Making a housebuilding splash

Originally posted on insidehousing.co.uk on May 14.

The entry into the UK market of an overseas company that last year built almost as many homes as Barratt, Taylor Wimpey and Persimmon combined is by any standards a big deal.

That’s even before you add what looks like a major step forward for modular building in the UK and one of the most eye-catching individual investments yet by the self-styled disruptors at Homes England.

The £90m deal involves Sekisui House, the biggest housebuilder in Japan, taking a 35% equity stake in Urban Splash’s modular House business. The Manchester-based developer will retain 60% with Noel McKee, one of its existing investors and founder of We Buy Any Car, taking what’s described as an incremental 5% stake

Homes England will take a 5% stake worth just over £3m in the company and will also be providing a £27m loan from its £4.5bn Home Building Fund.

Sekisui House built almost 44,000 new homes last year, almost 5% of all those built in Japan, where new build numbers and demolitions alike are much higher than in the UK.

Read the rest of this entry »

Advertisements

The implications of the leasehold scandal

Originally published on March 19 as a blog for Inside Housing.

The leasehold scandal will have far-reaching implications for housing that will be felt well beyond the major housebuilders with whom it began.

A report published by the all-party Housing, Communities and Local Government Committee on Tuesday takes as its starting point the doubling ground rents and onerous contract terms faced by buyers of new homes who it says were treated ‘not as homeowners or customers but as a source of steady profit’.

And it also highlights the issue of leaseholders facing huge bills to remove and replace combustible cladding raised in its work on fire safety.

But this report goes well beyond those recent high-profile problems with leasehold and poses some fundamental questions about a tenure that only exists in England and Wales – and they are ones that will require answers by social landlords as well as private sector housebuilders and freeholders.

Read the rest of this entry »


Housing in the Spring Statement

Originally published on March 13 as a blog for Inside Housing.

With Brexit dominating everything, the Spring Statement seems at first glance to be just as underwhelming as the chancellor hoped when he moved the main Budget event of the year to the Autumn.

The most eye-catching details from usual array of announcements and re-announcements on housing includes are £3bn Affordable Housing Guarantee Scheme to support 30,000 homes and a proposal to ban fossil fuel heating systems in new homes from 2025.

But to add to the sense of Brexit drift, the first re-introduces a coalition scheme that lowered borrowing costs for housing associations but was abolished in 2015 while the second does something to address climate change but will be arriving nine years later than the zero carbon homes that were scrapped by the coalition.

Read the rest of this entry »


It’s not just about Help to Buy

Originally posted on February 28 as a blog for Inside Housing. 

All the headlines this week are about Persimmon and Help to Buy but the issues with housebuilding are much bigger than either.

Yes, Persimmon is the most extreme example of the gains made on the back of state intervention, with profits of £1 bn and margins of over 30% to go with those huge executive bonuses that made it the poster child for corporate excess in the industry.

And, yes, Help to Buy supported almost half of its 13,341 private completions in 2018 and a major part of the rest of the industry’s output.

Public and media outrage has now reached the point where ministers feel they have to act and housing secretary James Brokenshire let it be known over the weekend that he has ‘become increasingly concerned by the behaviour of Persimmon in the last 12 months’.

Read the rest of this entry »


Coping with climate change

Originally published on February 21 as a blog for Inside Housing. 

Remember when England was going to lead the world on zero carbon homes?

Three years after that was meant to happen, a report published today (Thursday) by the government’s independent advisor on climate change reveals that instead we are going backwards.

The Committee on Climate Change (CCC) warns that ‘UK homes are not fit for the future’, with progress stalled on reductions in greenhouse gas emissions and efforts to adapt the housing stock falling far behind the risks posed by higher temperatures, flooding and water scarcity.

Improving the quality, design and use of homes will not just address the challenges of climate change, it says, but save people money and improve health and wellbeing, especially for vulnerable groups like the elderly.

Many of today’s headlines were generated by its recommendations that would mean no more gas boilers and hobs, with no new homes connected to the gas grid from 2025 .

However, the report as a whole has multiple and far-reaching implications for new and existing homes if the UK is to meet its legally binding target to reduce carbon emissions by at least 80% of 1990 levels by 2050.

Read the rest of this entry »


Parker Morris and Homes for Today and Tomorrow

Originally posted on February 19 as a blog for Inside Housing.

Listening to a new Radio 4 documentary about Parker Morris and space standards it is impossible not to feel a mix of nostalgia for an era of housing optimism and sadness that our ambitions have shrunk so much since.

As John Grindrod relates in Living Room, the title of the 1961 report was an indication that it was about much more than just a technical exercise in allocating space per person.

Work on Homes for Today and Tomorrow started 60 years ago this year but it was building on a 20th century council housing tradition that began 100 years ago and it was also looking to the future to ensure that homes were fit for it.

‘A good house or flat can never be made out of premises which are too small,’ said the report, which set out a much greater ambition for new homes:

‘An increasing proportion of people are coming to expect their home to do more than just fulfil the basic requirement. It must be something of which they can be proud and in which they can express the fulness of their lives.’

Read the rest of this entry »


The 300,000-home question

Originally published on February 11 as a blog for Inside Housing. 

Can the government meet its target of 300,000 new homes a year by the mid-2020s?

The target was announced to some scepticism in the 2017 Budget and a report just out from the National Audit Office (NAO) says with some under-statement that it will be ‘challenging to meet’.

In detail, the Ministry for Housing Communities and Local Government (MHCLG) commitment is to ‘support the delivery of a million homes by the end of 2020 and half a million more by the end of 2022 and put us on track to deliver 300,000 net additional homes a year on average’.

That means net additional homes so it includes conversions and change of use (less demolitions) as well as new building.

Statistics showing a 78% increase in homes on this measure since the low point of 2012/13 (from 125,000 to 222,000) certainly suggest that it is possible.

However, recovery from the credit crunch is one thing, an increase from more normal times quite another, and the annual increase slowed to just 2% in 2017/18.

Read the rest of this entry »