No amount of marketing ingenuity would help a house-builder sell a home with no bathroom and toilet, let alone no electricity. Water and electricity connections are vital to selling homes, and both are in short supply.
With the former, the problem is to do with water companies 鈥� also responsible for sewerage 鈥� failing to adequately invest in wastewater infrastructure, according to the Home Builders Federation (HBF).
The position with electricity is a little different, as even when new power infrastructure is built, demand from burgeoning data centres and the increased use of electric cars takes a large proportion of it.
Water companies are in theory required to provide wastewater connections to new homes. But if they cannot or will not, local authorities (presumably fearing the consequences of unconnected bathrooms) have started to impose planning conditions that homes cannot be occupied until the connections are in place.
And since unconnected homes cannot be sold, this situation further jeopardises the government鈥檚 1.5m new homes target, already looking increasingly unachievable. But if Whitehall is criticising the water companies about it, this is happening very quietly.
The problem has become bad enough for the HBF to publish a highly critical report based on the results of a member survey that found at least 80 developments delayed by wastewater issues.
This is despite the fact that water companies have received almost 拢2.3bn from developers via infrastructure and other charges over the past five years.
According to the report, entitled A Drain on the Nation, these 80 developments comprise nearly 30,000 homes of which some 7,000 are designated as 鈥榓ffordable鈥�.
Things are at their worst in Anglian Water鈥檚 area, with 14,500 homes delayed. Around 7,000 new homes are affected in the Thames Water area.
The HBF wants the government to reassert paragraph 201 of the National Planning Policy Framework (NPPF), concerning land use and pollution, 鈥渢o urgently remind local planning authorities that questions relating to wastewater should not intrude into development management decisions鈥� These are strategic planning matters that can only be addressed properly by sewerage undertakers when preparing their strategic water resource management plans and wastewater infrastructure plans.鈥�
The HBF also wants ministers to remind local authorities that water companies have a statutory duty to meet the requirements of the land use planning system and that homebuilders pay charges towards this:
鈥淎t the very least, questions relating to wastewater capacity should be considered when the strategic or local plan is being prepared, and if there are doubts about the ability of the sewerage undertaker to support the delivery of the homes required, then the problem should be identified and resolved then, before the strategic or local plan is adopted.鈥�
Regulator Ofwat has also become embroiled in the wastewater infrastructure dispute, where it says the HBF has misunderstood the funding mechanisms.
Ofwat says developers pay connection fees to cover the on-site costs and infrastructure charges 鈥� an average charge per property, per service connected 鈥� which funds the pipelines, pumping stations and other connections to the water network.
But the regulator says these charges do not pay for strategic assets like reservoirs or treatment capacity, the costs of which are met through customers鈥� bills, not from contributions by developers.
Ofwat says its 2024 price review will bring an unprecedented package of investment during the 2025-30 period, driven by regulatory requirements.
Whoever ultimately pays, the infrastructure simply isn鈥檛 there. Rhodri Williams, HBF technical director, explains: 鈥淚t is technically unlawful, as the water companies are obliged to provide new connections and the HBF has asked government to remind them of this, and the government recognises the problem.鈥�
Williams says there has been a steady decline in investment by water companies in new connections, even though they are obliged by the Water Act 1991 to provide these.
鈥淭here is supposed to be a 25-year outlook, updated every five years, so that water companies know where new homes will go and can plan connections,鈥� says Williams.
聽鈥淏ut they are not doing that and then they object to new homes on the basis that their infrastructure can鈥檛 cope. And local planning authorities are increasingly accepting that argument.鈥�
He says this is a consequence of water companies having not invested as they should have since being privatised in the early 1990s. The result is that now their infrastructure is not coping.
Brian Berry, chief executive of the Federation of Master Builders (FMB), says: 鈥淚t鈥檚 another example of government not having got a grip on the water industry.
鈥淚 can see why our members would be concerned because pretty much any new housing could be affected by this.
鈥淚f the government wants to meet its target of 1.5m new homes it will need ministers to make sure the utilities are playing their part in making that possible.鈥�
The water industry at least agrees that there is a problem 鈥� although it blames the 鈥榮ystem鈥�, not the water companies themselves. A spokesperson for trade body Water UK says: 鈥淔or too long, a flawed regulatory framework has restricted long-term investment in resilience, leaving parts of the country without the infrastructure needed to support growth.
鈥淲ater companies fully support the delivery of new homes and businesses and will deliver record levels of investment over the next five years to strengthen water and wastewater networks. But the current system is not set up to deliver upgrades at the pace required.
鈥淲e urgently need regulatory and planning reforms to enable water companies to invest at pace to provide the capacity essential for new developments.鈥�
A spokesperson for Thames Water said: 鈥淚t is important to remember that we鈥檙e not statutory consultees for individual planning applications but when consulted [we] will assess the potential impact that new developments could have on water and/or wastewater services.
鈥淲e look at each development case-by-case聽 and where needed will request that conditions are added to planning applications to ensure we can supply new developments with the water that they require and also prevent developments from increasing flood risk or contributing to unacceptable levels of water pollution.鈥�
Thames Water says it works with developers and planning authorities to ensure water and sewerage infrastructure can support growth, and determine where upgrades are needed to accommodate new developments.
Once homes are built, Thames Water has a responsibility to provide adequate water and wastewater services and may ask for conditions attached to planning consents so new homes are not occupied until infrastructure upgrades have taken place.
But the company says that where possible it will agree a phasing arrangement so an agreed number of properties can be occupied before any upgrade.
One example of contention between a council, builder and water firm came at Wealden District Council last March.
In 2022, a planning appeal allowed for 38 new homes at Horam, but Southern Water said it could not cope with the foul drainage from the houses without an upgrade. A condition was imposed meaning homes could not be occupied until works were completed.
Southern Water then decided developments of up to 50 houses would not cause any flooding or spillage issues and developer Chailey Homes asked Wealden District Council to remove the condition.聽
The council refused and a planning inspector rejected Chailey鈥檚 appeal saying the council was entitled to impose conditions if there was evidence that foul drainage works were necessary.
The planning inspector added that Southern Water鈥檚 changed stance 鈥渟eems illogical [in claiming] that additional inputs would have no consequence to outflows of foul water when the system is overwhelmed by rainfall鈥�.
Wastewater infrastructure problems are not confined to housing stress areas in southern England. A row has also erupted in Northern Ireland.
Build Homes NI, which represents developers in the region, says: 鈥淥ur wastewater system isn鈥檛 fit for purpose and it鈥檚 becoming impossible across ever larger parts of Northern Ireland to make new connections to the system. No new connections mean no new homes.
鈥淭hanks to wastewater capacity constraints 19,000 homes in Northern Ireland cannot proceed. The effective moratorium on house building across many parts of Northern Ireland is causing house prices to rise faster than in many other parts of the UK. This is unsustainable and should be unacceptable in any modern society.鈥�
Some limited progress was made recently, with NI Legislative Assembly infrastructure minister Liz Kimmins鈥� announcement in July of 拢1m towards wastewater capacity. She says this money should enable the construction of some 3,000 homes in the Derry-Londonderry area.
Kimmins says that since autumn 2024 wastewater capacity had been unlocked to enable connections for almost 5,000 new homes.
Given that the problem of inadequate utility connections has been allowed to develop to this extent, one might wonder if the government was ever aware that a lack of wastewater infrastructure poses a threat to its house-building target 鈥� in which it has invested rather a lot of political capital.
In response to this suggestion, a government spokesperson says: 鈥淭he government is taking decisive action to revolutionise the water industry through a record 拢104bn investment and fix the planning system so we can deliver 1.5 million homes as part of our Plan for Change.
鈥淲e are clear that development should not be blocked if the right water infrastructure is in place, which is why we expect councils and water companies to work together on this issue so we can turn the tide on the housing crisis we have inherited.鈥�
Whitehall is also promoting the construction of nine new reservoirs, to protect water supplies, and promises tougher regulation for the water sector which it believes will 鈥渞evolutionise the water industry in the biggest overhaul of the sector since privatisation鈥�, with a Water Reform Bill due.
Responding to parliamentary debate on housing development and water companies, housing and planning minister Matthew Pennycook said: 鈥淭he government are acutely aware that the sustainable supply of water in some areas 鈥� for example Cambridge and north Sussex 鈥� is an immediate constraint on growth and we are tackling that in various ways.
聽鈥淔or example, in those instances, we work closely with local authorities, regulators and water companies to find creative solutions to unlock growth and address environmental pressures.鈥�
New housing secretary Steve Reed, while not mentioning water directly, promised nothing less than 鈥渁 call to arms鈥� for house-builders with 鈥渕ajor planning reform and investment [to] break down the barriers to development and build the 1.5 million homes this country needs as part of our Plan for Change.鈥�
The government has so much emphasised its house-building target that it will be seriously embarrassed if it isn鈥檛 met 鈥� and even more so if this is because it failed to ensure water companies built enough sewers.
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