As part of the CIOB’s Client Strategy, CIOB Chief Executive Dr Victoria Hills chaired a roundtable during the recent UKREIIF in Leeds to discuss the performance gap in housing. Once understood as merely a measure of the differences between predicted and actual energy use, heat loss and carbon emissions, the scope of the performance gap has steadily expanded over that past decade to the point where it’s now at the heart of housing policy. 

Indeed, for the housing clients at the roundtable, particularly registered providers and local authorities, operational performance has become inseparable from a much wider set of pressures: building safety remediation, decarbonisation, resident affordability, asset management, procurement risk, skills shortages and long-term maintenance liabilities. Whereas housing associations would once simply buy completed buildings, they now understand that they are taking responsibility for, as one developer participant put it, “30 years of consequences”.

Numerous factors account for this shift. The financial and operational burden attached to owning and managing housing has increased dramatically. The Building Safety Act and associated regulatory reforms have fundamentally altered expectations around accountability, competence and risk management, particularly for higher-risk residential buildings. Landlords are facing major investment requirements associated with fire remediation, damp and mould, ageing stock, EPC improvement programmes and net zero targets.

Alongside this, construction inflation over recent years has sharply increased development costs. Several participants pointed to the Home Builder’s Federation report suggesting that the cost of delivering a new home has risen by around £76,000 since 2020, and yet sales values and affordable housing grant assumptions have not increased at the same rate.

All of this is creating a growing tension at the heart of housing policy. The government’s ambition to accelerate housebuilding, including the target of delivering 1.5 million homes during this parliament, sits alongside a regulatory and economic environment that is making development increasingly difficult to fund and deliver. Registered providers in particular now struggle to balance competing demands to build new homes while simultaneously upgrading, remediating and maintaining existing stock on finite capital resources.

Several participants described the resulting strain in stark terms. Fire safety programmes, decarbonisation works and stock investment requirements are consuming substantial organisational capacity and borrowing headroom. At the same time, local authorities continue to face escalating temporary accommodation costs driven by chronic housing shortages and rising homelessness pressures.

Interestingly, none of the participants argued against regulation or higher standards. Indeed, they broadly accepted the underlying objectives of safer homes, lower carbon emissions, lower running costs and better outcomes for residents.

The frustration came instead from the cumulative effect of overlapping requirements, uncertain implementation timetables, and fragmented funding mechanisms. Participants repeatedly returned to the difficulty of planning long-term investment against a backdrop of changing policy signals and layers of regulatory complexity. This includes transient funding programmes, uncertain timelines, and evolving technical requirements, all resulting in changing procurement risks.

The Future Homes Standard (FHS) loomed particularly large in the discussion. Several participants expressed concern about not just simple compliance costs but the scale of the transition now facing the industry and the lack of clarity around implementation.

As things stand, the FHS will force a deep change in how housing is designed, procured and delivered. Moving from gas-based heating systems to low-temperature heating fundamentally changes the relationship between building fabric and building services. 

Historically, many defects in insulation, airtightness or detailing were masked by oversized gas boilers operating at high flow temperatures. Buildings might not perform particularly efficiently, but they could usually still be heated to a comfortable temperature.

Several participants argued that this is no longer the case. Low-temperature systems such as heat pumps are far less forgiving of poor fabric performance, weak commissioning or installation defects. If insulation continuity is poor, if airtightness membranes are damaged, or if systems are incorrectly commissioned, residents can’t compensate by simply turning up the heat. 

The transition to low-carbon housing is exposing weaknesses in construction quality and delivery culture that older systems often concealed. Those involved in the delivery of housing will either give this aspect of the performance gap close attention or risk, as a participant involved in implementing the FHS put it bluntly, “getting their bottom bitten”. 

Several participants argued that too much of the industry is treating the FHS primarily as a specification change: replacing gas boilers with heat pumps, increasing PV provision or adjusting compliance calculations. In reality, the transition will require a much more integrated approach linking concept design, detailing, construction quality, commissioning and resident understanding. This has major implications for procurement, skills and quality assurance.

Several participants argued that the sector has not yet fully absorbed the scale of this delivery challenge. One developer specialising in highly energy-efficient housing explained that the technical principles themselves are relatively well understood. The challenge lies in delivering those standards consistently and at scale across complex supply chains and fragmented labour markets. 

He gave the example of airtightness testing. Achieving strong airtightness performance is technically achievable, but maintaining integrity through the construction process requires sustained coordination across multiple trades. Even relatively minor interventions on site can undermine overall performance if sequencing and supervision are poor.

Participants also discussed the growing debate around communal heat networks and ultra-low-energy homes. Emerging heat network zoning policy may, in some areas, require homes to connect to district heating networks under the Energy Act 2023, alongside existing planning policy mechanisms that already encourage or expect connection in some locations. Some developers are now questioning whether highly efficient buildings with very low heat demand should do so automatically. In certain cases, they argued, the embodied carbon, operational costs, maintenance implications and service charges associated with heat networks may no longer represent the best overall outcome.

Although not yet an industry consensus, this point illustrates how rapidly assumptions are shifting as operational performance becomes more central to development decisions.

These technical debates have direct implications for residents, affecting affordability and trust. Several contributors pointed out that residents are increasingly sensitive to running costs, overheating, maintenance standards and operational reliability. As energy prices have risen and public awareness of housing quality has grown, operational performance has become much more visible politically and socially. Inevitably, that is changing the expectations placed on housing providers.

One participant described how they had feared that, because underfloor heating systems connected to district heat networks behaved differently to conventional radiator-based systems, residents would struggle with them. With proper support and education, however, she received almost no complaints from residents. The point was that successfully introducing technological change requires communication, management and long-term operational support.

This theme surfaced repeatedly throughout the discussion: delivering high-performing homes increasingly requires housing providers, contractors and supply chains to think beyond practical completion. Resident engagement, asset management capability and post-occupancy understanding are becoming part of the performance challenge itself.

Participants reported that skills shortages add another layer of difficulty. They noted that housing has to compete with other more attractive and lucrative sectors – infrastructure projects and data centres were mentioned – for skilled labour and technical expertise. At the same time, colleges and training providers face their own recruitment difficulties because experienced professionals can often command significantly higher salaries elsewhere in the industry.

Several participants warned that the gap between regulatory ambition and practical delivery capability was widening. The issue is not only the availability of labour, but the availability of labour capable of delivering the precision now required by modern building standards.

Collaboration emerged as another strong theme throughout the roundtable. Participants repeatedly called for earlier contractor involvement, clearer client requirements, more integrated procurement models and more stable long-term policy frameworks. Some argued that the industry’s traditional fragmented delivery structures are becoming ever less suited to the demands now being placed on housing projects.

While some warned against the dangers of shutting down routes to innovation, others called for greater standardisation and consistency from government, particularly around technical requirements and implementation pathways. One even called for a coherent national delivery framework for housing akin that seen in the schools sector, where central government plays a stronger role in setting standards, defining outcomes and shaping procurement and delivery models. Overall, there was frustration that frequent policy changes and overlapping regulatory expectations can make long-term investment planning difficult.

Underlying many of the concerns raised by participants was a broader sense that housing policy has become increasingly fragmented over recent years. Fire safety, decarbonisation, planning reform, retrofit, infrastructure constraints, skills policy and temporary accommodation pressures are often treated as separate problems within separate systems, and yet housing clients experience them simultaneously and cumulatively … and risk being overwhelmed.

The performance gap in housing extends beyond energy targets to a much wider question about whether the sector has the funding structures, delivery models, regulatory stability and technical capability needed to provide homes that remain safe, affordable and resilient over decades of occupation.

Many of the technical solutions already exist. The challenge is whether the sector has the coordination, skills, procurement models and policy stability needed to deliver them consistently and at scale.

The roundtable was conducted under the Chatham House rule to encourage an open and frank discussion. CIOB is grateful to all participants for generously sharing their time, experience and insights.