Brian Berry explains how SME housebuilders could benefit from working more closely with the fast-growing self- and custom-build sector.
Many housebuilders and developers, especially those operating on a smaller scale, will have had at least some involvement with custom or self-build housing delivery. The Government is keen to expand the custom and self-build sector as part of its drive to diversify the housing market, support smaller builders and boost housing delivery.
To support this aim, the Government has put in place a series of policies that are collectively referred to as the ‘Right to Build’. The Right to Build package places a duty on local authorities to keep a register of those people who are looking for a plot of land on which to build a home, and a further duty to ensure there are sufficient permissions in place for serviced building plots in order to meet the demand on the Register. These are the two key elements of the ‘Right to Build’ idea, and together they have the potential to drive real growth in this still-emerging market.
The National Custom and Self Build Association (NaCSBA) has been one of the key forces behind the push to grow the custom and self-build sector. In order to support this drive, NaCSBA has set up the ‘Right to Build Task Force’. In the Government’s Housing White Paper, published earlier this year, Ministers gave their official backing to the Task Force and the Task Force then officially came into effect in June.
The Task Force aims to assist local authorities, community groups and small builders in delivering affordable custom and self-build housing projects. Over the next three years, the Task Force aims to help at least 80 organisations create more custom build homes. The Task Force is funded by the Nationwide Foundation, which aims to help increase the availability of quality affordable homes for people in need of housing.
The Task Force will particularly look to encourage projects whose approach can be widely replicated or which will deliver at pace or at scale. It will seek to match up experts with requests for assistance on, for instance, establishing and publicising area-based demand registers, sound policies to support custom build within local housing strategies and local plans, and advice on how best to bring forward particular projects and sites. This could include advice on development finance and undertaking site viability assessments.
This advice will not be available for free. It will be made available for an initial period of up to five working days at a discounted cost of £250 per day (plus VAT) for local authorities, other public sector organisations and community groups. It will then revert to £500 per day for longer periods. The Task Force has said that advice will be provided to private sector developers and small builder on a case-by-case basis and according to need.
The FMB believes that significant growth in the custom and self-build market will expand the opportunities available to many housebuilders across the country. Indeed, in the FMB House Builders’ Survey 2014, 89 per cent of SME housebuilders said that they saw potential for growth in the self and custom build market, and the same percentage said that they believed this growth would be good for their business.
This is a market which can provide many more opportunities for small contractors to engage in housebuilding, and can provide a potentially attractive new business model for some small developers to act, in whole or in part, as enablers of custom and self-build homes. In doing so, custom build could play an important role in creating new sources of supply by encouraging new entrants in to the housebuilding sector and generally boosting the health and diversity of our industry.
So far, more than 180,000 people across England have registered under Right to Build, with more people registering every day. All councils therefore need to be putting in place plans to meet this demand. Housebuilders should also be aware of the significance of this market and the policies in place designed to support it.
The FMB would encourage all housebuilders interested in this section of the market to engage with local authorities in their area, regarding how they can help deliver new obligations on this. And, if you have a solid proposal for a project you want to get off the ground, then the Task Force may be able to help.