HBF Parliamentary Newsletter – Spring 2022

Thu 28 April, 2022

Introduction

In this Parliamentary Newsletter, we update you on our work to progress the many ongoing and new challenges affecting the home building industry as well as our members’ work to sustain recent housing supply increases while tackling major business, regulatory and social change.

We hope you find it a useful update on the home building industry’s activities and priorities but if you have any questions or would like to discuss to an issue in more detail, please get in touch

About HBF

The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. Our members are responsible for providing around 80% of all new private homes built in England and Wales and most of our members are small or medium-sized enterprises.


HBF’s work with the government on building safety

Since the Government's announcement of its new approach to building safety on 10 January, HBF and its members have engaged constructively with ministers and officials to agree a way forward. HBF and its members have always maintained that leaseholders should not be left to fund remediation programmes necessitated as a result of building regulation failures.

Following detailed negotiations since the start of 2022, HBF and DLUHC recently came to an agreed pledge and accompanying principles. The pledge commits signatories to:

  • Take responsibility for performing or otherwise funding self-remediation works to address life-critical fire-safety issues on buildings over 11 metres in England that they have developed since 1992
  • Ensure that no building they have developed in the past 30 years receives funding from the Building Safety Fund or similar schemes, and if any have, to reimburse the funds

This negotiation is a significant development in our collective efforts to solve the building safety crisis and demonstrates developers’ commitment to play their part in the solution. The UK home building industry is the only industry to have voluntarily committed funding for historic building safety works and is now the only industry to have entered into official negotiations with the government on this issue. The pledge brings the total committed by national house builders on self-remediation to over £2 billion. This is on top of the Residential Property Developer Tax (RPDT), which is expected to raise up to £3bn over the next 10 years. This new 4% surcharge on Corporation Tax for house builders was consulted on during 2021 and became payable by dozens of the largest UK house builders from 1 April.

All of HBF’s communications with the government regarding building safety can be read here.

While the pledge will see all the buildings developed by signatory UK builders in the past 30 years remediated, this only covers a minority of the total affected buildings. Government now plans to introduce a new Building Safety Levy on all new development in England to fund remediation of older buildings and buildings that have been developed by overseas developers, other developers such as the large landowner developers in London and those blocks which were built in the decades before the 1990s.

This levy will affect all UK home builders, including small and medium-sized firms, and is on top of funding already spent or committed through the pledge and RPDT.

The continued extraction of funds from the industry, whilst other responsible industries, overseas developers and wider property sector actors do not contribute, will have far reaching impacts on the viability of businesses, on investment in future housing delivery, particularly Affordable Housing, and on the estimated 800,000 jobs sustained and supported by the home building industry.

Recent research by WPI Strategy has suggested that another new levy on UK house builders could lead to 56,000 fewer affordable homes being completed over the next 10 years.

We continue to work closely with our members, ministers, and officials at DLUHC and we will keep Parliamentarians updated on the progress made. Further information, including our correspondence with the Housing Secretary, can be found here. If you would like to discuss anything related to building safety in more detail, please contact HBF’s Policy Director, David O’Leary, david.oleary@hbf.co.uk.

Home builders continue to improve new home quality in latest Customer Satisfaction Survey – 2022 results

The latest industry Customer Satisfaction Survey (CSS) results have found that found that homeowner satisfaction with new build homes is continuing to increase and reflects the great efforts home builders have made to improve new home quality and customer service over the last few years. The survey results show that 91% of new build home buyers would ‘recommend their builder to a friend’, the joint highest score since the survey began in 2006 and another successive year of improvement since 2016. 91% of those surveyed also said they would buy a new build home again, with 87% saying they would buy from their same builder again in the future.

The annual survey is one of the most comprehensive, large-scale surveys of its type carried out in the UK. It began in response to recommendations in the Barker Review of Housing Supply in 2004. This year around 100,000 survey were sent out and since its launch, close to one million survey returns have been received making it one of the most comprehensive continuous industry research exercises in the country.

Build quality and customer service have been a major focus for industry in recent years following an unacceptable drop in satisfaction levels around 2017. Since then, the industry has worked hard to improve satisfaction levels by focussing on the quality of homes built and also the service they provide to customers.

Other notable findings from the CSS include:

  • 83% of respondents were satisfied that their home was completed on time, and 89% said they were satisfied with the quality of their home. This despite the fact that, for much of the time period for this survey, the construction of homes will have been impacted by site closures, social distancing and employee absenteism due to the pandemic.
  • 85% said they were satisfied with the service provided by the builder during the buying process and 83% said that they were satisfied with the service provided by the builder have they had moved in.
  • 95% of respondents said they had reported snags to their builder since move in, and 72% said the number of snags was in line with or less than what they had expected. The majority of snags will have been minor problems and new build buyers are encouraged to report these to their builder.

The industry has also been supporting the work of the New Homes Quality Board and its development of a new, more stringent code of practice, The New Homes Quality Code, a draft of which was published last year following a public consultaiton. Once introduced, the new code will fill the gaps in current protections and ensure that every aspect of a new home purchase, from when a customer walks into a sales office, through to two years after the purchase of the home is covered.

The NHQB is also in the process of introducing a New Homes Ombudsman Service (NHOS), in line with commitments made by Government. The NHOS will enforce the New Homes Quality Code and provide independent redress in the event a customer has issues with their new home that cannot be resolved directly with the developer. As these new arrangements are implemented over the coming year, they will drive further improvements in new build quality and significantly strengthen consumer redress.

The NHQB has also appointed a new independent top team as it moves into its full operational stage, ahead of the New Homes Ombudsman Service launching to developers and consumers by the Summer. The new CEO is now Leon Livermore. Leon formerly led the Chartered Trading Standards Institute (CTSI) as Chief Executive for eight years. Rob Brighouse been appointed as Chair, replacing Natalie Elphicke.

NHQB’s board has been further bolstered with the appointment of three more independent non-executive directors: Naomi Connell, Curtis Juman and Paul Price. More on these appointments can be read here.

The CSS results for participating developers can be read in full here.

HBF report: Buyers of new build homes save £112 million and cut UK carbon emissions by over 500,000 tonnes per year

A report published by HBF analysing government data has found that buyers of new build homes are saving more than £400 per household on their energy bills and collectively doing their bit to reduce the country’s carbon emissions with almost 600,000 tonnes less carbon emitted than if last year’s new build homebuyers had chosen to purchase an older, less efficient property.

With energy bills set to rise by more than 50% from the end of next month, the benefits of a highly energy efficient new home have never been more important, but as well as saving homeowners on monthly bills, buyers of new homes can proudly say that on average their home produces just a third of the annual carbon emissions produced by older properties – preventing 2.4 tonnes of carbon each year for every household.

The report – ‘Greener, Cleaner, Cheaper’ – finds that:

  • Owners of new build houses and flats will save homeowners an average of £435 a year, rising to £555 for new build houses alone
  • The average new build home emits 2.38 tonnes less of carbon each year.
  • The research shows that despite new build homes being, on average, 7.4% larger than older properties, new homebuyers are still generating valuable savings every month

With more lenders beginning to offer green mortgages – such as lower interest rates for buyers of more energy efficient homes – and stricter requirements for landlords renting out domestic properties, home builders are urging lenders to go further, faster to assist homebuyers in making the right environmental choice. Despite the considerable differentials in the cost of heating new build homes compared with older properties and the increasing percentage of monthly running costs that energy now represents, most mortgage affordability calculations presume a single national average energy bill across all types of home regardless of its efficiency.

The report can be read in full here.

The economic cost of the nutrient neutrality delays

Following the recent publication of Environment Secretary, George Eustice’s, written ministerial statement and subsequent action by Natural England that brings an additional 42 local authorities into the nutrient neutrality requirements, HBF published a report looking at the economic cost of housing delays due to these requirements.

The analysis in this report highlights the contribution that house building makes to supporting both employment and the economies of the study areas. As well as contributing directly to local economies via the industry’s economic output, house builders are responsible for supporting the direct and indirect employment of a significant amount of workers. House builders also contribute in many other ways to local economies through council tax revenue, Section 106 and Community Infrastructure Levy contributions, and the delivery of affordable housing.

The report finds that a 10% or 50% reduction in the number houses being delivered across the seven catchment areas would equate to a reduction in between 2,540 and 12,700 new homes being built each year. This would have the potential to result in:

  1. An annual reduction of between £442 million and over £2 billion economic output produced by builders, their contractors and extensive local and regional supply chains
  2. A reduced opportunity to create or support between 8,100 and 40,560, indirect, and induced jobs per annum.
  3. A loss of between £3m and £15m in potential Council Tax revenue per annum.
  4. A loss of between £17m and £85m in New Homes Bonus payments each year.
  5. A missed opportunity to invest between £12mand £60m in essential infrastructure collected from Section 106 and CIL contributions per annum.
  6. The loss of affordable housing delivery valued at between £48.8 million and £244.2 million per annum.

HBF is working closely with the relevant departments to try to find a more proportionate solution to nutrient neutrality issues. The report can be read in full here.

Home builders celebrate 2022 International Women’s Day

In celebration of International Women’s Day (IWD) on 8 March, HBF and its members participated in a range of activities to illustrate the work the home building industry is doing to increase the diversity and inclusiveness of its workforce.

Home builders are fully aware of the importance, and benefits, of establishing a more diverse workforce, particularly in the drive to increase housing delivery to 300,000 homes per year. Achieving this will require an extensive and varied mix of skills and so it is pivotal we continue to attract and develop a broad range of talent within the industry.

One of the ways developers are doing this is by supporting routes into the sector for women and ensuring that there are programmes and mentoring schemes available to help them progress. As part of IWD, home builders highlighted several of the specific measures they have initiated, including:

  • Bringing additional female apprentices or technical trainees into construction-related roles
  • Raising the profile of inspirational women within the industry
  • Launching diversity and inclusion e-learning modules for employees
  • Establishing diversity and inclusion working groups
  • Promoting Remote Mentoring programmes

Further information on each of these initiatives, including case studies, can be found here: www.hbf.co.uk/WIH.

HBF is also developing plans for a Parliamentary reception to further showcase the variety of roles available in the industry and to demonstrate that there are careers for people of all backgrounds and talents. If you would like further information, or to discuss these issues in more detail, please contact emma.ramell@hbf.co.uk.

For more information, please contact:

Emma Ramell, Policy and Public Affairs Manager, emma.ramell@hbf.co.uk

Laura Markus, Policy and Public Affairs Advisor, laura.markus@hbf.co.uk.

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