Richard Potts (Chartfield Homes) shared his findings on the change in the industry in this Then & Now article. He identified how there has been a loss of identity and the value of individuality since the last financial crisis.
He has detected 2 major trends in the house building industry:
- Housebuilders focusing on building only standardised product at higher volumes and on larger sites.
- Planning Authorities focusing delivery of housing numbers on larger sites in order to fulfil 5-year housing land supply requirements as quickly as possible.
The housebuilder focusing on larger sites has had the following consequences for the industry and customers alike:
- M&A activity within the housebuilding sector has shrunk the number of companies building homes.
- The majority of homes delivered are by a relatively small number of companies.
- The homes that are delivered tend to be standard product that often differ from company to company or region to region.
- Housebuilders are seeking to gain a competitive advantage in securing land, not by designing and building homes to higher quality and thereby selling them for higher prices, thus enabling them to pay more for the land they wish to buy. Instead, housebuilders are tending to cost engineer their homes to build them as cheaply as possible.
- Therefore, customers are faced with the combined issue of less companies building similar houses, to a formulaic and low-cost ideology.
All of the above has led to poor levels of customer satisfaction within the industry as a whole; frustration within planning departments and on the part of local residents as to the bland nature of the housing being delivered in their areas and a lack of diversity in the types of homes being delivered.
Planning Authorities’ focus on delivering a small number of larger sites – whilst a good way of boosting theoretical housing numbers in the shortest amount of time – has contributed to the situation, whilst not always achieving the desired result.
- Consenting larger sites will always favour larger developers due to their financial strength and buying power.
- Even on consortium sites where multiple developers are present, these will be from the small selection of national housebuilders.
- This small selection of national housebuilders will typically deliver similar homes, thereby further limiting creativity and choice.
- Planning Authorities do not favour smaller sites. Thereby making it harder for SME housebuilders to deliver homes.
- Larger sites take longer to deliver than ever predicted. This is due to the amount of background work required. This is in assembling landowners, delivering planning permissions that are implementable and the infrastructure associated with them.
All of the above means that we have a situation where SME housebuilders are delivering around 1 in 8 new homes built, this compares to 4 in 10, thirty years ago.
SME housebuilders need to build quality homes that differentiate themselves from their competition, this is how they can attract buyers that would otherwise go for the lower priced, part exchange assisted, lower quality product built by their larger competitors.
By building these homes SME housebuilders help in driving quality of design and build, customer choice, attractiveness of local communities and cohesion of populations within those communities, both new and existing.
The company, Chartfield Homes, are always looking for new sites to develop. They look for beautifully conceived and constructed homes that are far from ordinary. Chartfield Consulting are seeking new clients to assist in maximising the value of their landholdings.
Richard’s views and observations above are based on experience gained in the South and South East of England.
Read more of our Then & Now articles here.