Understanding NAVs: A Vital Tool for House Builders in the UK

As a house builder or property developer, every step in the construction process requires diligent attention. However, New Appointments and Variations (NAVs) are a crucial element often overlooked. We aim to delve into the complexities of NAVs, and their significance and elucidate why house builders need to be well-informed about them.

What Exactly Are New Appointments and Variations (NAVs)?

New Appointments and Variations, colloquially known as NAVs, are mechanisms meticulously crafted by the Water Services Regulation Authority, OFWAT, in the UK. This regulatory body devised NAVs to engender competition within England and Wales’s water and wastewater market. 

The system permits alternative water companies, or NAV companies, to supply water and sewage services to regions traditionally catered to by well-established water companies.

NAVs function on the foundational principle of appointment and variation. A NAV company can earn an appointment to provide water and wastewater services for a new development yet to connect to an existing water company’s network. This is known as a New Appointment. 

On the other hand, they can also assume responsibility for services from an existing water company if they can prove their ability to offer superior services or prices. This latter process is referred to as a Variation.

Understanding the Dynamics of a NAV Company: What are Their Role and Benefit?

To understand the crucial role and benefit a NAV company can bring to a house building project, it is crucial first to delve into the nature of their operations. A NAV company operates as a private entity, delivering water and wastewater services to designated geographic regions. At its core, these companies serve as alternative providers to long-established water companies, stepping into the domain traditionally monopolised by incumbent water utilities.

The stringent regulatory oversight by OFWAT ensures that NAV companies, much like their traditional counterparts, uphold similar service, environmental, and water quality standards. Their operation goes under the microscope to ensure they maintain a service level that consumers have come to expect from their water service providers. This regulatory aspect imbues a sense of security and reliability, letting consumers and house builders know that the water services offered meet the same high standards regardless of the provider.

A NAV company can bring several key benefits to house builders, including:

Cost Savings and Efficiencies 

One of the core advantages that make NAV companies an attractive option for developers lies in the potential for substantial cost savings and improved efficiencies. NAVs, by concentrating on specific geographic areas or customer categories, are often in a position to propose more competitive pricing structures than conventional water authorities. 

This focus enables them to optimise efficiencies, and, in turn, they can pass on some of these savings to the developers. It’s the NAVs’ capacity to purchase the assets at competitive rates that enable them to offer such financial benefits. Ultimately, this means that the utilities cost for the overall development can be significantly cheaper.

Flexibility and Innovation

NAV companies are renowned for their flexibility and innovative approach, traits born out of the competitive nature of their existence. Unlike larger, more traditional entities, NAV companies are generally more agile, able to adapt their services and respond more swiftly to changing circumstances or unique development requirements. Their ability to pivot and innovate can be a significant advantage, particularly in the dynamic property development environment.

Personalised Service Delivery

Personalised service delivery is a key advantage, as NAV companies are known to customise their offerings to meet the unique needs and specifications of each development. This is a more than one-size-fits-all industry, and the ability to tailor services can often be the difference between a smooth, efficient process and one riddled with complications.

Seamless and Efficient Establishment of Services

This bespoke approach ensures that water and sewage services are established seamlessly and efficiently. From liaising with relevant authorities to planning and laying infrastructure and eventually running the services, the entire process is handled with a level of personalisation that bigger entities might need help to match. This saves house builders time and significantly minimises potential challenges or setbacks, thereby ensuring project timelines and budgets are more likely to stay on track.

The dynamic role and benefits offered by NAV companies represent an evolution in how water services are delivered. For house builders, understanding and engaging with these companies can unlock a myriad of benefits – from cost savings to bespoke service delivery – providing a more efficient and potentially more satisfactory outcome for both them and the future residents of their developments.

Why is Understanding NAVs Crucial for House Builders?

In today’s competitive market, a robust understanding of NAVs and the ability to leverage them effectively is integral for house builders. NAVs present a potential cost-saving opportunity and the ability to streamline the process of establishing water and sewerage services in new developments. This nuanced understanding can offer house builders a significant competitive edge, enhancing their capacity to deliver excellent results on time and within budget.

At Aptus, we specialise in providing OFWAT-approved NAV solutions, expertly tailored to the specific requirements of your project. We make it our business to understand yours. With our experienced team, you can confidently entrust your water connection needs to us. Whether you’re a seasoned property developer or a house builder, gaining knowledge about NAVs and their critical role can amplify your success.

To speak to our team of experts, call us on 01204 325 000, or leave us a message via our contact form. We look forward to helping you turn your blueprints into reality, one connection at a time.

Published on 11th July 2023