Influencing quality through quality control and assurance

"By sharing insights and partnering with builders, NHBC has significantly enhanced build quality in the new home sector," said senior construction quality manager Marc Separovic at GIRI's members' meeting. "However, there's still scope for further improvements, and we believe implementing our recent R&D into quality assurance industry-wide will further drive advancements and create a new optimal efficiency.”

NHBC acts to influence change in the home-building sector through its standards and builder rules, to which customers must adhere to achieve the 10-year structural warranty required by mortgage lenders, said Marc. “Without this warranty from NHBC or another provider, builders can only sell to cash buyers.” 

At any one time, NHBC covers around 1.5 million homes through its policy. It is a non-profit company, and all money made is put back into driving quality or increasing its insurance reserves. “We have 1,300 employees, 10,000 registered builders and our quality control operation covers just over one million inspections a year, each one touching the property no less than five times at key build milestones.” 

Quality overview

These inspections, combined with other metrics such as registrations, construction quality reviews, homeowner surveys, and claims provide a wealth of data that can be analysed to provide deep insights into how the sector is performing.  

“We have a good overall view of quality within housebuilding at an industry level and from a UK regional perspective. This is a powerful tool. We can show customers how they rank against their peers, and we can look at their performance at a group level or by business unit, ranking these against each other in terms of performance right down to site level. We create bespoke customer engagement plans to drive quality, acting as partners with our builders to achieve this.” 

Marc said that NHBC has been on a drive to improve quality since 2012, a year that saw claims peak at 8.3 per 1,000 plots on cover. This figure saw year-on-year improvements (barring 2014) until 2017, when it plateaued for a couple of years. Lockdowns in 2020 caused an increase in claims, then it started to fall again. “Our best year to date was 2022, when claims dropped to 2.3 per 1,000 plots on cover. We have seen attritional claims for things like roofs, walls, and water penetration drop massively through the changes we have made to risk management.” 

As an example, he highlighted a campaign around basements. “We had never looked at basements on their own, so we did a deep dive to understand the scale of the risk. Where we had foundations failing at a certain rate, we found basements were failing at a rate a hundred times higher. So we got a cross-industry group together and agreed a change in the NHBC standard. Now we require a dual system. If you put in watertight concrete, we also require a drain cavity system. After we introduced this, we had five years of zero claims on basements in new builds. This is the kind of change we can make from a strategic perspective.”  

Construction quality reviews

In 2016, NHBC introduced construction quality reviews, which Marc describes as a game-changer. In addition to the warranty, builders can pay for NHBC to do a deep dive into quality on a site over 38 build stages and eight build sections. “We cover around 4,000 sites per year. We record text summaries of each stage, take photographs, and score everything. The data is then analysed to provide powerful insights to our customers.” 

Each stage is scored between one and six. Anything less than four is non-compliant. “In 2016, we had about 50% compliance. So we worked closely with partners through engagement plans to drive this up to around 90% in 2023. Which sounds good until you compare it to other industries.” 

A 90% compliance rate is equivalent to a defect rate of 100,000 parts per million. In the automative sector, the defect rate is just 20PPM. In electronics, it’s 1,000PPM. “We might be on an upward trajectory, but there is still lots of scope to improve. A new house is the most expensive thing you will ever buy. You don’t expect to buy a new car and have parts start to fail after a few weeks. We shouldn’t expect this to happen on a home.” 

Continuous improvement

NHBC has developed a quality assurance framework for the sector to continue to drive up quality as well as a continuous improvement programme. Marc explained that both are practical tools designed to help builders conduct quality assurance. The continuous improvement programme is based on the 6 Sigma approach and provides seven specialised tools for house builders. “We’ve validated this with a builder, applying it to the problematic area of front doors, and the builder worked out that during the first year of making the QA changes they would save £1 million within their operation.” 

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