Further regulation won’t help solve the housing crisis

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Reflecting on the recent APPG inquiry into the quality and workmanship of new housing in England, Rico Wojtulewicz, Policy Advisor at the House Builders Association argues that more regulation won’t solve the housing crisis

Annually, Britain only builds half the homes it needs and, in some regions, far less than that. Under pressure to solve the housing crisis, people are right to question whether building more homes could impact the quality of new dwellings.

This question has already been asked and, over the last twenty years, building regulations, and the construction industry has evolved to provide the answer.

In 2015, the government concluded the Housing Standards Review which sought to simplify regulation and standards, so that they would be driven by building regulations. This brought accountability for home buyers, a focus on clearer warranties and the Consumer Code for Home Builders. For housebuilders, the review standardised a decade’s worth of regulation bringing up industry standards.

The biggest change in regulation took place on energy efficiency, with both fabric type and construction methods changing. Some modern homes are built to such exacting standards that reports of overheating are on the rise, with air quality becoming a major concern for the industry.

Unfortunately, the reality of changes has not sunk into the political discussion. An All Party Parliamentary Group (APPG) inquiry into the quality and workmanship of new housing in England made some professionals in the industry draw breath. Called ‘More homes, fewer complaints’ the inquiry made ten recommendations that would further improve the relationship between house buyer and house builder.

For members of the HBA, the housebuilding division of the National Federation of Builders (NFB), who are predominantly small and medium-sized enterprises (SMEs), the inquiry did not reflect the reality of working practices. SMEs only stay in business through their high-quality workmanship. They operate regionally, employ locally, and most crucially win work on reputation. They prefer not to sub-contract and recognise that future projects are at risk if complaints arise. SMEs – who are already constrained by land costs, skills shortages, and planning costs – do not look with favour at another levy, especially when the recommendations do not describe the reality.

The reality for SMEs is they must be accountable to the consumer. The Consumer Code adds a layer of resolution, while warranties deliver security. In addition, home buyers using NFB members already have an added channel for resolution.

In contrast to the APPG’s recommendations for consumers, the NFB feels that standardised contracts devalue the high-quality workmanship of our members. Pre-completion inspections and comprehensive packs are already encouraged by NFB members, who suspect that making them mandatory would add another layer of bureaucracy and further burden SME house builders.

Other recommendations by the APPG are mostly centred on the House Builders Federation (HBF) that typically represents volume house builders. However, the NFB would agree with the inquiry on the subject of training, but would recommend a different solution.

Encouraging new entrants and upskilling is paramount. And where better to place them than with locally-employing SMEs, who are the first to implement regulatory changes for building standards?

When Britain built the most number homes, SMEs provided two-thirds of the housing supply. They built for the market, rent, councils, housing associations, individuals and co-operatives. They delivered additionality and stimulated competition. They built the homes Britain needed where Britain needed them.

In 2016, SMEs build only 30% of all homes and supply is at an all-time low, with volume house builders making up the majority of output. The NFB regrets that the APPG’s recommendations did not highlight this fact, as well as exploring which sectors faced which complaints.

The solution is not to further regulate the most regulated industry, but to recognise the existing positives and use them as drivers for industry change. The 2015 Housing Standards Review shows that collaboration can achieve positive industry change and that today’s homes are not the homes of yesterday. Britain can only build more high-quality homes if the entire industry is enabled to take part. And who better than SMEs to build the homes of tomorrow? We don’t need a blunt instrument to solve the housing crisis; we just need more homes.

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Rico Wojtulewicz

Policy Advisor

House Builders Association

Rico.Wojtulewicz@builders.org.uk

www.builders.org.uk/nfb11/about_us/hba.eb

Twitter @nfbuilders

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