30 May 2017

Is there room for custom build in the new era of local authority building?

Is there room for custom build in the new era of local authority building?

You might not know it, but we’re in a housing revolution right now, thanks to local authority building.

Although it’s not that apparent, the pendulum has swung back, and once again the agenda for housing is very much biased towards councils as builders, or at least facilitators of, new homes.

Reading the three main parties’ manifestos for the election, the consensus is surprisingly clear. We need more housing, we need it affordable, and we need councils to be bringing it on.

In their manifestos, all three parties have committed to providing over 1 million homes in the near future. In fact the Conservatives have pledged an additional 500,000 by 2022 on top of their current 1 million target for 2015-2020.

From all three parties there’s a common agreement on the need for garden cities and towns, and across the board the emphasis is firmly on increased council and housing association building to create affordable homes.

So we’re returning to a period not seen since the post-war years of council building as a way of delivering homes, whether they be for social housing or for market sale.

On one level this is eminently sensible. After all, councils’ ambitions to house people transcends the pure pursuit of profit that has contributed so much to our catastrophic housing supply market.

The current system has failed to provide the housing we want, need or can even afford, although it has nicely lined the pockets of the shareholders. And these are the people who are probably most likely to object to local planning in their towns and villages.

Evolving market

But rather than being a wholly new phenomenon, this move to council and housing association building has been gradually growing over the last few years, as affordability, quality and choice have been left behind by the volume house builders’ lucrative monopoly of the market.

Cash-strapped enterprising councils across the land are starting to see the logic of building on their own land – either to supply what the volume builders won’t, or as a way of generating income to finance regeneration elsewhere.

To do this, many are working with housing associations or have set up their own companies to take on large scale or opportunistic building.

This new generation of companies is already bringing on a range of housing, typically with an emphasis on affordability. It’s reckoned that over a third of English councils are already engaged in this process, although areas of higher value tend to be most active, such as the south east.

For example, Croydon council’s Brick by Brick is a private development company aiming to provide 1,000 new and affordable homes over 50 sites across the borough by 2019.

Red Door is a Newham Council initiative to bring on 3,000 private rented homes, while in Essex, Thurrock council established the publicly-owned Gloriana company to kickstart housing in an area of little interest to the large housebuilders.

Further north, Sheffield Council set up the Sheffield Housing Company, a partnership organisation 50/50 split with Keepmoat Great Places as a private sector partner, to bring on 2,300 new homes over 15 years

These companies seem to be the future according to the manifestos, representing the sea-change in attitude in that LAs are now able to, and indeed will soon be required to be, in some way self-financing, or at least working towards being more enterprising.

But limited access to borrowing will need to improve if this growth is to continue and councils are able to fulfil these expectations.

The potential for custom build

The outlook for custom build is mixed in all of this, regardless of which party wins the election. On the one hand, these new companies could represent a golden opportunity for the custom homes sector.

By their very nature, they tend to be entrepreneurial and open to new ways of doing things, and they often have access to council-owned or backed land. And of course, shell models – even in apartments – together with sweat equity mean that affordability can also be factored in. So custom build could easily be included within their remits.

But there is a real rush about all of this, as the housing is so desperately needed, and my fear will be that the councils concerned will focus on providing the easiest and quickest route to built properties. And custom build has yet to prove itself as a simple solution.

So what can we do as a sector? It’s vital that we represent custom build in the best possible light we can. We know it’s perfectly suited to the challenges of creating community, diversity and a range of housing supply, and it’s vital that we work together to ensure this message is not missed.

Specialist markets, such as multi-generational homes or downsizers, are a vital part of any housing mix that custom build can so readily meet. But we must educate both councils and consumers that it can be achieved, and doesn’t actually involve the homeowner laying bricks painfully and slowly.

I’d love to see custom build on the agenda with this new breed of housing company – but it needs local government backing to help follow through on the current government’s endorsement of custom build, as seen in the Housing White Paper. Without this, custom build risks being left behind, and these future neighbourhoods will be poorer for the lack of it.

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