problems. I have gone round the showhouse.” Then they take the keys. They come in and they find, “Wait a minute. There is not just this problem. There are 20 or 30 problems.” As I said earlier, I think people can get their head around that and say, “Okay, I understand there are some things that need to be finished off.” There are different degrees of seriousness, but it is about when it turns into, “I am the one driving it. You have given up on me. You took my money. You have given me the keys, and I am now having to project-manage five different subcontractors turning up. They don’t turn up on time. We have the wrong communication. You are not explaining this. You told me this happened and it didn’t happen. You have said that is fixed. I know it isn’t fixed: I am standing in front of it.” Some people’s journeys go from that super-positive emotion to not just a few months but six months, nine months or a year of incredible pain. We hear this from surveys and things that come to us. They feel like, “I wish I had never had this. I wish I had never got this property. I wish I had never done this.” It is important to recognise that they are a small proportion, but those people are having a horrendous journey. They will go and tell everyone else, and that affects the confidence in the overall market. You end up with the percentages that we hear about of people who say, “I would never buy a new build property.”

Sixty-five per cent of large housing associations were reporting those sorts of problems with defects and then getting them fixed as occurring “quite frequently” or “very frequently”. That almost gives you that picture that they are buying quite a large proportion of the market and, again, affecting confidence, as we have then seen with the problem of developers not being able to get rid of some of the properties. In my opinion, the Government reducing the affordability requirements is the wrong solution to that problem. We need to make sure that we are getting the homes right in the first place and rebuilding that confidence by having developers work closely with registered providers and local authorities. Then we would be able to rebuild and get quality for everyone, including private homeowners and social tenants.

At NHBC, we welcome the role of a snagging specialist. That is an important role. It is my understanding that the majority of the developers that we work with also welcome the role of a snagging specialist. It is good for a snagging specialist to give an impartial view of a home before it is occupied by a purchaser. There are a few areas that I would like to emphasise. It is a non-regulated sector, so there are two key organisations that do this: the Residential Property Surveyors Association and the RICS. Sometimes there is difficulty about how they measure snagging. For example, with NHBC and our standards, because our standards are there, then if someone is buying an NHBC-insured property, they have something to measure it against, but if it is with another warranty provider that does not have any standards, it is very difficult to say, “What do you snag that against?” That is just something that is a focus area. There probably should be some form of a benchmark or standard for snagging specialists so that it is quite consistent across the board.

Just to build on that, obviously the Government have committed to introducing a new statutory single consumer code for builders. How far do you think those changes will go towards improving these protections?

In theory, it could make a big difference. It is working for the 65% of people who are covered. The code that is in place from the new homes quality code is broad and encompasses all aspects of the sale, but there will be some gaps, and the Government need to look at that. How does it cover people who have bought private properties from social providers? How does it cover conversions? How does it cover refurbishments that result in extra properties? There are questions around wider estate management and so on. I know it is the snagging point that you are making, but those wider things can have huge impacts. The code needs to be defined with the right scope so that it really picks up all of the problems. The benefit of having a code is that it is flexible in the sense of adaptive regulation, so it is not causing unnecessary barriers or burdens for business. The business can have the certainty of knowing that there is a code in place, but knowing that that will be used on an individual basis. The ball is in the Government’s court to make this something that genuinely works to fix those problems.

On that, you have told us in your evidence that a substantial proportion of SME builders have not signed up to the new homes quality code. Why do you think that is, and how do you think the Government could increase that compliance?

The numbers that have signed up are increasing, but it is a market that has a small number of very large players building 10,000 houses or whatever it is, and then this huge tail down to the people who might build one house this year and no houses for speculative build next year. There will be a number of different reasons. A lot of those firms just will not be aware of it. Their focus is on how many other regulations are coming through and how many different things there are. It is a hard job if you are a small business trying to keep on top of every aspect of all the different laws that apply. This is going to be low down on their level. Some of those will be fantastic builders. Let us be honest. They are really close to their customers. They really know what they are doing. They will have the best reputations. There will also be some firms that are just absolutely staying away from it. They do not want to be part of it. They do not want the burden and the risk. They view it as something that will harm them because they don’t want to apply the higher standards. They are not consumer-friendly. There is a whole mix.

Do you think that small number of firms need to be required to do so? Do the Government have to force them?

Yes, absolutely, because it protects everyone. The customers of those builders are the people who need the most protection, but it also enables the data and intelligence to be all-encompassing and really pick up the worst practices. It has to be statutory for everyone.

It does not just have to be statutory. It has to cover those wider scenarios where a home is sold under a shared ownership scheme to a social landlord provider, to an institutional investor who is doing a build-to-rent scheme or to an individual landlord, because we are all ending up living in these homes. It does not matter who is buying it. The protection should be for everybody.

To the point you made earlier, it is that reputation of the whole industry that it is going to affect, so it is in everyone’s interests to get this right.

Richard, how confident are you that there is sufficient building control capacity to effectively check the new homes that are being built in accordance with building regulations?

This is probably down to the fact that we have the new Building Safety Regulator now in place. From an NHBC point of view, we went through the process of registering our staff. We have in excess of 400 staff who have gone through the Building Safety Regulator. I am aware that there are, in other parts of the industry, a number that may have left the industry for whatever reason, but we have managed to maintain the majority of our staff. For the delivery of new homes, we feel quite confident that we have good numbers to deliver that. The area that is worth noting is that the BSR is a completely new regulator from scratch. It is only a few years in, and there have been a few delays early on, but we are seeing signs of improvement and development now. That is encouraging as well. I believe there should be more building control specialists in the industry across the board, but we feel as though we are in a good position at NHBC.

You told us that there was no nationally accepted quality assurance standard for construction in the UK new build housing sector. How does this affect the quality of new builds, and what do you think we should do about it?

This is an interesting one. You are right. I don’t think there is a national quality standard for new homes. There has been a lot of regulatory change over the last five years with the BSR. My concern would be that if we brought in a quality standard now or quite soon, that is probably another layer of change that could slow down the plan to deliver 1.5 million new homes. There is a balance to what comes in. As an industry, we are already seeing some developments. We are working with the New Homes Ombudsman. If we have a new quality code and those kinds of areas that can work with developers to improve construction quality that way, we would be supportive of a quality standard, but I would just urge a bit of caution about the amount of regulatory change that has happened quite quickly over the last five years.

We would absolutely support a new base standard that goes across the whole sector. The danger is that if we don’t do it now while we are trying to build that many homes, we are baking in those future problems that we will have to come back to. Taxpayers and everyone else will end up paying for them, as the history of Grenfell unfortunately showed us.

I would just add that, from an ombudsman point of view, clearly we support the standards where they encourage innovation as well and are not just holding things back. It is not just about having a standard; it is about whether a building is actually built to the standard. It is about inspections and having the right process around that.

Jumping back to the first question, are you confident that there is enough building control capacity in Britain if we do end up ramping up to 1.5 million?

It is outside the scope of what we see. We definitely have allegations from customers that no inspection took place, or that one house on a site was inspected and another 10 were not. Because of our role looking at individual complaints, I am afraid we don’t get to see that data, but we do hear that complaint.

We certainly hear about a lack of skills and labour, as well as concerns about an ageing workforce who will be retiring in the next five to 10 years. We really need everybody to be working together. Surveyors are like gold dust, whether you are a housing developer, a maintainer or in building control. The LGA had a survey at the end of 2023 that showed that recruitment and retention problems were quite severe in that particular area. What I know from local authorities is that that has not changed particularly.

I would like to clarify that we inspect every home. We carry out a key-stage inspection process, plus additional inspections. We are also bringing in our own apprentices. We are bringing in about 20 apprentices a year. We have a training programme, and we are also looking at an armed forces programme.

My questions are to do with the accessibility of new homes now. The part M building regulations came in in 2010. The previous Government had a commitment that all new homes would meet the part M4(2) standard, although they did not actually make any progress towards enacting that commitment, as far as we can tell. Nevertheless, rather than mandating part M4(2) for all new build homes, this Government are proposing that at least 40% of new homes should be built to that standard. Chloe, do you agree with the Government’s position?

No, we don’t. We would like to see that made mandatory across 100% of new homes. We think it would benefit everybody who is working in new build because if you are just building to one standard, it becomes the norm. That is how you will make your savings and cost efficiencies. It also means that we are properly preparing for an ageing and, unfortunately, a sicker population. Our new build homes are such a small proportion of the homes that we live in. The vast majority, 70%, of our homes that we live in are pre-1980, with some of them significantly older than that. We need to make sure that the new build that we are doing actually fills that huge gap. We know we have people stuck in owner-occupation, social housing and the private rented sector in really unsuitable housing for them, which just stops them doing anything with their life. It prevents so many things—employment and general wellbeing—and it creates more health problems. If we can do this and get the industry up and ready for that new accessibility standard, it would be good for everyone in society.

We see very limited cases of it; let me just start by saying that. We do see problems, but the type of problems that we see around accessibility come back to communication. I can think of individual cases where someone has bought a particular plot with a particular house because it was going to have a wheelchair ramp or particular access, and then the builders made changes without communicating that. This is not a car or something like that where, if you get the wrong one, you swap it out for the right one. You have that property. For me, it just highlights the fact that, regardless of standards and commitments, all builders need to be on top of those communications and really understanding vulnerabilities in their customers and their customer needs.

I was a member of the Building Regulations Advisory Committee. I know that a revised part M in scope has been in preparation for some time. We are just waiting for that document to come out, but there may be a direction of travel where M4(2) becomes the norm going forward. We are just waiting for the release of the guidance on that at this moment.

Chloe, the Government have said that their proposal will ensure that the necessary level of accessible housing is provided, while giving local authorities the flexibility to maximise house building overall. To what extent do you think that mandating part M4(2) would constrain the supply of new homes, if indeed you think it would?

I don’t think it would if we had a reasonable timescale to get there. The long-term housing strategy, which we have all been waiting for for a while now, is an excellent opportunity to set out a reasonable timescale to say, “We could start at 40%, but by such-and-such a date we will be expecting everybody to work towards that.”

The Government have not included a recommendation for a minimum percentage of new build homes that should comply with M4(3), although in the London plan they are requiring 10%. Do you think that the Government should specify a minimum percentage of new homes that should comply with M4(3) nationally?

Yes, absolutely, and it should be all of them so that we can move forward on that basis. Q242 Maya Ellis: The Chartered Institute of Housing told us that most new homes are not being built to high levels of resilience to climate change, despite the likelihood that most of these homes will be in use until at least 2080. What impact will this have if it is not addressed? How far will the future homes and buildings standard go to address the concerns that you have?

We are really pleased with the future homes standard as far as it goes, but we want it to go further. Apart from accessibility, the two big issues on climate sustainability are flooding and overheating. It does not go far enough on either of those two issues. Part O of the building regulations needs to be strengthened just to make sure that all the homes we are building now will be safe in our future—and sometimes existing—summers. There was a really good example from a housing association, Midland Heart, which has done a development of 12 homes as a pilot on the future homes standard. That is really testing well with residents on other aspects of climate change and energy efficiency, but still we are recording very high temperatures in some of our hotter summers recently, which shows that those standards do not go quite far enough for what we are looking at in the future. The other issue that we have is that, strategically, we don’t feel that the new standards go as far as they could. The NPPF requiring people to have regard to the Climate Change Committee’s latest advice, for example, would be very helpful. We very much do not agree with the proposal to disapply the sequential test from homes at risk of surface water, because that is an issue that will increase over our warmer, wetter summers. We need to make sure that, in the round, planning authorities and developers are really considering where we are going to be looking in the next decade and years to come. Q243 Maya Ellis: We are increasingly having hotter summers. Most people in new homes now are experiencing that sense that there are at least days or weeks every summer where you can feel that those homes are retaining heat in that way. What do you think the blocker is from the political and public will point of view? To the average person, it makes sense. They can see that those homes are only going to get hotter, and that is the problem. Do you think it is just that there are too many other challenges? What do you think will shift that dial to make it become imperative from a public will point of view?

It is a real change of attitude in all of us. We have done so much in England and the UK more widely, which is really great, on tackling the cold and energy efficiency issue because, culturally, we know it gets cold and we don’t like that. We are not used to having incredibly hot summers. Also, we have created that problem by sealing up our houses and making them more insulated against the cold. This feeds into the damp and mould issue as well. We are suddenly realising that we do actually need that ventilation. It is about developers and everybody, including planners, building control people and us, really fully understanding the role that some of our leaky windows were playing in that in terms of keeping things cooler, and building that into our new standards. Q244 Maya Ellis: Nigel referenced earlier that, with damp and mould, often there is this tussle between individuals’ behaviour within a property and the actual build of the building. With temperature and heat, do you think an element of public education is needed on how to manage homes to keep them more temperature-balanced in summer, or do you think that it is, on the whole, a build question?

On the whole it is a build issue. There is a bit of education that comes around new heating technologies, coping with hotter summers, pulling our blinds and curtains, and having shutters and things. Fundamentally, we can design buildings to cope.

Running through this conversation, we have heard a lot about extra burdens that you should put on house builders, reasonably or unreasonably, when they are building a new home. The other inquiry we are looking at is the affordability of buying a house. It is also notable that almost nobody in this country can afford to build a new build house right now, for a variety of reasons. I would argue that one of them is that the specifications, restrictions and rules that we put on what needs to be done in order to build a new home are so great that it makes it difficult to build enough of them at the cost that people can buy them at. In that spirit, while there are lots of things that I am sure you would like new house builders to be doing when they build new homes, is there anything you think they are currently asked to do that is putting too much of a burden on them and adding too much to the cost?

I personally don’t think that there is any one individual thing that we are asking them to do. Part of the problem is that it is so fragmented, and people don’t have a clear idea. Some of it is voluntary; some of it is not. Having a longer‑term vision where you clearly tie it all together and make it easier for developers to produce one house that can be sold to an individual consumer, sold to a social landlord or be put into the private rented sector, that clearly meets a very basic, decent quality, and that is a safe home to live in, would make it easier and therefore cheaper in the long term.

The one thing we commented on in the NHBC Foundation publication about the effective delivery of 1.5 million new homes is that there needs to be a more structured approach to regulatory change. I want to give an example. We are seeing a change that has just come out in relation to the future homes standard. That could have an effect of changing a number of house types. We could then see a change for M4(2), which would change house types. Then we may have a change for part K, which will change the house types. If those three regulatory changes came out at the same time, there would be one change to house types. It would incorporate the stairs, the M4(2) requirements and the future homes standard. A bit more of a structured approach in relation to the regulatory changes would go a long way and help a lot.

I would agree. Consistency and certainty can really help with cost. From the ombudsman point of view, having a single level playing field and that certainty for all customers increases confidence from consumers. They buy more properties. They are happier buying those properties. It brings the cost of the build down, so there are strong market effects that would happen from having certainty of regulation and redress.

Thank you very much. You have given us a lot of areas that we could include in our report. Witnesses: Steve Turner, Jennie Daly and Stephen Teagle.

Welcome to the second part of our inquiry on housing conditions in England. Can I ask our guests to introduce themselves, please?

I am the chief executive of partnerships and regeneration at Vistry Group. Good morning.

Good morning. I am the chief executive of Taylor Wimpey.

I am executive director at the Home Builders Federation.

Thank you for joining us this morning. We will start on the issue around the really ambitious target of 1.5 million new homes.

For the rate of house building to increase to meet the target of 1.5 million homes, it would mean an average of 300,000 or so being built each year. In recent memory, the highest amount that we have achieved has been about 250,000 a year. Do you think that target is still achievable? If so, will the sector be able to meet that target without compromising on quality?

It will be incredibly challenging. We are currently building around 200,000 homes a year. There are no indications at the minute of any significant uptick on that number, so we are already well short of where we need to be to hit that 1.5 million number. There are a number of significant constraints. As was referenced in the last session, costs have gone up hugely in recent years. Costs have increased by about £76,000 per home, whereas house sale prices have not increased massively. That is down to increases in taxes on development, increases in regulatory costs, etc. Of course, affordability was mentioned as well in terms of first-time buyers in particular who are struggling to buy. Without that level of demand, builders cannot invest in new sites. At the minute, it is very challenging to see how we are going to get upwards to 300,000 a year or to 1.5 million. If we do, there is now a level of safeguarding in place to guarantee that quality levels are maintained. What we saw in 2012 and 2013 was a drop in quality when volumes went up. As Nigel said in the last session, the ombudsman is doing a very good job on the majority of homes that are built now. We need to see that across the board in terms of 100%. I think it was first committed in 2017 by Sajid Javid that the ombudsman and New Homes Quality Board framework would be put on a statutory footing. We are very supportive of moves to do that, which would ensure that if volumes go up we can maintain that quality.

You referenced there the increase of £76,000 in costs. Over what period is that?

That is over the last five years.

I will try to add rather than repeat. In terms of the ambition, we have a significant and chronic deficit of housing in the UK and in England. It deserves an ambitious target to galvanise all stakeholders across housing delivery. There are some fundamental foundations, if you forgive the term, that need to be put in place, the delivery of appropriate levels of land that are viable to deliver housing being one of the first. Therefore, the poor state of our local plan system, the lack of up-to-date plans, and the fact that planning permissions have been falling progressively over the last five years mean that there is a considerable amount of work still to be done despite the good work that Government have introduced through the NPPF and other changes to ensure that there is an appropriate level of supply. The reason that I mention supply is that it is also important that the smooth delivery of land through the planning process to development supports consistency, efficiency and productivity within the sector. When sites are significantly delayed through the planning system, it leads to very intensive levels of delivery. That can have effects on the ability to smooth labour through what is a multi-trade process. At times, it can put pressure on quality. Planning has more to offer than just the fundamental land; it is about consistency and readily deliverable planning. I believe that we can deliver 300,000 homes, not in the private sector alone but across a range of tenures, including council house building and social housing delivery. It also requires investment and retention of skills. The cyclical nature of the sector can be a barrier to the confidence of consistently investing in those skills and in the wider supply chain, like materials and other elements that are needed to deliver high-quality homes.

What do you think of the actions that the Government have been taking, specifically on skills? There have been quite a lot of commitments around construction skills hubs and a number of other areas. Is that going far enough at this point, given your mention of skills there?

A lot of active work is being undertaken around skills and increasing skills delivery into the sector, which is very laudable. Taylor Wimpey and many in our peer group support NHBC, the work within CLC, the Construction Skills Mission Board and the HBF. There are a wide variety of initiatives around bringing apprentices into the sector and ensuring that we have the skilled workforce that we need for the future. We are also in a period where housing demand is low because of affordability challenges. Potentially, confidence is at a low point as a result, and therefore continuing investment in generating uplift in skills when the uplift in demand is not visible becomes a challenge for businesses.

Going back to your first question, it is an ambitious but absolutely necessary target. As a sector, we can meet it. The Government have put in place some very strong and unprecedented supply-side initiatives. Jennie mentioned the need for diversity of tenure. In the affordable sector, the demand-side interventions by the Government, increasing the capacity for housing associations and local authorities, and the announcement of the £39 billion social and affordable homes programme, really will be instrumental in trying to lift the output to the 300,000 level. The Government are to be applauded for what they have done in their first two years of office. Skills are really important in ensuring that we manage the risks around increased volumes in terms of quality, which was the second part of your question. There are many ways in which we face into that. First, we have seen, over the last two decades, a combination of regulation and a focus on quality assurance. Customer expectations drive quality improvement. From our perspective, some form of national quality assurance would be very welcome. Skills investment is key. The Government have announced their investment in the skills mission, CITB reform, and construction and technical excellence colleges. There are a range of measures the Government are taking that can be delivered hand in glove with the sector’s investment as well, which is really important. That will help. Our own self-help focus has to be around improving our accountability, not only to our customers who purchase individual homes, but to our partners in respect of the homes that we deliver. We have spent some time over the last two years introducing something that we are very proud of—our partner journey. It focuses on the very issues that arose in that first session around the quality of affordable housing. Over 70% of the homes that we deliver are for affordable or institutional investors. Making sure that we are managing the quality effectively, hand in glove with our assurance colleagues but also in terms of our own processes, is very important. There are processes that we have put in place to avoid that risk as volumes increase. There are routes to do that and do that successfully.

I assume that that will demonstrate significant value to the business over time, because you are reducing cost by having the systems in place earlier and being preventive in your approach to that stakeholder engagement.

That is absolutely right. It is a circular investment, because you are doing more work with your partners going forward as you lift delivery. That circular investment is very helpful and it ensures that our partners can see that we are delivering to the quality that they expect. Another aspect of that that came up earlier was standardisation. By going down the route of standardisation, you are also ensuring that you are mitigating the risks associated with quality issues, because you are not building bespoke homes, where unforeseen issues often arise.

That is welcome to hear, Stephen, because in essence there would be a situation where some consumers and residents feel that the quality of social homes in comparison to the private homes that are sold is not on a par. We had a situation a few years ago in London where the entrances of some buildings that housed social tenants were very different from those to the units that private tenants were buying. They were termed “poor doors”. In some developments the social tenants were not allowed access to the play area, and the quality of the play area differed between the two. Why do you think there is a reluctance among some other builders and developers to follow what Vistry is doing?

As we see an increase in the percentage of affordable homes and an increase in the delivery of build-to-rent homes using institutional investment, that will lead to diversity across the house building sector in terms of delivery and familiarity with different tenures. That will naturally drive up the quality issue. Something we have done that is replicable is that we have developed our own survey for our partners, which mirrors the NHBC survey in terms of asking for quality observations on build quality, handover and service delivery before and after. We have applied a very similar metric to the NHBC individual open market customer purchase process. That has really drawn dividends for us. Since we started to monitor the performance and the quality that our partners are receiving, we have seen an upward trajectory in the quality that we are delivering. Measuring it as an industry is a really important first step to then drive improvements.

Linked back to the question I asked at the first panel, we have been told that the 1.5 million homes can be delivered safely and sustainability in terms of quality because of a robust regulatory framework. The New Homes Ombudsman Service told us in that same session that it does not see it as robust at all. Do you agree?

There are frustrations. I think the New Homes Ombudsman was referring to the fact that it is not a mandatory requirement for all home builders to be part of its framework. At the minute, you have a rump of the industry. About 60% or 65% of the industry has voluntarily signed up. It is quite evident that that is driving behaviours in terms of customer service levels and build quality. We need to move towards a framework that requires all developers to be on the same framework, and to be covered by the remit of the New Homes Ombudsman, because it is quite clear that that drives behaviours in terms of how you deal with your customers.

For Taylor Wimpey and Vistry, can you talk more about some of the systemic pressures that affect the quality of new builds? I would be interested if you could lay that out a little more.

The responsibility for quality starts with the house builder, but we are part of a value chain. The work that we undertake starts with our technical specifications and our procurement of materials. We work with our materials supply chain. They train our teams on site. We feed back any issues that we may see. We have construction specifications. Our teams are trained. Our tenders require our subcontractors to deliver in accordance with quite detailed construction specifications. We have our own quality managers in every one of our businesses. We have site managers and oversight of all of the trades on each site. We require the majority of trades to have supervision. On site, we have build quality checklists. As you heard from the NHBC, we have key-stage inspections. There is also other continuous improvement work that we do alongside the NHBC, whether that is construction quality reviews, training through the whole of the supply chain, or the project flow for delivery. Then there is the warranty provision. Again, as the NHBC outlined, that is dealing with pre-completion, the initial completion period of two years for which the developer is wholly responsible, and then the remaining three to 10 years where the NHBC will support the customer should there be defects. Taylor Wimpey and many of our peer group retain responsibility through that period and undertake works should they arise. The NHBC then has an arbitration service, should there be any issues. Ultimately, the customer has the ability to seek redress through the New Homes Ombudsman. Taylor Wimpey signed up to the New Homes Ombudsman Service; we were one of the very first house builders to do so. We have had a very strong experience through that process, and a learning experience. There are a number of quality checks and inputs throughout the process, but they start with the house builder. Our own process is an engagement with our supply chain, including training, and then the very significant comfort that the customer will have through the NHBC warranty process, and redress through the New Homes Ombudsman.

It is almost amazing that there are any problems at all, given what you have just set out and the number of stages it goes through. It just seems amazing that so many seem to slip through.

We try to deliver on a “right first time” basis. That is not the first time that you have heard that phrase today. You will have heard that from NHBC. We deal with a range of challenges. We are building in the natural environment. There can be topographical changes and weather challenges. Standardisation, as Stephen has referred to, helps us eliminate some of the points of failure. Quality has meaningfully improved year on year, but it is a continuous process. As regulations change, the bar is lifted consistently. We have to work towards that continuous improvement, raising the bar each time.

The Government have committed to introducing a new statutory New Homes Ombudsman scheme and a single consumer code. That will mean that builders have to sign up to it. How far do you think those changes will go towards improving protection for the buyers of new build homes in our constituencies? What do you think a reasonable timescale should be to allow developers to sign up for it and comply with that new code?

The new homes quality code, which the large house builders are already signed up to, already results in us delivering a good quality service. I would expect that the introduction of that being applied more widely across the industry will mean that some of the smaller house builders will need to participate in a way that they have not previously. We need to allow a sensible time for the diversity in the sector to be supported in terms of the application of that as a standard. For the large house builders, it will not be an issue at all. We can move very straightforwardly to endorsing and participating in that. In terms of whether it will drive up standards, that again goes back to one of the points in the earlier hearing, which is about the extent to which that applies across all categories and tenure types. Ensuring that that standard is used and applied across all tenures, not just open-market housing, will be very helpful.

As I have already mentioned, Taylor Wimpey was one of the early adopters of the new homes quality code and the New Homes Ombudsman Service. I am also, as is Steve, a non-executive director of the New Homes Quality Board. The process of preparing to join the new homes quality code was not insignificant. It did require systems change and investment across the large house builders at that early stage. We could see that some of the peer group took longer to implement those changes. Therefore, we cannot underestimate the increased burden and the time that SMEs need, as well as potentially support, education and facilitation, to help them engage appropriately with the statutory ombudsman. That said, Taylor Wimpey is very supportive of the ombudsman gaining statutory footing.

HBF is the same. We have been encouraging our members for a number of years to register with the New Homes Quality Board. The majority of our larger members and a growing number of smaller members have done so. As Jennie just said, there are more challenges at the minute for small developers across a range of different issues in terms of compliance with new and more complex regulations. The New Homes Quality Board is working with them. It has dropped the cost to small developers, which at the minute is key. The smallest developers now are only paying £300, and that goes up to £5,000 for companies with a turnover of £3 million. It is eminently affordable now. Clearly, it takes time. For some of the larger developers, it took quite significant amounts of time to change all the internal processes, so how you deal with the required customer journey through a complaints process. It will take time and education for SMEs, but the NHQB has been in position now for a number of years, so we need to be moving to a point where it is mandatory within a reasonable timeframe.

We heard about this as well from the previous panel. Would you support the proposal for 40% of new homes supplied to comply with M4(2), or would you agree with the point put forward, which is that if all homes were required to be to that one standard, there is a simplification across the whole sector in terms of what you are building?

Speaking from a Vistry perspective, our emerging and existing standard house types include properties that are NDSS-compliant and meet the quality standards for M4(2) as well. We have invested in the lines within our factory that allow us to deliver the timber frames to comply with that. We have had the advantage of many of our existing partners wanting to be early adopters of quality in terms of affordable housing, and to some extent within the build-to-rent sector as well. It has allowed us to work with them with a degree of confidence in putting investment into our capital facilities in order to deliver that into our factory facilities. I suspect that it will play a key part in the output of the social and affordable homes programme in terms of looking for that quality. If it was to be applied nationally, then that would not be a problem from a house building perspective, although there would be a timeframe within which everybody would have to adapt towards it. I come back to the basic premise that, as house builders, we are manufacturers and retailers of the homes. Essentially, the additional cost of delivering larger homes because it is a bigger footprint would be a burden on the land, not on the house builder.

In your experience, how long did it take to make that transition? What is the investment or the cost that that might have had at the scale that you are aiming to produce at?

There is a real advantage with volume. As you increase your volume, the additional costs per unit naturally come down. There are two aspects to that. The actual cost of delivering an NDSS home is relatively modest if you are dealing with it at volume and on a planned basis. The important thing is that it is a level playing field for everybody because when you then apply that to land, it obviously has a larger land take, so there are competitive and planning issues that need to be resolved as part of that. I would not put an exact price in terms of the additional costs, because it is very related to volume.

What about from the perspective of the private sector or those building largely for private buyers?

My distinction would be that the nationally described space standards—NDSS—and M4(2) are different. They are required to be identified in local plan policy. Therefore, the experience around the country is very different. Some local authorities do prescribe either the NDSS or M4(2), and in some instances M4(3). Not unlike Vistry, we have designed the vast majority of our standard house type range to meet those standards because of the significant differential that we see around the country. While there is some benefit in volume, in terms of land take and land cost, the inefficiencies and challenges that come with delivering M4(2) can be quite expensive, such as in areas that have more challenging topography. In areas where viability is already challenged with low house prices and increasing costs of regulation, it could be the final element on a marginal viability. It would be wrong to ignore that there is an inherent cost, and not all of that cost is capable of being deferred to a landowner where the land is already at low values. Effectively, you will just not get any new homes, because we will not be able to make it economically viable.

You would not mandate for all homes to be built to the M4(2) based on what you have just said, but what is a reasonable percentage objective for the Government, particularly given the challenges that we have around the suitability of housing to people’s needs and the ageing population?

Forty per cent is a challenge for industry as a whole. As Jennie said, a lot of it is regional. There are different requirements in different regions. Topography clearly adds cost. All of these things are deliverable, of course, but there then is a knock-on impact in terms of viability generally. All of the different asks of recent years that we have seen added on, such as biodiversity net gain and the future homes standards, are all very worthwhile from a different perspective, but when you add together all the costs that have been layered on, you get to a point where new housing becomes less viable. A report by Zoopla last September said that nearly two‑thirds of the country now is not viable to develop. We have to look at how we manage all of these costs in totality that are levied by different Government Departments. Anything on its own is achievable and deliverable, but it has knock-on implications in terms of viability or the volume of affordable housing you can deliver on that site, because of the cost and the economics of the site if you are adding on all these costs.

You mentioned that element of regionality—the impact it has on different parts of the country. Is the data out there around the estimated cost on M4(2) and M4(3) dependent on where you are building, or some of those specific challenges? If so, would that be possible to maybe not provide now, but for the Committee just to understand how that varies across?

Within a home footprint, it would be consistent. We would be able to give a cost within the build footprint. All sites are different—the fall of the land, road access—and that affects fundamental accessibility at the threshold. That is where some of the most significant costs are experienced, so that is a challenge. There is no doubt, though, that M4(3) is a much more significant cost. It is not an incremental increase in cost; it is a substantial increase in cost above M4(2).

I realise the cost does not fall on you, as Stephen said, which is why it might be difficult, but there must be some kind of average number we can put on the cost of going up to M4(2) or to M4(3).

As I said, within the footprint of a typical home, that is an estimate that we can probably provide, but that would not take into account the external challenges, which are often some of the most costly.

We have said in the calculations we have done to get to the 76,000 increase over the last five years, that it is around £2,000 per home.

Is that for M4(2) or M4(3)?

For M4(2), but clearly, depending on topography, etc, that will be higher in certain places.

Just back to your original point, Stephen, about it falling on the landowner: that may be true. When you are putting in for planning permission, the balance is usually social housing. All these extra restrictions that we put on are going to come out as either homes not being built or a decrease in the number of social homes being built, right?

You are absolutely right. We have seen the impact of that most recently with the adjustments within London to allow for amendments to affordable housing delivery under section 106. It is important to distinguish supply between greenfield sites and between brownfield sites where it is particularly difficult or where there are topographical or other issues that impact on viability. I would also distinguish between the delivery of affordable homes using grant funding and those that are a function of the viability of a site, based on a section 106 or planning obligation. Those are two quite different issues that will impact. Fundamentally, the regulatory burden and the cost of development, through the viability processes that house builders go through, does result in a residual impact on the land. Whether it is public sector or private sector land, eventually the land takes the strain. Given the system that we have in the UK, that is what is going to happen.

I am sure they are words that will be repeated back to you next time Vistry turns up to a planning committee and says that it has to drop the social housing requirement.

The reality is absolutely that, from our perspective, if viability results in a reduced percentage of section 106 affordable housing then we would look to maintain levels of affordable housing delivery through the use of grant. That is a separate issue from the issue about viability in terms of section 106.

In terms of that viability, Stephen, you mentioned that some of the new changes coming through—whether it is the future homes standards, some of the regulatory impact, building safety, electric vehicles—are having a big cost. You were quoted to say that the viability of house building is under acute pressure due to a mixture of costs. I think about the emails we receive as parliamentarians, where essentially, in some of these new developments, residents see many developers coming to committees agreeing to one thing, and then a few months down the line they will argue, “It is not viable; we have to reduce the element of social housing being provided.” When I think about the impact, the people on housing waiting lists, the number of people trying to get on to the housing ladder and the money they are spending on renting, if they were to look at the accounts of many developers, they will see profits and think, “Why is the issue of viability still coming up?”

From a simplistic point of view, I can see the argument. Any private company has to make profit. If they don’t make profit, they are not going to be in existence. On levels of affordable housing, we have moved to a model now where you are reliant on the private sector to deliver your affordable housing, whereas 30 years ago affordable housing was paid for by local and central Government. You are now relying on the private sector to deliver the majority of it.

With some access to grant.

With some access to grant, absolutely, but you have to make that an economically attractive deal for the developer to be able to deliver. Ultimately, the land seller will only accept a certain reduction on what they want to sell. A farmer or somebody can only sell a piece of land once, so there is a limited level of flexibility in what the land seller will sell the land for. The developer has to make a level of profit, and if the affordable housing requirements need reducing, that is the only way you can do it. We have a new building safety levy being proposed for later this year, which will add another £3,000 per home.

If you look at the fact that 72 people tragically lost their lives because of some elements of building safety, would you not say that for future developments we should always make sure we do not, under any circumstance, compromise on building safety?

Absolutely, and the building regulations allow for that. That is not quite what the building safety levy is being set out for. The future homes standard is expected to add another £11,000 per home. We have seen biodiversity net gain at £6,000 per home. All these things are absolutely justifiable in a different way, but the whole economics of the development changes when you add on these costs, so something has to give. In some instances, that has to be the percentage of affordable housing that is delivered.

What changes would you want Government to consider in terms of the way they are bringing in these regulator changes, to essentially help minimise the impact that developers and house builders will have to pick up?

We need to see a moratorium on the new taxes, levies and policy costs that are adding on to development. We need to see a pause on the building safety levy. We saw a new landfill tax brought in through the budget. We need a moratorium on new costs being added on, and a review of the costs that have been layered on over recent years, to work out which ones are absolutely necessary. If we want to get to 3 million homes, we have to find a way to make more development viable. I will go back to the Zoopla report that says over half the country is now not viable to develop. You are never going to get to 3 million unless you change that balance.

I will make a comment from a planning perspective. We can see, for example, in the recent consultations for the NPPF the suggestion that viability assessments should be undertaken at a local plan process, but that local plan process takes years. The subsequent planning application process takes years, and therefore the economic climate and the cost of regulation can have meaningfully changed from point A, when a site was proposed at a local plan, to the point of delivery. It is important to have an understanding of the timescales that are taken to bring forward developments, and how economic circumstances, regulatory costs and other issues can apply. Because there is a very structured approach to what is called the hierarchy of mitigation, building regulations and regulatory requirements are absolute, so there is no flexibility. Environmental impacts have to be mitigated. The scale of hierarchical requirements over the delivery of affordable housing is very significant, and affordable housing unfortunately then becomes that compressible element, because all other elements are fixed in regulation.

I agree with that. Rather than repeat the issue around the regulatory burden, I will add two things. We are discussing this as large-scale house builders who have large volumes of delivery. The regulatory burden is particularly difficult in terms of SMEs, so it is very important that we consider the diversity in the sector, and that we take actions and interventions politically to support the divergence of the sector and small and medium enterprises. Part of that is also about signposting the regulatory changes over time, because we have also heard about the impact on land that is owned and in flight, and already being commissioned to deliver homes. We have also heard about land taking the strain. It is important to signpost things in advance, so that that is the process that works through, rather than its impeding delivery over the near and short term.

Thank you very much. You have given us a lot of food for thought in terms of the industry’s ability to help the Government in delivering that 1.5 million target, but still ensuring that we have a robust framework and that safety is not compromised in the process of building those homes. Thank you for coming before the Committee this morning.