NHBC submission to the Senedd Local Government and Housing Committee: Priorities for the Committee

About NHBC

· NHBC is the leading warranty and insurance provider for new homes in the UK. Our core purpose is to give homeowners confidence in the construction quality of new homes. NHBC sets standards for our warranty and conducts inspections onsite.

· NHBC's ten-year Buildmark warranty covers c70-80% of new homes built in the UK, currently protecting around 1.5 million homes.

· NHBC is a non-profit distributing organisation, with no shareholders, authorised by the PRA and regulated by the PRA and the FCA.

· NHBC does not build or sell homes; it is not a regulator and does not represent any part of the industry. Individual builders are ultimately responsible for the quality of the homes they build and sell to consumers.

· NHBC also provides guidance and training to industry. NHBC delivers approximately 13,500 delegate days of training to the house-building industry per year, as well as offering builders other training opportunities, such as apprenticeships.

· The NHBC Foundation regularly produces high quality research to help the industry and policy makers meet the challenges of the day, and practical guidance to help house buildersdeliver high quality new homes.

Executive Summary

NHBC would suggest the following areas should be priorities for the Committee in the next year, as Wales looks to overcome housing sector challenges as part of its recovery from the pandemic:

Climate Change and Net Zero - it will be important to examine the Welsh Government’s plans to deliver net zero by 2050 in the housing sector.
Modern Methods of Construction (MMC) - the use of MMC systems has the potential to increase productivity and supply but will need to focus on construction quality.
Skills – skills shortages and skills gaps for future roles in housing need to be addressed through high quality training tailored to housebuilders’ needs.

NHBC have unique insight, data and research on these topics, and the housing market more broadly which we would be happy to share with the Committee for its future work programme. For more information on NHBC or our response, please contact NHBC’s Head of Corporate Affairs, Lewis Sidnick

Climate Change and Net Zero

Earlier this year, the Senedd approved a net zero target for 2050, and it will be important to examine the Welsh Government’s plans to deliver this in the housing sector.
NHBC supports the ambition for net zero homes, but we are also firmly focused on ensuring the movement towards net zero does not compromise build quality.
NHBC’s core purpose is to provide confidence in the construction quality of new homes, which is why we became a member of the Future Homes Task Force to ensure quality is a top priority in this policy area.
The Welsh Government has announced plans to double its spending on social housing for rent, spending £250m in 2021-22, as part of its plans to deliver 20,000 new low carbon homes during the current term.
The Government has promised that these homes will be ‘built to bold new quality and environmental standards with the aim for some of the stock to go beyond net zero and produce more energy than they use’.
This will be an important agenda for the committee to follow and scrutinise, especially in relation to build quality. The NHBC Foundation recently produced two reports on the future of home heating and biodiversity in new housing developments.^{^[1]}
The Foundation intends to do more research into this area in the months ahead which we would be happy to share with the Committee.

Modern Methods of Construction

The Welsh Government has set out its intention to increase the use of Modern Methods of Construction (MMC) in housing.
The Welsh Government’s Re-imagining social house building in Wales - A Modern Methods of Construction Strategy for Social Housing Implementation plan (February 2021) sets out an intention to ‘require all our social housing funded schemes to embrace and implement MMC principles’.
While the use of MMC systems has the potential to increase the scale and pace of housebuilding, poorly executed innovation can be a major risk as any potential defect in an MMC system at a factory level could be multiplied across potentially thousands of homes.
It is therefore important that the Welsh Government’s objectives on MMC are focused on delivering high quality homes.
NHBC has always supported innovation in housebuilding, working with industry to help them develop new methods of construction to a high quality standard.
As part of NHBC’s work on MMC, we have worked closely with the Welsh Government to support it in its objectives and help MMC systems used in housing to meet the same expected standards as a traditional build home.
Last year, we launched NHBC Accepts, an end-to-end service that enables high-quality MMC to be fast-tracked for NHBC’s leading warranty, Buildmark.
NHBC Accepts helps to build confidence in MMC. When a system has been accepted, builders, homeowners, lenders, and local authorities can be reassured it can meet our standards.
We have currently accepted 28 MMC systems onto NHBC Accepts and our ambitions are to continue to expand on this so that more MMC can be used in housebuilding to increase housing supply while retaining high construction quality.
We would be very happy to share our experiences working with MMC manufacturers and builders with the committee if that would be helpful.

Skills

Skills remain a longstanding issue for the housing sector which the committee should explore further.
The Welsh Government’s commitment to reform post-16 education and training is a step in the right direction, but the already significant skills shortages in construction pose a significant challenge to the sector and Government.
Research by the NHBC Foundation has found that ‘over-reliance on an ageing male workforce is pervasive in house-building, particularly in site-based and management roles’ and identified a range of solutions, including tackling diversity issues, targeted recruitment, community outreach and awareness raising.[2]
The existing skills crisis will be compounded by future skills gaps as the demand for installing and maintaining low carbon technologies in homes increases. This could risk the Government’s wider ambition to build 20,000 new low carbon homes.
It is important that training and apprenticeships are tailored to specific sector needs, rather than focused on pan-construction activities. For example, bricklaying training provided by many providers is generic and not focused on housebuilders’ needs.
Traditional college term time and day release leads to long programmes that struggle to retain apprentices through to completion and do not meet the flexibility demands of builders.
NHBC expertise and experience informs the industry, and our training raises standards to help builders to produce better quality homes.
NHBC delivers approximately 17,000 delegate days of training to the house-building industry per year, as well as offering builders other training opportunities, such as apprenticeships.
The nature of cross-border working in the house-building sector can create challenges to accessing apprenticeship funding; for example, an apprentice might be employed at sites in both England and Wales throughout their apprenticeship, or work for an English company, but be based in Wales.