Over the last few years innovative councils have been looking at custom and self build as a way of diversifying their local housing market, and for many, the former is intrinsically linked to affordability. But this is not the case for everyone, as Philip Brundrett, Programme Manager for City Renewal at Stoke On Trent City Council explains.
“Stoke City does not reflect the situation in much of the country,” says Brundrett. Stoke has an unusual makeup in that most of its housing stock is in Council Tax bands A-C, with 85% of these in Band A. “What this translates to is that the city is able to house its core workforce, but as people’s circumstances change, for example they become more prosperous or their family grows, they start to look elsewhere for larger homes.”
Effectively, the council was witnessing its residents moving to neighbouring boroughs as they got wealthier, due to a lack of suitable housing. “This creates an economic flow out of the city, which, back in 2010, we decided to address. So we looked at ways of getting people involved in building their own home as a way of increasing our higher-end housing stock,” says Brundrett
“We looked at how we could create an alternative housing offer, and it seemed that self build could offer a solution. Of course, back then the term custom build hadn’t even been coined,” says Brundrett.
In 2012 the council identified a site to bring on six serviced plots, together with the necessary infrastructure, which it could bring on to deliver against its executive housing need.
The council identified the Penkhull Farm site for its project, and tested the appetite with a small marketing campaign. “The response was incredible, with well over 100 people at the open evening. This gave the council members the confidence to back the project, as, although the council owned the land, we had to spend a considerable amount of money to bring it on,” he adds.
With 120 people interested, the council was concerned about how many could actually deliver, so it commissioned BuildStore to offer financial and building advice. This created a shortlist of 20 parties that were able to bid – and deliver – a plot, and a closed auction saw most plots go way beyond their £75,000 reserve – a figure that the council set to cover its costs. “Once they’d bought, the owners were committed to long-stop dates to get planning and start work,” says Brundrett.
“This was very much a self-build approach as although we acted as an enabler to bring the serviced plots to site, the purchasers were free to design and commission their own homes however they wanted,” says Brundrett. “Our planning colleagues were really supportive, so the remit for the Outline Planning Permission included plot size and build zone, but beyond this the owners had free rein to submit designs of their choice.”
Once handed over, work began quickly, with the first planning submitted within six weeks, and now the site is finished, with the exception of one owner who’s doing every piece of work himself.
The experience has identified elements that the council would do differently next time. “We’d originally considered appointing a project manager for the site, but dismissed it as not the best use of funds,” he says. “But my view is that as a council that’s sold the plots, we have a responsibility to the people who’ve bought them. Most people come to this sort of project with little or no prior knowledge of building, and there needs to be a buffer for them if something goes wrong. It’s in our interest to facilitate this process as we want our residents to have a positive experience.
“For example, liaising with service providers can be notoriously tricky, as it was on this site, and we wanted to help iron out any problems, rather than just let them fend for themselves. The same is true of co-ordinating site traffic and deliveries, so on our next developments we’re looking at appointing someone officially to make this easier for the residents.”
To do this, the council is considering factoring the cost of a project manager into the plot price, so it’s budgeted in from the start.
In 2014 Stoke City Council became a Vanguard authority, one of the 11 flagship councils chosen to pioneer the Right To Build with the creation of self and custom build registers. With this came £75,000 of funding, which has helped establish the register, and also to bring on further sites.
“Building on the success of Penkhull and the confidence its given the council members enabled us to identify a further three sites on land that we already hold,” says Brundrett.
Of these, two are self build sites that will follow the serviced-plot model used at Penkhull, and the other site, around 50 homes, is to be a custom build project, using one or two pre-selected developers, although nothing is finalised as yet.
“I see this site as hopefully working more along the lines of purchasers buying a plot, then working with a developer to choose a shell or turn-key, or a middle option where they choose from a pattern book of kitchens, fixtures and fittings, and so on,” he explains.
Stoke City Council also wants to engage more with the private sector and get them involved. “We’ve done it ourselves,” says Brundrett, “so we know it works in Stoke, and we want to start building partnerships with developers to help them bring on sites.”
In addition, he explains that in preparation for the new Housing and Planning Bill, the council needs to start thinking about its larger projects, so that the developers know that there will be a custom build expectation from the start. For example, this may be that they need to set aside a proportion of plots for custom build.
“We also see that the main developer on a site will be involved in ensuring it has a viable model for bringing on these homes. This could be a fundamental element to our planning policy under the new bill, although we’re still working on the details.
“But while some of the developers we’ve spoken to are really interested in custom build, many of the mainstream builders are waiting to see what the detail will be in the Bill. Right now, most of these volume builders have a profitable model, so they don’t need to review it until the legislation commences,” he adds.
As well as engaging with the private sector, the council also works with neighbouring authorities, and has liaised with the Hanley Economic, a local lender that independently has 300 expressions of interest. “While it’s a small mutual, Hanley Economic has been very supportive to us and helped us work towards bringing on more developments, and it’s an advocate of self build with its own self build product. Many pundits claim that finance is a major barrier to custom build growth, but our experience is that the mutuals have a lot more flexibility to bring on alternative financing for projects and should be considered.
For its next three developments Stoke City Council has launched a mini competition, effectively a tender process asking to see designs, layouts and planning statements for the sites. “But we’ve also directed interested parties to other custom build developers so that they can see what works for them, in the hope that they will propose effective models for each site. Although this will probably be a serviced-plots solution, we’re encouraging them to talk to various enablers so it’s more of an open conversation,” he says.
Stoke’s situation is atypical in that it’s using self and custom built as a wealth retention scheme by creating executive homes. The distinction between the self and custom build is often up for debate, although for most people the key element that makes a custom build project is having a third party developer involved in the scheme from the start. But one of the barriers to growth is the lack of finished sites to show people what can be achieved, and although Penkhull is more of a self build development, its serviced-plots approach makes it a great marketing tool for future schemes to demonstrate what can be achieved. Housing Minister Brandon Lewis certainly thought so on his visit last year.