Hello, and welcome to the Persimmon Trading Update Analyst Conference Call. My name is Jess, and I'll be your coordinator for today's event. For the duration of the call, your lines will be on listen only. There will be the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question at any time. If at any point you require assistance, please press star zero on your telephone keypad, and you will be connected to an operator. I will now hand you over to your host, Dean Finch, Group Chief Executive, to begin today's call. Thank you. Thank you, Jess. Good morning, everybody. Thanks for joining us this morning. Mike and I can't promise you the drama and excitement of last night. Probably a relief to all of us. We'll try not to score any own goals, and I've confiscated the green laser tags. Here goes. In March, we set out five key priorities for the business. Building right, first time, every time. Putting customers first and strengthening the brand. Responsible growth with build quality. Driving profits and cash, and driving sustainability in the business. I think we've made some important progress against these so far this year. I'm really pleased we've achieved 7,406 completions, which takes us almost back to pre-COVID volumes. Indeed, PD is up 2.5% on 2019, and very importantly, at much higher rates of customer satisfaction and build quality. Today, nearly 92% of our customers would recommend us to a friend, whereas at the same point in 2019, only 82% of customers would recommend us. What's more, our warranty providers, RI, have improved significantly, showing improvements of between 15% and 35%, which I think is a real achievement for the business. Back in March, I said I wanted us to be known for both outstanding service as well as outstanding value. Whilst our ambitions are to go much further, I believe these scores in terms of customer recommendations and build quality show how far we've come in a short space of time. I'm really proud of the teams in Persimmon who are delivering these fantastic results. I see a real buzz of excitement around the place, not just because of the footy, but amongst our constructions and operations teams, and I see us getting stronger every day. The focus on quality and our service, along with the fact that our houses are still priced at some 15% below the market average, shows the strength of commitment there is to our customers, after all, who pay our wages and our dividends. Sales have been incredibly strong in the first half, with rates up over 30% compared to 2020 and over 20% up over 2019. As I said, these are remarkable performances given where we started the year when we were plagued by COVID, labor shortages, lockdowns, and unusually challenging weather. All of these contributed to a slowing down in build in the early part of the year, but we are now catching this back up. As we go into the second half of this year, we benefit from an order book that is just short of the record we achieved this time last year and 12% above 2019. We're also benefiting from a very strong cash position with cash over GBP 1.3 billion at the end of June. This gives us the confidence to confirm the payment of a surplus capital dividend of GBP 1.10 by the middle of August. We've also made some really good progress in terms of adding to our land holdings. We bought over 10,000 plots into the group in the first half of the year, which represents a replacement rate of over 130% over consumption. Since September, we brought in nearly 14,000 plots. We've maintained a disciplined and responsible approach to buying land. I'm very pleased to confirm that we've maintained our hurdle rates when buying on the open market, where we've had some really good successes buying some high-quality sites around the country with strong margins. The strength of demand we've seen since the end of the first lockdown, together with the added delays we've seen in securing planning approvals because of COVID, has caused the outlet position to shrink. I'm pleased to say that we can see a good line of sight in terms of rebuilding our strength, both in the second half of this year and the first half of next. As reported in the statement, in the second half, for instance, we can see our way to some 85 new outlets coming to production. Subject to planning by this time next year, our outlet position will be substantially above where we are now, and this should enable us to trade from a great, very strong, solid platform. Following our cladding announcement earlier in the year, we set up a team internally, and we've engaged with customers throughout the country, helping them to secure EWS1 certificates, replace banned cladding, and remediate fire-related build defects. We're getting on with this. I'm also pleased that we've reached a settlement with the CMA. The voluntary undertakings we've given are the right thing to do for customers and will cost Persimmon very little. We've all seen the headlines about build cost inflation and material shortages. Persimmon has been affected to some extent, but also protected as a result of the brick and tile factory in Space4. We anticipate that house price growth we have seen will absorb build cost inflation. Overall, I'm delighted with the performance of the business in the first half of the year, and I'd like to take this opportunity to thank my colleagues for all their hard work. The outlook is strong, and we anticipate a second half performance broadly similar to the first half. Persimmon enjoys a tremendously strong land bank that will enable us to continue to follow our strategy of pursuing responsible growth while maintaining industry-leading margins. We've also got a great opportunity to continue to build on the strength of the market and the strength of customer demand, as well as take advantage of the many self-help opportunities that will come through Building Right First Time, as well as strengthening our brand by putting customers first against the backdrop of a very strong market. Thanks very much, and I'll now open up to any questions. If you would like to ask a question, please press star one on your telephone keypad. Please ensure your line is unmuted locally, as you will be advised when to ask your question. Once again, that's star one if you would like to ask a question. The first question comes from the line of Rajesh Patki from JP Morgan. Please go ahead. Morning, Dean. Morning, Mike. A couple of questions from me. The first one's on build cost inflation, if you could provide an update on what you're seeing on that. Your previous comment was for 3%-4% of build cost inflation. How have you seen that evolve in the first half, and what do you expect for the full year for both materials and for wages? The second one was on plot additions, which for the first half were around 10,000. Do you see more opportunities to do a similar amount in the second half, and what are the key constraints to it? Lastly, just on the mix of the proportion of partnership units picked versus the second half of last year, was it 18%? Do you see it getting back towards the 20% you've mentioned earlier? Thank you. Thanks, Rajesh. The build inflation we've seen is probably around 4.5% to 5% now, and we expect to continue to see this through the second half of the year. It's ebbing and flowing, and there's regional variations across the country. Broadly, that is the picture. We're seeing that increases in selling prices are absorbing it, and we expect that to continue to be the case in the second half. Very pleased with the performance in terms of buying plots in the first half. We expect that to continue in the second half. This is where Persimmon's strength comes in. I think whilst there's quite a lot of competition maybe at the smaller end, at the larger end, where we are typically pitching ourselves, the competition is not so intense, and we're able to buy some really good opportunities and with really good margins. Very pleased with the progress there and expect that will continue into the second half. Yeah, the mix is about 82% private, 18%. We expect that will probably turn back to 80/20 during the course of the second half. We're in a very strong place. Just on that, Rajesh Patki, on the HIA coming back, that's driven by outlet numbers and opening up the new outlets as they come through. As you know, they'll be on a turnkey contract. We'll be selling the 20%, 25%, 30% volume on each site to the registered social landlords. As we open up these new sites, we've got good visibility there, as Dean Finch points to. We should see that sort of sales mix normalize, as Dean Finch says, over the next sort of 12 to 18 months, I would expect. Okay. Thank you. The next question comes from the line of Will Jones from Redburn. Please go ahead. Thanks. Good morning. Three, if I could please, just around a few of the different operating metrics. I guess just firstly exploring sales rates, clearly a very strong first half. I just wondered how you were thinking more generally about what the second half might bring. I think historically in normal years, you've been back in the 0.6 s for the sales rate typically in the second half of the year, but do you think that might still remain a package above trend in the current market? The second moving from sales rates I guess to build rates. I think if we look at the equivalent unit data you've given today compared to where you were at December, and think about the completions that have come out, and my math may be wrong, but I think it implies a build rate per week at somewhere around 250, 260 in the first half. Correct me if I'm wrong on that, but if so, that's obviously dipped down versus where you were. Maybe that's the weather in the first half of the year, the availability constraints. I guess just more general comments around build rates and t he prospects from here would be great, please. Just tying that up with site numbers, 285 for the first half. I think you're still talking of roughly 300 for the full year. Are your openings in the second half more higher than is normally the case, that 85 or so number? Again, assuming the sales rates are going to remain pretty good. Just wondering how that average gets back up to 300 from 285. Thank you. Thank you. Yeah, look, we expect a return to a more normal seasonal pattern, which is obviously a bit weaker over the summer period, then a return to strength during the autumn. Look, the forward order book is very strong. We expect a strong performance in the second half from where we're standing at the moment. Build rates were really impacted at the start of the year. When I was talking to you in January, I could see what was going on then and the business was struggling. We had COVID everywhere. The weather was terrible. We had lots of people not come back from Europe because of Brexit. That just impacted build rates, and it impacted build rates during January and February. That has now recovered. We're now back to building ahead of what we're selling across the business. We're also, to some extent, a victim of our own success. For instance, it's a different regional picture across the country in terms of what we're seeing. I was in Kent on Tuesday, and they're not seeing a particular shortage of bricklayers down there. Yesterday, I was in South Yorkshire and Lincoln and Grimsby, we are. Having said that, across the north of the business, we've currently got something like 284 bricklaying gangs, which is a record for us. We think we need another 62 more. It's just the strength of demand at the moment. The business is in great shape, really, straining at the leash. Build rates, we do not expect are going to impact on our performance in the second half. Yes, it's tough out there, but our guys are resourceful, and they're managing it very well, in my opinion. Site numbers, yeah, we've got some good numbers coming through the second half. As you said, we think our outlet numbers are going to be around about 300 average across the course of the year. As I said in my opening few words, the outlook position into next year, subject to planning, is very strong. Thank you. The next question comes from the line of Arnaud Lehmann from Bank of America. Please go ahead. Thank you very much. Good morning, Dean. Good morning, Mike. Good morning, Arnaud. Three on my side, please. Firstly, can you give us an update on the Help to Buy 2.0? Obviously, we're well ahead into this process now. Are you happy with the way it's running? Are customers happy with it? Any disruption in terms of the regional price caps, et cetera? That's my first question. Secondly, we've seen many press articles reporting shortages of building materials, including timber. I think timber frame is one structure that the industry has been expanding over the last years. Have you seen any slowdown on building sites so far because of materials missing? Lastly, would you mind commenting on the U.K. building safety rules that came out, I think a couple of days ago, maybe three days ago now, where the government, I guess, is trying to get some of the developers to pay some extra cost. Do you see any implication for Persimmon? Thank you. Thanks, Arnaud. Generally, I think on Help to Buy, look, we didn't miss a beat, really. It's about half of demand in the first half. Certainly, we have not really encountered any regional difficulties because of price caps across the course of the country. Demand is just really very strong at the moment. Mike, I don't know whether you've got anything more you want to add. Yeah, just a little bit of additional detail. As Dean points to, about half the PD legals in the first half were sold to customers choosing to use the Help to Buy scheme, and within that, about 30% was old scheme, 20% was new scheme. That seems to continue. The new scheme is gaining good traction in the market, and good numbers of first-time buyers are taking advantage of it. I think we continue to see good support to customer demand from that angle. Yeah, it's been a bit of a seamless transition for ourselves. On building supplies, each another day, it's another issue. You name it, we've seen challenges, whether it's timber, plastics, chips for appliances, chipboard. Yeah. Look, the message is, yeah, it's tight out there. COVID's partly impacted that. Strength of demand has partly impacted that. We are coping. That is the message. We are coping. The guys are being resourceful, getting ahead of the problem. We're an important consumer for our supply chain, and we're also helped, of course, by our own vertical integration. We've not suffered a tiles issue, for instance. I was at the Brick and Tile factory yesterday, and we've got our own bricks, obviously, and that's helping the business. Our own pavers, that's helping the business. Timber Frame is also obviously self-help going on there for us. Look, we've all read it in the papers, it is true, it is affecting production, but we're coping with it and we're managing it. We're not signaling to you that we think it's going to cause us a problem in completions in the second half. In terms of the U.K. building safety rules, it's only just out to consultation, I believe. I've seen various fairly alarmist accounts of it. First of all, look, we're not building high-rise. Secondly, I think Persimmon's in a strong place here, in terms of the work we've done on cavity barriers, in terms of the work we're doing on cladding, and in terms of the quality programs we've got in place and the strength of our internal teams and the focus on safety within the business. It doesn't come as a surprise to me remotely, frankly, coming from a different sector, that there should be an interest in having regulation of safety in the construction industry. The surprise to me is that we don't have it. That might impose build cost on some. I don't think it's going to have much impact on Persimmon, but as I said, we have got to see what the bill finally says. It's got to return through consultation. There's a lot of water to pass under that bridge before I think there's anything too much for us to worry about. All right, very clear. Thank you so much. Thanks, Arnaud Lehmann. The next question comes from the line of Jon Bell from Deutsche Bank. Please go ahead. Yeah, morning, Dean. Morning, Mike. It's coming home. Three questions from me, if I can. I thought I'd soften you up with that one first. You couldn't resist it, Jon. I can't. It's too much. I think I've got three questions. First one really is on land. I think you've mentioned that you maintained your hurdle rates on new land acquisitions. Can you just remind us what those hurdle rates are, please? The second one is on net cash, and the question is really how much is too much? You've made a tweak to the dividend, an acceleration from December to August, but clearly your cash number is rising, and I just wonder where your red lines are really in terms of that number. The third one, which you're definitely not going to answer, but could you give us a sales rate in the last couple of weeks, please? Mike has done a sliding tackle across desk, and he chopped me out of answering question one. Sorry, Mike, but that's it. I'm on the floor. He's taken me out. That's it. Net cash. Well, look, obviously we're in a strong position. We keep it under review, guys. We've signaled what we will do for this year. It supports the payment of the dividend next year. Mike has, I think, painted over the years a very clear story about the robustness of the Persimmon dividend, and I think that's dead right. It's a huge strength of the company. We keep it under review. The payout is very much as we signaled to the market. Mike, I don't know whether you've got anything more. You're right, Dean. I don't think there's any change, really. We're pleased that we're able to, on the back of a strong performance Dean outlined earlier, and you can see in the statement, it puts us in a great position to be able to accelerate and consolidate that surplus capital repayment to shareholders in August that Dean pointed to at the top of the meeting. We keep it under review, and we bookend the capital structure through the circa GBP 700 million liquidity requirement to cover off the annual working capital amplitude and a bit of firepower to invest a bit more in land at the right time. I think there's no change to that, and I think the board as a whole has been clear with that stance over many years. Yes, we seem to continue to have a little bit extra liquidity here, but at times like this, a little bit of a stronger hedge against future risk is not a bad place to be. We were reminded of that early on last year when the pandemic hit, when we didn't need any support from government with respect to furlough or funding schemes, et cetera. Given that we'd spent a large number of years creating such a strong platform, we were reminded that the strategy works and at times of distress, that's why the strategy is there to support the interests of all stakeholders in the business. I think as a board, we're very pleased with the discipline that we're continuing to pursue in terms of the operational execution of the strategy of the business. Just in terms of sales rates, I think what I would say at this stage, we'll give more color at the half year, but they still remain strong. They are still strong and a smidge above normal at the moment. We're in a very solid place. All the lead indicators, Jon, when we look at our website activity, cancellation rates, reasons for cancellation in terms of down vals and mortgage application rejections and elements like that, there's no spike or red flags being waved at this point in time. It all looks to be running along with a pretty sound market. Albeit, we're all aware of, obviously, that things can change given that we've got a third wave that we're sort of facing into. You've got to be a little bit concerned about the consequences of that. I think we're pleased with where we are. We'd like more outlets and a bit more work in progress and choice for customers, as Dean's already pointed to. Dean says, in a way, we're a little bit of a victim of our own success on sales rates. Indeed on a number of sites we're now holding back to let build catch up. It's a good place to be. It's a good place to be at this point. Yeah. Yeah. As Mike says, I think the market remains very healthy. As I said, I was in Kent on Tuesday looking at my first Nick and Cambers in-house that I've seen anyway, and a customer's early birded that one. It is very strong across the country still. Yeah, business is in a good place. We're well forward sold. Yeah, we're in a good place. I mean, another tidbit there, Jon, and it's probably a subsidiary question that you're hesitating to ask, but in terms of the roll off of the stamp duty window, we're already well sold beyond the end of September. When you look at the round about 5,000 private sales that we've got forward sold at June, around about 50% of those are beyond September delivery. It's another indication of the strength in the market that Dean points to. Look when I was in South Yorkshire yesterday, they're selling into next year now. Can I just ask one supplementary, if I can? I mean, the theme of the hour when you guys speak to the market is inflation. If I look at financial markets, the kind of reflation trade seems to be hanging by a thread. What's been your previous experience at the margin level if HPI and build cost inflation start tempering, start trending down in three months' time? How does that tend to impact the margin? Yeah, it's an interesting equation to think about, and it's all about the rate of change of each, isn't it? I mean, if you plot the graph and look to different scenarios, then it's all about how steep is which line in relation to other, selling price relative to overall build cost inflation. I think we've got a good firm market. Obviously, we're well forward sold. That reflects the current market conditions in terms of clearing price. I think the overall activity in the market continues to be strong, including the wider secondhand market, which has been the benefit of the stamp duty window. That I think that confidence supported by the FTSE last night, et cetera, will continue and we're pretty positive about that. Dean points to early bird activity where customers express good interest before you get to a pre-reservation stage. We're still seeing good indications of interest on that level. On the cost side, well, nobody really knows. I mean, we all read the commentary around it. I think the material side is where the more acute inflation is being felt. On labor rates, not so much. Those conditions can change and I think that as the supply chain finds a firmer footing. Then hopefully we'll see some of the cost pressure subside on the material side, albeit we might find labor rates moving in slightly the other direction. Yeah. Your crystal ball is as good as ours on that, and it's hard to be definitive. At this point in time, we would say our margin rate, and it's important I emphasize margin rate, we expect that to remain at similar levels that we'll be reporting in August for the rest of the year. We may see a little bit of extra at this point in time. A bit of optimism there, a bit of risk on the upside. Into next year, well, if we continue to sell well and there's a balance between those inflationary effects, well, we should see that sort of margin position continuing. As you know, the value driver in our business is the land, and Dean's already said that the replacement of land has gone well. We're being very disciplined about that, and that will continue to support the superior margins that the business delivers. We're very confident that we've got a high-quality platform irrespective of what selling price and build costs do in the future because it provides a great support and cushion, if you will, and provides resilience to those margins as we move forward over the next two, three years and beyond. Yeah. Thanks very much, gents. Enjoy the final. Yeah. Cheers, Jon. The next question comes from the line of Glynis Johnson from Jefferies. Please go ahead. Morning. Morning. I have a few. I'm not going to say how many. I'm just going to roll them off. They're quite quick, so hopefully they'll be quite sharp to answer. You talked about outlook homes for the next 12 months being substantially ahead. Can you define substantially? I'm wondering whether you can put it in the context of maybe the 350 that you talked about for the year end 2022. Your land intake, I wonder if you can tell us how much of that is being strategic and maybe how much is being behold strategic. In terms of the selling price, obviously the order book has a little bit of selling price upside. What should we be anticipating in terms of the selling price on your previous products? I'm probably being pedantic on wording. You said house price inflation seen will absorb build cost inflation. Is that a difference in timing? If you see continued house price inflation and build cost inflation where it stays, does that margin increase? I think that's what your optimism for H2 is basically saying, but I just want to double check. Lastly, just in terms of those outlook homes going up, how should we think about the work in progress requirement? Are we going to see actually that working capital requirement step up and therefore the surplus cash argument having to absorb bad spend there? I'll have a go at all of those, Glynis, and Mike can put me on the straight path when I go wrong. Look, as we increase outlets, it's bound to absorb work in progress. We will be getting back towards subject to planning, and that's my caveat because planning is really tough at the moment. There's no point denying it. There's a delay in the system caused by COVID. Our outlet numbers will be getting towards above 300 and beyond during the course by about this time next year. Subject to market conditions, we'll be making progress towards the 350. As we open those up, that will absorb cash and GBP 7,500 million of cash you can easily see get invested in those sites as we build out before we can't start taking sales. The mix is about 50/50, which is particularly pleasing. I think, as I alluded to when I spoke, I've been particularly impressed at what the guys have been able to bring in from the open market and how we've been able to compete, particularly amongst the larger sites. I think that's our real strength, and that obviously gives us a platform for further opportunities downstream. Obviously, we're probably going to answer the question about margin 1,000 times today when you ask it 10,000 different ways. It's good at the moment. We're seeing that inflation is covering build cost inflation. As Mike just said a few minutes ago, we don't know what's going to happen in the second half in terms of those relativities. We're at the 27.5%-28% at the moment. That's where we hope to be for the second half of the year. Who knows what's going to happen when furlough comes off in terms of what happens to the labor market. I think my view is we could see a bit of easing coming in at that point. It also is strength of demand. As I said a few moments ago, we think we're short of about 62 gangs across the north of England at the moment in terms of bricklayers, but we're at record levels of employment. It's a complex picture which is moving all the time. The business is in really good shape. Mike, I don't know if you want to. I think that sort of summarizes it. We'll obviously give a bit more color on some of these data points in August as well. I think we're particularly pleased with that mix of b ringing the extra plots into the business with around about the 50/50 split strategic and open market. We're seeing good quality right across that. I think we are particularly pleased with that, sticking to our disciplines. I'm sorry, Mike, just in terms of the PD pricing. Yeah, you can see that in the forward order book, we're seeing PD pricing still moving forward. Compared with 2020, we've got about 3.5% improvement on that. That's positive. We're still seeing great support in the mortgage market, more higher LTV product coming in for those that need it. I think one contextual point around the progress on, or prognosis on selling prices is the fact that obviously we all worry about the journey we've traveled on the recovery of capital values since the GFC. One element to consider and reflect on is affordability, as we all know. Obviously with the level of interest rates that we're looking at, and okay, Jon referred to this reflation trade and the response of longer-term coupons in respect of that. That might flick up a little bit in the nearer term, maybe in next year and 2023. Yes, from a percent perspective, it's a big increase. Given that the vast majority of mortgage products are capital repayment, it's a lot less sensitive to interest rate increases. The real pressure is on buying a ticket to the party in terms of deposit values. Obviously, that's where the Help to Buy scheme that the government provides support with to customers helps. We are encouraged by the fact that the mortgage lenders are continuing to compete for the new flow of business and are offering great product into the market at that end. Hopefully, that will continue to develop and that will support selling prices. Thank you. The next question comes from the line of Gregor Kuglitsch from UBS. Please go ahead. Hi. Good morning. Maybe a couple left from me then. Can I just sort of probe you on? That's the way it's all fine. We're not charging for it. I guess maybe a little bit more on the volume. Obviously, you were close to sort of 2019 levels in H1. Obviously, your guidance implies there's a bit of a pullback, I guess, relative to that baseline of 2019 in H2. I guess my question is, what's the variability around that? Could that be materially better or is it basically kind of constrained by the constraining factor basically being build, in other words, it's very unlikely to be materially different? Perhaps related to that, I don't know how you'd like commented on this, but is your kind of base case that by next year you'll be back to the 2019 level? Is that the right way to think about sort of the volume outlook? Maybe a second question, could you just give us some detail what you think the additional costs will be as part of the decarbonization for the Part L as we think about sort of, I don't know how you would look to think about it, but basically per plot or something like that, what the additional cost will be for you or what's your best estimate at this stage? No, I think, look, in terms of actually, in the first half, private sales were just short 2.5% up on 2019. We were maybe 200 or 300 down on RHA. The constraint in the second half is going to be outlets. Getting back to 2019 levels, I think is perfectly possible. At a higher build quality level, which is something not to be missed in here, I think, is a function of us getting the outlets out there, which is itself a function of planning. We can see the line of sight to that coming through during the course of the next 12 months. With those outlets there, if we expect the same rate of sales as we saw in 2019, that will be governed when we're back at that overall level of volume. Profitability on it is good. In terms of additional costs, we're GBP 3.45 a square foot. That's our rule of thumb at the moment. Very hard to say in terms of the 2025 regs, which is still to be determined, as you know. There's an awful lot of water to pass under the bridge there. I suppose when I think about it, I feel it's a relatively low percentage of selling price that we need to recover. Yeah, Gregor, it's an interesting point that you raised there, and there's a lot of talk in the industry together with mortgage lenders and the wider industry supply chain indeed on this in terms of, well, what does the advent of 2025 reg zero carbon, however you want to describe it, mean for home values, does it provide an opportunity in the market to price homes differently if they are truly zero carbon? We haven't got the answer to that. As I say, there's quite a lot of discussion around that, because a viable decarbonization journey does rely on all parties to come to the table. We're working hard with the industry down the supply chain. We're doing a lot of R&D on this. We're ideally placed with our Space4 structured methodology to continue to develop that. We feel pretty positive about the opportunities there, albeit there are a large number of challenges. The supply chain is going to have to step up, and capital is going to have to be invested. For example, just the capacity to deliver enough air source heat pump capacity to the market is massive. If that's an essential ingredient to achieving these end results, we want to make sure that that capacity is there. There's a large, as always, Greg, there's no simple silver bullet to this. We wish there was, but we're full square behind it, and we're working very hard to achieve the goals that government policy is trying to deliver. Right The decarbonization imperative is urgent, and we share in that, and we want to do our bit to achieve it. Right. Sorry, I know that you're expecting things per square foot. Obviously, I should probably know this, but if I look at your average property, what is it, eight, 900 sq ft? Yeah. Is that about right? To get a sense, call it GBP 3 grand. That's basically what you're saying? For the first bit, and then the second bit, I guess who knows. It's a moving rate. Yes, that is correct. As Mike was alluding to in there, the way we're looking at it, on the one hand, there's an awful lot of work to be done in the supply chain yet, which as we're at very low numbers of production of heat pumps in the country at the moment, that's got to ramp up drastically over the course of the next five years. Which is going to have, I think, implications for per unit cost, probably on a downward trend as it moves into mass production. There's other aspects of it that have got to gear up and that's heat engineers who can install and maintain because there are probably not a lot of those in the country at the moment. That's an issue that's got to be worked through, too. We do expect by the time we get to implementing 25 regs that the unit cost will have fallen. We expect an increment beyond where we are now. Can't say what it is, I'm afraid, but it will be less than I think first thought. Then you have to contextualize that in terms of actually, I think there will be a positive customer demand for a zero carbon house, which will impact both demand and relatively small costs of the overall value of the house as a percentage. Right. Maybe a final question. What are your views on the sort of planning bill and the proposals there? I guess maybe they never happen, but what are your high level thoughts? I think the Tory backbench is providing a very strong opposition to government at the moment. Therefore, I think that there is a lot of dialogue that's got to go on between the government frontbench and the government backbench before we know what the outcome of that is going to be. I don't think anybody knows the answer to that yet. Okay, fair enough. Thank you. Thanks for the answers. Have a good day. Thank you. The next question comes from the line of Gavin Jago from Barclays. Please go ahead. Morning, Dean. Morning, Mike. Morning. Hi, Gavin. Yeah, just a few if I could please. The first one's just around the HBF survey. I'm just wondering if you're able to share anything on if there's any progress you've made in the nine-month survey. Just with customers, obviously, there's been a strong increase in your eight-week one, but just in terms of the delta on nine months, I guess, over the same period. The second one's just a reminder, please, of your capacity and your brick and tile factory. How many, maybe just give us a number in how many homes you actually can supply with bricks and tiles over a year. The final one's just clarity, please, just on Help to Buy reservation rates through the first half rather than legal completions. Thank you. We've made about 10% progress on the nine-month- Okay which is encouraging, but nowhere near where we want it to be. Yeah. We're still dealing with previous survey years at the moment. I do expect with the pull forward on the eight-week, that will have an impact on the nine-month. As we look ahead for the next one to two years, big focus on activity within the business. Look, we're doing a lot on this. We've got a new head of customer care that's just joined the business, and she's building our team and building our infrastructure. We look forward to working, registering with the New Homes Quality Code, and implementing that into the business over the course of the next year. This is a subject of great focus within the business, and I'm looking forward to continued progress over the course of the next couple of years. Still very much behind where we want it to be, but it's traveling in the right direction. Well, the overall capacity of the brick factory is 80 million. At the moment, we're currently using about half of that within the business. We're doing some good things with the bricks. As I said, I was there yesterday. With our generation 4 out in September, that will be available for use within the business. It's getting better and better. I'm pleased with how the product looks, and excited about how we will continue to roll that out in the business. Tiles are great. They look really good, and there's a great take-up rate within the business at the moment. I see that as all very positive. Further developments to come in terms of color and range within the business. Broadening out, brick pavers, permeable brick pavers, that we'll be introducing into the business, and stepping up the take-up rate within the business. It's actually cheaper than tarmac at the moment, so it's amazing. Yeah, a lot of self-help there within the business. Dean, just to push on that, in terms of the number of units that would be built using your brick, just kind of equivalent units. How many has got roughly per annum, and I guess on the tiles as well, just to think how much you've got in hand at the moment? Well, tiles is a relatively new addition to the business, so I think the penetration rate is quite low at the moment. It's probably just down about 20%, but I do see that expanding rapidly across the business. The tile capacity, we could supply the whole business, but we choose not to because it's all about security of supply, and we need a healthy supply chain, and we're happy to invest in the supply chain as well as have the vertical integration. We're never going to put all our eggs in one basket. We do have the capacity there to, in extremis, secure the supply, which was the whole premise around the investment in the CapEx. We're quite pleased to have that. At times like this, it reminds us why we've done it. Because there is anecdotal evidence around the industry that others are getting pinched here and there in terms of brick supply and roof tile. Of course, it depends on the vernacular as well. It won't be applied to render, slap board, it won't be on that either, which is large swathes of the country as well. You can't think about it as 100%. Actually, when you think about it is all about security of supply. It was never really to provide a cost advantage. We're going through a period of inflation on manufactured building supply, and you think, well, actually, it does provide some mitigation to that in the face of an external inflationary environment. I think that it's not the main reason for investing and providing more capacity for ourselves and the wider industry as a second-round effect. It does help to mitigate those cost pressures as well at times like this. On both fronts it works pretty hard for us. On the Help to Buy reservation rates, well, yes, I think you're alluding to how has the new scheme picked up relative to the old scheme. There's been a bit of a transition. We were only able to reserve and take reservation on new homes on the new scheme, from the middle of December last. Obviously, we've got maybe six months under our belt, and it's gone well. I think we said that in our forward sales, we've got 33% sold forward to customers choosing to use the Help to Buy scheme. Okay. It's going pretty well, Gavin. We're not seeing any major dislocation because, as Dean said earlier, price caps. Okay, yeah, they crimp around the edges, but as we anticipated, it's not a major issue for us, and you can see it in our sales rates. If you want evidence, the sales rates remain pretty strong, and all indications are that the fact that the Help to Buy scheme now excludes non-first-time buyers isn't a particular issue for us. That probably reflects the fact that we've positioned the business with a good range and choice of homes across price points, but with a weighting to the lower price points. W e feel confident that the business continues to be positioned well in the market. Excellent. Thanks, Dean. Thanks, Gavin. Before we go to the next question, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. The next question comes from the line of Christopher Fremantle from Morgan Stanley. Please go ahead. Hi. Good morning. Just a very brief follow-up to, I think it was Glynis Johnson's question. Just on the outlet numbers, and I think you were talking about trying to move towards 350 subject to planning, so about mid-teens percent higher than the average you're talking about for 2021. Are these, the outlets that you're targeting, are they similar in size and selling price? Are we talking about getting to a point of an average 350 outlets? I'm asking that obviously because, if I look at revenue consensus a couple of years out, we're only, sell side consensus, only about 10% higher than where we are in 2021. I know there are lots of moving parts, and I appreciate you might not want to be raising the bar too high for yourselves at this stage, but are we talking about getting back to a sort of average 350? Well, look, as I said to you earlier, it depends on progress through planning, which I think slows things down apace, and also market conditions. We're not chasing volume for volume's sake, but we do have an ambition to grow responsibly at a steady pace over the course of the next two or three years, subject to markets remaining as they are now. I think 350 is a decent ambition for the business over the back end of 2022 into 2023, subject to planning. That's, rather than a cross to hang around our necks, that is a target that we're working towards. I think, for me, the thing to focus on is not so much that, but the potential uptick from where we are now in terms of outlets to where we might get to back end of next year and halfway through next year, back end of next year and beyond. I think that is potentially quite exciting for the business. I think, if you're looking at volume guidance, Chris, I think we said it earlier on. I think Gregor sort of pointed to it in his question, that for 2022, we've got the ambition to grow back to 2019 volumes. Obviously as that strength of outlets comes through next year towards the back end of next year into 2023, as Dean said, that puts us in a great position to grow further from there. As always, planning is a particularly difficult place to be at this point in time. I guess there's risk on slippage there in terms of timings, of getting outlets through into production and being able to offer new homes for sale around the country. I think we've got to remain ambitious but realistic, if you know what I mean, because there are challenges there. We'd like more sooner if we can. Yeah. That's what we're driving for. All right. That's helpful color. Thank you. There are no further questions in the queue, so I'll hand the call back to your host for any closing remarks. That's great. Thanks very much. Thanks for joining us. I was expecting another hour of questions, but we'll take it and run. Well, thanks for joining us, guys, and let's look forward to the result on the weekend. Thank you. Cheers, now. Thank you for joining today's call. You may now disconnect your lines.