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The development challenge means we must use all the tools at our disposal
Scaling up development brings challenges, which means we are having to adapt, writes Sam Stone
Having set ourselves a corporate strategy target to deliver 3,500 homes by 2023, we’re using all of the tools at our disposal to make sure we’re set up to achieve this.
To meet this target, we’re aiming to build 750 homes per annum, and that means diversifying from the traditional Section 106 method. In a short space of time we’ve significantly increased our pipeline via land-led and joint venture initiatives, and this will only continue as we look to deliver more homes.
Having worked in the private sector, I know there are many different challenges to delivering new homes at scale. For housing associations, these challenges are amplified.
We could build as many homes as we like, but naturally the bit that holds us back is the competition from house builders, as well as large registered providers that have consolidated to increase their size and are therefore eligible for greater funding from Homes England.
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The private sector is all about delivery – established house builders have massive technical, commercial and production teams that can keep build costs down. They have the infrastructure in place to get the cheapest costs and be competitive – this is the key area holding us back.
However, where we might be less competitive with build costs, we do have lower margins, taking profit only on the costs of open market homes.
Culturally, the two sectors are structured differently but our sector offers good pay brackets and rewarding careers. We can look at land opportunities and say, “do you know what, we can deliver this better as affordable housing” and we have the ability to do so.
Undoubtedly we will see more joint ventures, as organisations share risks and rewards. There is so much opportunity for this partnership approach at the moment, particularly as the private sector is being pushed to make better use of its financial resources, while housing associations can be an ideal investment partner.
Ultimately, though, we need to see more grant funding. If we receive more grant, we will deliver more homes – it’s as simple as that.
For example, could grant funding be applied to Section 106 schemes where housing associations are looking to deliver the entire site? If we’re going to build the homes the country needs, it’s time to open the discussion up more widely.
Sam Stone, assistant director of land and planning, Radian Group
