1. International Housing Association Private and confidential – Not for publication or distribution State of the Housing Industry: UK 18 February 2016 Lewis Sidnick and Daniel Pearce, NHBC

2. NHBC: our background Raise standards 80% of new UK homes registered with NHBC 1.6 million homes covered Services: Building Control, Environmental Research and Policy Development Private and confidential – Not for publication or distribution

3. Our international work Private and confidential – Not for publication or distribution

4. Contents UK Housing Market Review The Consequences of Rapid Growth Summary and Outlook Private and confidential – Not for publication or distribution UK Government Policy and Media Interest

5. New Build Registrations Leading indicator of house-building activityBased on 80%+ of new homes market Builders pay a fee per home at registrationData widely used as market intelligence Private and confidential – Not for publication or distribution

6. UK housing market - big picture UK RegistrationsChange YOY 2012: 105,174- 10% 2013: 135,257+ 29% 2014: 146,359+ 8% 2015: 156,140+ 7% Region Regions 2014 Regions 2015 Change England127,934135,476+ 6% Wales4,8004,686- 2% Scotland11,13812,755+ 15% Northern Ireland2,4873,223+ 30%

7. Registration volumes Historical Registration Volumes Private and confidential – Not for publication or distribution

8. Registration Volumes Longer-term context – full year registrations Private and confidential – Not for publication or distribution

9. Registration volumes Calendar Year Figures Calendar Year 2014 Calendar Year 2015 % Private110,674118,611+7% Public35,68537,529+5% Total146,359156,140+7% Private and confidential – Not for publication or distribution

10. Registration Volumes Private/Public & Affordable Sector Private and confidential – Not for publication or distribution

11. Registration Volumes Longer-term Trend Private Local authorities Housing associations Mixed economy public/private (54% 1954-80; 59% 1954-90) Largely private sector (84% 1991-2013), market-based 1946194819501952195419561958196019621964196619681970201020121972197419761978198019821984198619881990199219941996199820002002200420062008 400,000 300,000 200,000 100,000 0 Source: DCLG Private and confidential – Not for publication or distribution

12. Registration Volumes Regional Analysis 2015 vs 2014 +15% Scotland 12,755 -13% Yorkshire & the Humber 7,633 +12% East Midlands 13,236 +23% Eastern 16,871 +16% North West 13,568 +30% Northern Ireland (incl. Isle of Man) 3,223 -9% Greater London 25,994 -2% Wales 4,686 +9% South West 15,725 +8% South East 23,149 +9% North East 5,822 +9% West Midlands 13,478 Private and confidential – Not for publication or distribution

13. Registration Volumes Analysis by UK House Type Private and confidential – Not for publication or distribution

14. Registration Volumes Age Profile of New Home Buyers Private and confidential – Not for publication or distribution

15. Balance Optimistic/Pessimistic Registration Volumes Consumer Confidence Index Private and confidential – Not for publication or distribution

16. UK Government policy The Government seeks to increase the supply of new homes. Some of the key figures and policies announced include: One million new homes by 2020; 200,000 new ‘starter’ homes by 2020; Extend Right to Buy to 1.3m housing association tenants; Release public sector land with capacity for 160,000 homes; Double custom and self-build by 2020; Reduce rents by 1% in social housing sector; Help to Buy equity loan scheme extended to 2021; and Support 2,000 homes through Housing Growth Partnership. A national crusade to get homes built.” “ David Cameron Private and confidential – Not for publication or distribution

17. Media and Government Focus on increasing quantity could bring pressure of delivery deadlines and impact quality. All Party Parliamentary Group: “Excellence in the Built Environment” reviewing quality. Report due in Spring 2016. Media interest (both Social and traditional) increasing. Focus on quality. Drop in Customer Satisfaction scores as measured by the Home Builders Federation Britain’s Nightmare New Homes Private and confidential – Not for publication or distribution

18. Consequences of rapid growth Shortage of materials Shortage of skilled labour Pressures of delivery deadlines We’ve been here before! Familiar territory with issues potentially impacting Quality Private and confidential – Not for publication or distribution

19. Summary and Outlook Steady growth to continue Government supports increasing quantity of new homes Continuing growth brings challenges Pressures on construction quality, Media / Government interest NHBC’s focus remains supporting the industry to improve quality Private and confidential – Not for publication or distribution

20. Questions? Private and confidential – Not for publication or distribution