It is no secret that the UK is facing a severe housing shortage. Faced with unprecedented population growth, the industry is playing catch-up to provide the vast number of homes needed. But it is falling further and further behind.
The industry is also facing several headwinds that have the potential to derail the housebuilding effort even further. The labour market is one such headwind. The number of people retiring from the construction sector every year far outnumbers the number entering it as trainees. Put Brexit into the mix and it is a recipe for disaster.
We also have to factor in construction costs, which seem only to be rising, as well as the ever-present risk of contractor and subcontractor insolvency, which was highlighted by the demise of Carillion earlier this year.
For this nation to hit the housebuilding mark, the industry needs to start thinking innovatively.
At Swan Housing Association, innovation is in our DNA. That is why we were the first housing association to significantly invest in modular construction and open our own factory to produce precision-engineered modular homes.
The 75,000 sq ft facility in Basildon, Essex, will be capable of producing 400 to 500 homes a year using cross-laminated timber when at full capacity. Late last year the first modular homes were delivered to our Beechwood scheme - a real milestone for us.
As Mark Farmer's Modernise or die report so starkly highlights, the construction industry needs to evolve. We recognised that offsite construction could deliver high-quality homes more quickly to Beechwood where bad weather and failing subcontractors had previously slowed delivery.
With our secured development pipeline of 6,500 homes, we can make sure that the factory always has a healthy order book to harness the benefits that offsite construction can bring - namely time savings of 50% to 60% and cost savings of 10% to 15%. We can deliver quickly and efficiently and control the quality.
But Swan's innovative approach doesn't stop there. We are offering prospective residents at Beechwood the chance to customise their homes. Of the 570 homes planned for the site, 250 private sale homes will be fully customisable by the buyer. Our online configurator allows buyers to choose from some 1.25 million permutations including external materials and internal configurations.
We are giving buyers a Grand Designs-type experience without the hassle of doing the build themselves. It also gives us a chance to upsell - offering underfloor heating, wine fridges, enhanced finishes and so on.
The idea came about off the back of an attitudes to homebuying survey, which found about 80% of buyers would not buy a brand-new house because they all looked the same. If we can address that concern then we'd be on to a winner. What it will do is create a neighbourhood that is diverse where no two houses are exactly the same. The experience will be very similar to buying a new car.
You can choose the specification and calculate the price online.
This flexibility is only possible due to the factory manufacturing process. We have a target of delivering the home to the buyer 16 weeks after the order is placed. We will start marketing these customisable homes in April and we're sure it will create a buzz and raise the profile of offsite manufacturing to a wider audience.
Of course, these private for-sale homes provide us with the means to deliver our core business strategy - building more affordable homes. In fact, we were one of the first housing associations to recognise that to be able to build quality affordable housing, and be in control of placemaking and other important factors involved in creating a community, we needed the balance sheet to be able to secure our own plots of land and not just buy section 106s.
Innovative thinking
We set up our own subsidiary to build private houses for sale about 13 years ago with all the profits going back into delivering affordable housing. Now the majority of the houses we build are for private sale. Our model will see us generate more than £250m by 2027, which will be reinvested in delivering homes and services for our residents.
Innovation flows through our veins and 10 years ago we set up our own in-house contractor - NU living - to build some of our schemes in a bid to increase and improve efficiency. It has given us more control over our projects, which gives us the ability to respond flexibly to changes in the market. We have reduced delays caused by third-party suppliers and contractors because our dedicated team is in control.
We have an ambitious target to deliver 10,000 new homes by 2027. As well as the Beechwood scheme, which will transform the 1960s-built Craylands estate in Essex, we also have some very important regeneration projects in the pipeline.
Late last year the first modular homes were delivered to the Beechwood scheme
At Blackwall Reach, we will deliver a £300m scheme in partnership with the London Borough of Tower Hamlets and the Greater London Authority that will transform a key area in Poplar by 2024. An additional 1,248 homes will be built in a borough that has an acute housing shortage. More than 50% will be affordable, with 80% of those for social rent.
In Barking, we have brought two stalled sites together and will build four iconic cylindrical towers designed by Studio Egret West. In partnership with the London Borough of Barking and Dagenham, the NU living team will build 290 homes on the site, 40% of which are already sold off-plan.
Demonstrating our unique skillset, and a combination of all our innovative approaches, we have also secured unanimous planning permission for a transformative regeneration project at Laindon Place.
A succession of previous owners has tried to regenerate the site, but we are now pressing ahead with a new retail-led high street that will also include a health centre and a new office for Swan. By using our in-house contractor and modular methods of construction as well as investing all profits back into social housing, our plans will finally deliver a viable scheme that meets local aspirations.
A constant theme throughout our portfolio is the ability to forge relationships with key stakeholders and councils to ensure delivery. That's no different at the planned £1bn regeneration of Purfleet on Thames. Working in partnership with Urban Catalyst as Purfleet Centre Regeneration, we will work with Thurrock Council to deliver a new town centre with retail and leisure space and up to 2,850 new homes, an integrated medical centre, improved transport infrastructure and a new primary school as well as film and TV production studios and a new university campus.
Innovation is in our DNA and our chief executive John Synnuck, who this year celebrates 50 years in housing, is clear that social purpose, delivering homes and services, will continue to underpin everything we do. To deliver that social purpose we will continue to look at new ways to grow and innovate to help deliver the homes the country so desperately needs.
Geoff Pearce is executive director of regeneration and development at Swan Housing Association
Original link - Property Week
