LivEco in the Western Mail

Something has to change quickly in our housebuilding market

If anyone in Britain, let alone Wales, is going to come close to building the politician’s target of 250,000 homes in
the next 15 years then the market is going to have to change. No amount of political rhetoric will kick start a housebuilding programme of any shape, size, design or scale until the system that dictates the market is fundamentally addressed.

Why? Because right now there is very little incentive for independent house building development. Smalland medium-sized businesses are often descried as the back bone of the UK economy. Certainly the SMEs in Welsh construction are often feted as being the reason why we have such a positive industry and why the CEW Awards demonstrate so many
examples of best practice.

But the back story to their survival and the often painstaking progress towards delivering a development of their own is rarely told. Most SMEs figuring in CEW Awards are part of a larger whole; a key element within an integrated team driven by an enlightened client.

This is not the case in house building – the critical sector for Welsh people and the political weather vane for our industry.

Housebuilding in Wales and the rest of the UK is geared heavily in favour of the main six housebuilders. In the 1980s and 90s SMEs had a large proportion of the market, now the big six deliver upwards of 85% of our new homes. These homes are often very formulaic and not always the best quality finish. Indeed, the big six argue it is too expensive – particularly in Wales – to build low-carbon, sustainable homes of quality.

So, can small schemes of five to 10 homes be delivered by independent SMEs. Yes, but only if you have deep pockets. The system is not proportional and favours developments of scale but low quality homes. The background reports into issues such as ecology, highways, trees, archaeology, and conservation areas prior to planning and then planning itself might incur charges of say £5,000 per report for a five-house project. The charges for a development of 50 homes or more might be in the region of £8,000. The fixed cost for a plot reduces with scale – something more easily coped with by the major housebuilders and larger sites.

The process is stacked against developers such as our company. One phase of a project, say 21 buildings of one- and two-bedroom apartments and houses, might require 18-months of research, reports and planning and around £200,000 before any site work starts. This is anti-development.

Worse, the actual valuation process – ie. a prospective buyer obtaining a mortgage – works against the private developers designing and building the homes demanded by Welsh Government. The lending system sees low-carbon buildings with features such as a green roof or walls that are not brick as a risk. Mortgage providers generally seek a fast, risk free conveyancing process – ‘new’, innovative designs do not fit their criteria, that are often assessed by drive by surveyors working to tight schedules and demanding targets.

The ‘system’ works against any idea of quality, sustainable design and exciting, stimulating architecture. In 15 years Wales and the UK will have the same arguments about its housing. If new homes are built in any numbers then they will be of little variety, minimal low-carbon performance and certainly not delivered by small and independent house builders. Indeed, possibly within five years small house builders will cease to exist and we will have moved to a market producing standardised, hermitically-sealed ‘Noddy’ boxes.

This has to change now. But that change is unlikely to come from the industry due to too many vested interests. This could be a government issue, but it cuts across all political, national and council boundaries. The politicians and the industry have to come together and recognise their own failings and try to promote high-quality, varied architecture from SME developers and builders.

It is up to all of us to change the system within which we operate, otherwise Wales will have very poor-quality and deeply unimaginative homes to live in for the foreseeable future.

– Western Mail, Wednesday 26th October 2016