How Vivid is keeping up with the sector’s big players on developing new homes

“We’ve not stopped in terms of making offers on Section 106 homes. Now, whether they’re then acceptable to the developer is a different thing,” Mr Shepherd notes, saying there has been a “correction” in pricing of these homes, and that the association also looks at the quality of the homes on offer.

“I think developers have become a lot more accepting that there isn’t this captive audience now that’s just going to bid against each other and buy whatever is coming on the market,” he says.

Also, he adds, it is now clear to developers that if the quality of the project isn’t at the right level, “there isn’t a price at which we actually will transact”. 

Vivid has also “increased the rate at which we’re on site and inspecting” Section 106 homes and land-led delivery, with quality in mind. “Regardless of the route that you’re buying those homes… that quality is absolutely key,” he says.

From housing officer to development 

Mr Shepherd’s own career has in large part grown with Vivid, the organisation where he has spent a lot of his career.

He left college and started his career effectively as a housing apprentice working for Test Valley Borough Council in Hampshire, across housing management, homelessness and repairs.

“When I finished college, I didn’t go to university, and so… I guess it kind of excited me, to have this role for two years with a bit of variety,” he recalls. “Working for a local authority in the built environment was the main attraction.” 

Mr Shepherd grew up in Southampton and most of his career has been “within an hour from home”, he says. 

After two years, he became a housing officer at Test Valley. He ended up doing distance learning and getting a housing qualification through the Chartered Institute of Housing.

“Who’d have known 30 years later it would suddenly come back to be hugely valuable, and save me quite a bit of time now,” he jokes, a reference to new requirements for senior housing managers to have housing qualifications.

The council went through a large-scale voluntary transfer to become a housing association, and “the opportunity came up to move into the newly formed development function. And I guess that really kind of lit the spark.” 

One of his first projects involved buying up an old pub and using the site to build homes.

“You can see the change that you were making. You’d taken this semi-derelict old pub building, it wasn’t a glamorous pub building by any means, and you turned it into a new block of apartments, and got to meet the people who [said], ‘This is home.’”

From here, Mr Shepherd briefly spent some time working in planning for the local authority, before joining the housing association Sentinel in 2008. Sentinel then went on to become part of Vivid, and Mr Shepherd rose up the ranks to become group development director.

“I think the opportunity to come back to an organisation that I know very well, and to be able to reinvigorate the development ambitions while taking on new responsibilities… was quite an attractive combination”

One of the projects Mr Shepherd is most proud of from the Sentinel years is the Chapel Gate development in Basingstoke, built in a joint venture with house builder Barratt. This was a brownfield regeneration that involved remediation of an art deco former manufacturing site. The project cost £95m, and delivered 618 homes.

“You can stand in our Basingstoke office and throw a stone at it, so it was hugely important for the area [and] for the organisation,” Mr Shepherd says.

Vivid was formed in 2017. “We just created this new organisation that was three times the size of the former Sentinel operation and needed a new kind of anchor development,” Mr Shepherd recalls.

The organisation identified a development in Eastleigh for roughly 1,000 homes, which became the Stoneham project. The development is mixed tenure, and includes a joint venture with Eastleigh Borough Council that resulted in the inclusion of 146 market rent homes.

Then, in 2023, Mr Shepherd left the organisation to go and work for investment manager Man Group. He took on the job of investment director working on its community housing project as the firm deepened its involvement in UK affordable housing, before the conversation with Vivid chief executive Mark Perry about coming back to his old employer.  

“Spoiler alert, I’m here,” he says, “I think the opportunity to come back to an organisation that I know very well, and to be able to reinvigorate the development ambitions while taking on new responsibilities around property and sustainability was quite an attractive combination for me to come back and do what I’m doing now.” 

We’re talking about development today, but a huge chunk of Mr Shepherd’s work is on existing homes. His team includes roughly 80 people working on development and around 60 on asset management. “We’ve got our new homes offer, we know what that looks like,” he says.

Still, he says, “the majority of our new customers don’t come in through a new home” and one of Mr Shepherd’s objectives has been to look at how to align “what that existing offer is with your new build offering”, and “some consistency in that offer of what a Vivid home is”. 

Exposure to challenges 

But back to development: how exactly has Vivid managed its strong performance?

Partly, it simply isn’t exposed to some of the major problems facing the sector’s traditional big players, in particular the bill for fixing building safety problems uncovered after Grenfell.

“We’ve not got significant HRB [high-risk building] exposure that others have,” Mr Shepherd points out.

Where the landlord does have buildings in need of remediation, he says, work is either finished or steps are already in place to get it done, “which has meant that we are able to focus on the finances and stick to our development aspiration, to build 1,500 homes a year”. 

Much of Vivid’s development programme is houses. “When you move out into the market towns and other parts of Hampshire, Surrey and Sussex, it tends to lean more towards two to three-storey housing.”

This means that for most of its programme, Vivid doesn’t need to contend with the Building Safety Regulator’s processes.  

This impacts Vivid’s exposure to the housing market through shared ownership and market sale.

“Most of what we provide will be two-storey houses in… that shared ownership offering, and the demand for that is crazy. We’ve got waiting lists. We finished the year with no unsold homes from our shared ownership programme, so it’s a really strong, positive tenure for us.”

“We’ve got waiting lists. We finished the year with no unsold homes from our shared ownership programme, so it’s a really strong, positive tenure for us”

This formula has worked for shared ownership, but it has not completely transferred over to Vivid’s market sale offer. “If you contrast it with the market sale exposure,” he says, “we seem to have lost all of the first-time buyers from the market.”

“We’ve only got 16 in the portfolio that aren’t sold, so we’re not talking big numbers on unsold homes, but if you look at the time, the period taken to sell is much longer in that market-facing activity than it is for shared ownership.”

This means Mr Shepherd agrees with the chorus of voices calling for supply-side interventions, and some form of “new variant” of Help to Buy.

For now, one of his focuses is on Vivid’s flagship regeneration project in Portsmouth Harbour, which brings in new challenges. Victory Quay includes 835 new homes, and this is mostly apartment blocks.

“We’ve got a number of HRBs, up to 12 storeys, planned on that development, because it’s responding to the site environment, the site context that we’ve had an ongoing housing shortage in Portsmouth,” Mr Shepherd says.

It is a “once-in-a-generation regeneration for the gateway into Portsmouth”. 

How about Vivid’s approach to the £39bn Social and Affordable Homes Programme? Homes England has asked organisations to re-profile their bids. Mr Shepherd says he “wasn’t personally surprised that it was oversubscribed”. 

Vivid was among those asked to re-profile. “We’re now obviously quite anxious to wait and see the outcome.”

There is a cost to delay, he notes. “The grant-funded programme only works if we know the grant funding is there, and otherwise we’ll do something different with those opportunities that we’ve got.”

The challenge for Homes England, he argues, will be looking at who is trying to get into its Strategic Partnership Plus tier, and assessing “how many have got a track record, who are then able to actually deliver at those sorts of volumes or can all can realistically ramp up to it”.

Vivid will be hoping that Homes England looks at its record over the past few years and draws a favourable conclusion. 

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