Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence

Memorandum by the National House Building Council (NHBC) (AH 86)

  1.  NHBC welcomes the Select Committee's decision to hold an inquiry into housing affordability and supply.

  There are three important areas in which NHBC's expertise and experience may inform the Committee's deliberations on housing supply: Modern Methods of Construction, Building Regulations and housing quality.

  The points we make are in summary form. We would be pleased to expand on any issue either in writing or by oral evidence.


2.1  NHBC's approach

  NHBC has played a leading role in facilitating housebuilders to develop non-conventional systems of construction (Modern Methods of Construction). We have worked closely over many years in providing technical expertise and advice in respect of new approaches, for example in relation to timber frame and light steel construction. In addition we have reshaped our inspection service to allow for the inspection of factory made systems. NHBC has therefore made a real contribution in assisting major builders such as Barratt, Redrow and Westbury, but also manufacturers and smaller builders to bring innovative systems into the market place.

  We believe that Modern Methods of Construction have an important role to play in assisting the industry to develop products and processes to improve efficiencies and quality and thus contribute to increased housing supply.

  In the past year we have worked closely with BRE and other key partners in developing a Quality Assurance Framework for MMC systems and we will shortly be launching a web site that assists builders, product manufacturers and others to understand what certification and accreditation for new methods of construction is necessary and provide a one stop shop for advice in this area.

2.2  Protecting consumers

  NHBC's has a unique and important role as both a standard setting technical authority and as an organisation that protects the consumer interest. With almost 70 years experience we are internationally recognised as the leading model for risk management for housebuilding and providing warranty and insurance protection for new homebuyers. As such we have a unique perspective on the importance of balancing the opportunities and risks in construction innovation.

  NHBC welcomes well-thought through and researched innovation. We must ensure that house purchasers and consumers generally are protected, by minimising risk through thorough research testing and development, and focusing on key issues such as durability and "repairability".

  At the recent 10th International Housing and Home Warranty Conference (IHHWC) held in Tokyo, there was considerable debate concerning the impact of ill-conceived modern methods of construction. There were presentations from Canada, New Zealand and the United States of America concerning examples of MMC systems which have proved disastrous for homeowners, housebuilders, warranty providers and ultimately taxpayers. The Canadian experience cost the Canadian Government $1 billion in direct repair costs, with indirect costs raising the total to Canadian $2 billion.

  There are clear lessons to learn from international experience which we would be pleased to share with the Select Committee.


  Building Regulations are an important aspect of public policy that have direct impact on housing supply. In recent years they have gone through a period of rapid change. The scope of regulation has been expanded beyond health and safety to embrace important environmental and social considerations such as disability access and are now moving on to address sustainability, although as we understand it there is no single definition of sustainability underlying the legislation. Whilst in some respects this could be seen as advantageous in that it avoids a too-narrow definition, the difficulty with this approach could be a trend to conflate environmental and social issues, thus placing a greater burden on what regulatory mechanisms are able to achieve.

  As a technical authority and as an Approved Inspector certifying almost 60% of homes in England and Wales for Building Regulation compliance, NHBC has played a very positive role in informing and shaping regulatory change delivering an efficient and consistent service. Through our participation in a range of European and UK committees and forums such as Building Regulations Advisory Committee (BRAC) we work closely with civil servants and other technical bodies to ensure that regulations are effectively framed and implemented. Recently we worked closely with the ODPM and the house-building industry to establish Robust Details Ltd, an important initiative to help the implementation of Part E (sound) changes.

  It is significant that NHBC Building Control provides greater protection for house-purchasers than when the function is carried out entirely by local authorities

  NHBC is concerned about the potential for future changes to Building Regulations to exacerbate difficulties in housing supply.

  Firstly, each change in Building Regulations requires significant operational changes amongst building companies and building control companies, and with each change in regulations come costs and additional risks as practitioners are given increasingly reduced time to absorb change and to ensure they are properly introduced. There is clearly a disproportionate effect on the new-homes sector within a single housing market comprising both new and second-hand housing.

  Secondly, it is our view that given the scale of these changes, the civil service resource in the ODPM is insufficient to manage the complex and increasingly wide scope of the work that needs to be done if Building Regulation changes are to succeed. One way forward would be to build on the success of the Robust Details framework developed for Part E, for which we provide the Secretariat. Here the sector demonstrated that with appropriate rigour and independence an independent regulatory regime can be developed which is clearly a good model for the future.

  The current framework for developing Building Regulations emphasises the strategic role of BRAC. NHBC has reservations about the structure of this body and the role it is tasked with in advising civil servants and ministers. In our view a partnership secretariat approach with tasks delegated to other groups using more private sector resource would provide a better support for civil servants and ministers in carrying out this work.


  The Select Committee's focus is affordability and supply. For NHBC the critical question is how we ensure that the public is given not only housing in the right volume but also at the right quality and durability. The UK has the most developed system of risk management, construction inspection and consumer protection in the world.

  In the past two years delegations from the USA, Australia, Japan, China, Israel, South Africa, Spain, Holland and New Zealand have visited us to understand the way we use the latest technology in inspection and claims management to protect consumers and raise the standard of new homes. This model is an area where the UK is a world leader and at the heart of it is the requirement from mortgage lenders that new homes should be protected by a warranty and that new products and systems coming into the market place must meet our criteria and standards. We strongly support the case for increased volumes but equally believe that it should be a requirement of public support and finance for such schemes to be subject to the standard setting, inspection and consumer protection regime that has succeeded to maintain the quality of new homes to date.

  Finally, NHBC is investing significant resources in Customer Satisfaction Survey work, with a view to improving this aspect of the industry's performance

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