The housebuilders that are performing on sustainability don’t wait for regulation to drive them

Chris Tinker

The recent NextGeneration report into the UK homebuilding sector’s contribution to a sustainable future confirms that the industry generally, and the Next Generation membership in particular, continue to make great strides in delivering sustainable development outcomes. This is the only independent industry wide benchmark and enables homebuilders, government and investors alike to understand the sustainability of homebuilders’ operations and the new homes they build across 250 separate criteria.

The Berkeley Group and Crest Nicholson continue to lead the benchmark with Miller Homes and Willmott Dixon in hot pursuit. Three of the top ten performers are private companies, showing that high levels of performance are not solely the province of listed firms with their higher public reporting standards.

The publication of the benchmark comes at a significant time. While the government indicates that it remains committed to the 2016 timeline for zero carbon new housing, the route map towards this milestone is unclear. The boardrooms of all homebuilders would be entitled to question just how realistic and serious the target is. Likewise, as more public sector land comes to market it will be interesting to see the balance in the selection criteria between the price offered for the land, and the quality and sustainability ambitions of a bidder’s proposals. 

If the industry is to move to zero carbon housing by 2016 there needs to be a significant step change in both the technical design of homes and the depth and sophistication of the supply chain

Indeed, any word search into several of the government’s latest consultations (the housing standards and allowable solution reviews included) would show that the words “sustainability” and “quality” feature little. There does seem to be a fear in the heart of government that quality, environmentally sustainable homes could be too big an ask at this point in the economic cycle, when the need to secure increased housing output and economic growth is to the fore.

To the industry generally there is merit in simplifying the regulatory framework. Winding down the Code for Sustainable Homes for example, and integrating the associated standards into Building Regulations, potentially has considerable advantages but this should not in itself be allowed to result in a lowering of the associated standards. Indeed, if the industry is to move to zero carbon housing by 2016 there needs to be a significant step change in both the technical design of homes and the depth and sophistication of the supply chain.

The NextGeneration benchmark doesn’t just focus on environmental sustainability however. It examines the strategies and governance of the top 25 homebuilders and the broader social and financial measures of sustainability which identify those companies which deliver high quality, well designed communities where people want to live, and which support more sustainable lifestyles. After many years of hard work in this area, it was particularly pleasing that Crest Nicholson headed this part of the benchmark.

It is no coincidence that at the launch of the benchmark, senior representatives from Legal and General, one of the largest investors in the UK housebuilding sector and who look for sustainable business models which add growth over the longer term, confirmed that they are major investors in three of the top four performing companies. There is indeed a growing recognition of the link between companies who are committed to high levels of quality and sustainability and those who deliver strong and sustainable business returns. Accordingly, despite a less than certain regulatory framework, leading companies continue to gain advantage by integrating sustainability into their business strategies. Tellingly then, in order to have an impact it would seem that leading strategies need to be developed first in the boardroom, and not simply through responding to regulatory pressures.

Chris Tinker is executive board director and regeneration chairman at Crest Nicholson