28 Aug 2017

Councils need to fund infrastructure for custom build on their own land

Councils need to fund infrastructure for custom build on their own land

One of the foibles of any emerging sector is that it can be hard to pin down and pigeonhole, and custom build is no different.

Since we launched Custom Build Strategy, I’ve been saying how we need completed projects that serve as examples of what can be achieved by the industry.

These finished homes can then be held up to planners and consumers alike to testify that custom build delivers beautiful, tailored homes.

These could be homes that followed a pure custom build route with a developer on board, enabled self-build with serviced plots, or a cohousing development (don’t miss Chris Brown’s excellent look at community custom build). But what’s important about these sites, is that they’re catalysts that provide a model for others to follow.

What comes next is equally important though. It is these second phase projects that build on the successes and failures of these pioneer projects that will adopt and adapt their methods.

Dominant models

At the start of this journey we expected the developer model to dominate and grow, taking up the lion’s share of the market. Everything pointed to dynamic and innovative custom build companies building better homes, with placemaking at their heart.

But the Right To Build Legislation has shifted the emphasis in an unexpected direction. The three-year requirement for local authorities to supply serviced plots has put pressure on councils to deliver land for custom build. And using their own surplus land is a simple route to this.

Simultaneously, we’re seeing is an increasing number of councils engaging as house builders.

Industry estimates suggest over 90 local authorities are in the process of setting up housing companies, and many others are pairing with housing associations to bring on new homes.

What would it be like if we could persuade these councils to back custom build?

Councils as custom builders

A small but determined group of proactive councils, like Cherwell DC, South Cambridgeshire DC or Teignbridge DC are already reinventing how custom homes and serviced plots are being delivered locally. And it is these pioneers that are laying the foundations for others.

“If you build it, they will come” will mean something to readers of a certain age, but the sentiment has gone from a Kevin Kostner line to mean something far more significant.

These savvy councils are using the Right To Build Registers to inform them about local demand, but taking this one step further to actually create more custom plots than needed. This is on the presumption that if they create the plots, the public will embrace these and build on them.

This may not be as much a leap of faith as you’d expect – research by NaCSBA and the Right To Build Task Force shows that those councils with the largest custom build sites, such as Cherwell, also have the largest registers. Quite literally, build plots, and they will come.

And the easiest way for councils to do this, is by bringing on their own plots, on their own land. Creating the infrastructure themselves paves the way for custom build to happen, quickly and relatively easily.

Council-led sites

Custom Build Strategy exists to share what’s happening in the sector, and one of the most unexpected outcomes is this process of council-led or -promoted sites level-pegging with the developer models.

There’s a few reasons why this might be so. In bringing on custom build, developers are taking on considerable risk.

In some cases, ambitious SMEs who back custom building are struggling to get their projects off the ground, often down to not being able to obtain planning permission.

This may be through local planning setbacks, public opposition or financial constraints.

Traditionally, councils don’t act adventurously. But going forwards, more of them need to be adopting an entrepreneurial approach.

And with this, I’d love to see more bringing on their own custom build developments. This could either be on land they own or that they buy or partner with as part of a larger deal.

But the key to this growth is for them to be prepared to fund, or borrow to fund, these schemes to help custom build happen and get the infrastructure put in place, whether through Prudential Borrowing or other streams.

Retaining greater control

Some are doing this, but more need to follow. The benefit for planners is that they get to have more control over where custom build is happening, with the ability to have a greater say should they wish to do so.

And custom build ticks a lot of boxes: it supports SMEs, provides training and local employment opportunities, tends to offer a route to homes with higher-quality builds and better architectural merits, and often feature a considerable commitment to placemaking.

For residents, it offers greater choice as it helps purchasers tailor their home to their needs.

This could be for spacious homes with one or two bedrooms for the downsizing market, larger homes for multi-generational families, or just better spaces that suit people’s lives, whether that be for assisted living, work or hobbies.

This diversification means that councils are providing more of the homes that people need.

And now the Right To Build Task Force is up and running, local authorities are able to get help at discounted rates to help them plug a few knowledge gaps that might be limiting their custom homes activity.

BuildStore is ever more active in supporting stakeholders bringing on custom build, and even consumer financing is improving, such as with the arrival of mainstream lender Virgin with a dedicated custom build product.

I would encourage councils to take up this opportunity to get help and establish how to finance custom build, and create the infrastructure needed to put serviced-plots on the market.

And it’s a sure fire way to ensure they’re supplying the demand evidenced on their registers for these plots.

Even though it may pose a risk to them, when they’re so traditionally risk-adverse, the rewards are more than worth it. Even Government says so!

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