National Federation of Builders chief executive Julia Evans is calling for urgent intervention as the water company’s plans threaten to jack-up bond prices providing guarantees against defects on sewerage and drainage networks on new sites.

Evans said: “Housing Minister, Mark Prisk and Environment Secretary, Owen Paterson, must get together to stop the water industry bringing housebuilding to a dead stop.

“Even at this late stage, they should also try to persuade the Welsh Government to re-think”

From next month the Welsh Government will activate a part of the Flood and Water Management Act 2010, under which Welsh Water will impose stricter construction requirements and other funding demands on house builders.

Experts fear the move will send bond prices soaring making cover difficult to find.

Unless developers agree to the new terms – set out in what is called a Section 104 Agreement – it will be illegal for house builders to start on a site even though it has full planning permission.

The federation also fears the changes could be introduced in England.

A Welsh Government spokesperson said:  “The Welsh Government is committed to the development of sewerage and drainage systems which are well maintained, have sufficient capacity to manage demand and do not cause sewer flooding of people’s homes or pollute our environment.

“Following the successful transfer of private sewers to the sewerage undertakers on 1 October 2011, the Welsh Government will be introducing mandatory adoption arrangements for new foul sewers and lateral drains and Welsh Ministers Standards for new gravity foul sewers and lateral drains on 1 October 2012.

” The commencement of Section 42 of the Flood and Water Management Act 2010 will ensure that the second stage of the transfer of private sewers happens successfully and that customers are protected from the potentially costly burden of the maintenance and repairs of private sewers and lateral drains.

“This has been a Welsh Government commitment since 2009 and it will ensure suitable standards are met for water customers across Wales and avoid further proliferation of private sewers and lateral drains .

“It will also ensure that the sewers adopted by the sewerage undertakers will be of a suitable standard to avoid large costs being passed onto water customers.

” We have worked extensively with home builder representatives, including the NFB , to ensure this policy is fit for purpose.

“We also consulted and engaged widely on the implementation of this policy and asked whether the proposed arrangements were deemed to be effective and if additional transitional arrangements were needed. We have taken on board a range of views from the sector and they have been incorporated in to the final policy . ”

Dŵr Cymru Welsh Water said: “Dŵr Cymru Welsh Water is changing its sewer adoption process in response to a change in the law.  Welsh Government legislation from 1^st October 2012 will mean that new sewers and lateral drains that connect to the public sewerage system are adopted as part of the public sewerage network.

“This will ensure that future liabilities and maintenance obligations rest with Welsh Water, and not with developers or householders with sewer problems. It will remove the cost burden of repairs that they now face.

“Welsh Water is a not-for-profit company without shareholders and we have aimed to implement changes within the new law that are fair to developers and our customers.

“The revised financial guarantee, or bond, more accurately reflects the risks the company and our customers will face, and the new arrangements provide scope for developers to reduce their development costs. In addition, the length of time bonds will be held could reduce from as long as 10 years to as little as two years, depending on circumstances.”