A briefing paper for a state-commissioned inquiry into the use of high-front guttering and its link to water damage in homes has concluded that ''guttering design for a high number of display homes is not compliant''.

But the Office of Fair Trading is refusing to publicly identify the building companies involved, which have been notified in writing, or say how many builders have been caught.

Nor will Fair Trading reveal what it plans to do about notifying home owners affected, saying it would be inappropriate to comment while the review was still in progress.

The Housing Industry Association, which briefed the inquiry on November 25, has also refused to comment, and declined to provide the Herald with figures on how many project homes are built in NSW each year, saying it does not hold such statistics.

Anywhere between 20,000 and 30,000 new homes have been built in NSW each year over the past decade, and roughly four out of five are project homes.

Angus Kell, a practice committee member of the Australian Institute of Architects who has also briefed the inquiry, said the project home findings were further evidence that the installation of non-compliant high-front guttering was widespread.

''Certifiers are still signing off on non-compliant work because they don't know any better, and TAFE plumbers are still being taught using manuals from the 1980s, before high-front guttering became popular,'' he said. ''The government is simply leaving the consumer to pick up the bill.''

According to manufacturers' instructions, the guttering systems are fitted using a spring-clip system, which in combination with the high front of the gutter can encourage water to flow back into buildings during heavy downpours, contributing to mould, timber rot and deterioration.

Under Standards Australia and the Building Code of Australia requirements, however, a gutter must direct the flow of water away from the house under all circumstances.

After moving into their new project home in Cameron Park near Newcastle, Kerri-Anne Wallace and her partner experienced guttering failure during November's heavy rains.

A large watermark is now visible on the ceiling of their home. A building certifier had signed off on the work just weeks earlier.