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Top 50 Biggest Builders survey

The biggest landlords are eyeing ever more ambitious development plans. But are these translating into homes on the ground? Our Top 50 Biggest Builders survey finds out.  Illustration by Peter Crowther

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Revealed: the sector's top 50 biggest builders

If this year’s development survey proves anything, it’s that uncertainty can be the enemy of progress.

Inside Housing has been tracking the delivery of new housing development, as well as the pipeline, for the UK’s biggest housing associations. This time last year, we revealed a 20% drop in the number of homes being delivered by the 50 biggest builders in the sector, with a number of mitigating factors cited.


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For one, social landlords were adapting to a very different environment, ushered in by the 2015 Budget and the surprise of the 1% rent cut that came with it. But the feeling was that last year represented a low water mark for building.

Fast-forward 12 months, however, and this year’s Top 50 Biggest Builders (see table opposite) have built even fewer homes.

There has been a 3.4% drop in the total number of homes completed by the landlords that make up the Top 50, falling from 31,988 to 30,875. While that is not a disastrous result by any means, this is less than the roughly 34,000 homes associations predicted they would build and is the second year in a row in which uncertainty has had an effect on the numbers. The additional uncertainty can be summed up in one word: Brexit.

“I have different feelings about the market ever since the Brexit result,” says Elaine Bailey, chief executive of 50,000-home Hyde Housing. “I feel more anxious than this time last year, and it is largely about uncertainty.”

Our survey shows that Hyde itself is one of the landlords to have scaled back development in 2016/17. It built 465 homes compared with 728 in 2015/16, dropping from 12th in our table to 24th.

“When the Brexit vote happened, we paused for a bit,” continues Ms Bailey, explaining why there has been a drop in numbers.

“We wanted to see if it would be a real shock to the system. We raised the threshold for what would be a viable scheme.”

So has Brexit thrown yet another spanner in the works, or is it more of a blip?

A closer look at the figures suggests the latter. That is certainly the case for Hyde, which expects to complete 1,100 homes in the current year, placing it ninth in terms of the size of its immediate pipeline.

Overall figures for the pipeline, sector-wide, also paint a positive picture. The Top 50 ranked by how many homes they expect to complete in 2017/18 will – if their projections prove accurate – add 38,005 to the nation’s stock, almost 11% up on 2016/17’s prediction. Sites are secured on 91% of these, which is another good portent.

Top 50 Biggest Builders: Completions

2017 rank2016 rankHousing associationNumber of homesHow many new homes of any tenure did you complete from 1 April 2016 to 31 March 2017?How many were for social rent?How many were for affordable rent?How many were for an intermediate rent product?How many were low-cost ownership homes?How many were market sale?How many were private rent?How much did you invest in building these homes?How much of this was government grant?
11L&Q75,3202,247515170186447686243£742,600,000£74,300,000
22Orbit (1)41,1861,78853451605052100£250,000,000£7,000,000
37Places for People189,3381,519295193015279881Not suppliedNot supplied
45Clarion (2)125,0001,33516664023951290£248,000,000£10,000,000
510Sovereign56,4631,22520853103874545£173,240,000£7,600,000
621Home Group53,4001,1040663591851970£191,000,000£9,800,000
74Notting Hill32,7991,049454110379100114£273,000,000£26,600,000
828Waterloo26,8001,02718739026208£121,239,000£18,978,000
934Metropolitan37,8318322230203002080£107,879,833£11,483,688
1013Aster Group28,73182718922003111070£125,002,000£3,018,000
1115Riverside52,595792040601222640£111,000,000£5,000,000
1223DCH23,579768965528317413426£83,000,000£8,000,000
136A2 Dominion36,79275425297071179182£266,320,317£10,389,340
1417Stonewater31,99271750500016700£100,000,000£5,000,000
1522Family Mosaic25,85067515515502401250£161,992,855£13,616,000
1629Great Places18894625043701452815£72,300,000£11,925,000
1725Wrekin Housing Trust13,33361450475276200£78,000,000£13,000,000
17 Thames Valley15,830614126518614813568£61,600,000 (3)£2,543,000
19 VIVID (4)29,811610373670180260£108,000,000£4,800,000
2011Guinness Partnership65,000574101344056730£110,492,294£15,705,388
2139One16,950568025109021314£186,349,552£5,616,528
2238Fortis Living15,775525227182011600£72,400,000£1,200,000
2326BPHA (5)18,186515451938191140£66,200,000£13,229,600
2412Hyde50,00046558134012410742£272,500,000£6,287,378
2527Bromford28,53546082212016600£64,900,000Not supplied
2619Adactus13,0004554936903700£60,000,000£8,000,000
278Peabody29,150426121901985264£116,000,000£6,000,000
2833Network19,920425103171085660£108,000,000£2,400,000
29 Radian21,38941810266389680£57,435,130£5,758,372
3016Moat20,37740611213018200£67,000,000£8,108,546
3031Longhurst18,952406926210014660£40,800,000£576,436
3224Paradigm14,2314033810801521050£63,000,000£356,000
33 Southern28,000393408701694948£110,000,000£5,700,000
34 Karbon Homes (6)23,79938702343710970£36,800,000£7,570,000
35 WHG20,28937747244043043£35,000,000£4,200,000
3641Saffron6,0113291826824100£26,000,000£602,000
37 Link Group11,2803282020873900£34,912,390£15,812,149
3844Yorkshire Housing15,901322451361132800£46,134,289£4,767,900
3949CHP9,4063193211082230£48,646,004£1,171,750
39 Hillcrest5,602319223960000£35,000,000£16,700,000
413Sanctuary99,48131872144031710£64,871,760£8,504,247
4248EMH19,0003032523304500£36,354,866£4,525,439
43 Liverpool Mutual Homes15,340299028701200£34,845,780£6,479,332
44 Cross Keys Homes10,67029858110013000£34,900,000£773,150
449Wheatley82,000298231670000£32,100,000£13,100,000
46 Stafford and Rural Homes6,0532905317706000£24,000,000£4,970,000
47 United Welsh5,6502892351503900£19,300,000£5,200,000
4845ThirteenOver 33,0002840218033320£35,000,000£5,000,000
4946Viridian (7)16,0002810650179370£36,000,000£1,850,000
5049Nottingham Community9,247273022305000£32,644,591£6,009,428

Big ambitions

While the pipeline shows a decent uptick for the current year, there could be an explosion in development in years to come if the ambitions of some of the biggest players are anything to go by.

L&Q once again tops the charts, both in terms of its 2016/17 development numbers (2,247) and pipeline for the current year (2,163), helped in part by the 75,000-home landlord’s merger with East Thames.

But development director Jerome Geoghegan says that this year’s flatlining numbers represent “a bit of a lull” given L&Q’s transformative plans to build 100,000 homes in a decade.

“We set out to increase output and that’s what we are doing,” he tells Inside Housing. “We have a commitment to growing our pipeline both directly and through the merger with East Thames. We have a good platform to sustain that growth.”

Mr Geoghegan admits his surprise that overall numbers have fallen this year: “I would not have expected an acceleration but I would not have expected numbers to drop. People have been demonstrating growth ambition.”

He agrees that Brexit may have created “greater market uncertainty”, particularly with regard to the private sector element of associations’ plans.

That view is borne out by the data.

While there was much made last year of increasing proportions of both market sale and private rent homes being built by housing associations, those two tenures experienced the sharpest declines this time round. There were 4,234 market sale completions by the top 50, a fall of 16% on 2015/16, while private rent completions fell by a whopping 39% to stand at fewer than 1,000 units.

Investment cycles

Some of the drop-off in development numbers is purely a product of investment cycles. Last year, the end of the 2011/15 Affordable Homes Programme – the so-called ‘drop dead date’ – was widely cited as part of the reason for a 20% drop in overall build numbers. And with developing housing associations having rushed to complete homes to secure funding, they can take some time to build a head of steam as the next funding cycle kicks in.

That is particularly true for associations working on large-scale projects, according to Hyde’s Ms Bailey.

“For us, we are doing less Section 106 than we have done in the past and we are doing larger schemes,” she explains. “So the overall number of units is larger and takes longer to build up.”

Even one of those landlords to have markedly improved its position in our table – Metropolitan – admits that the unexpected political shocks of the past 12 months have made life difficult. The London-based association more than doubled the number of homes it delivered in 2016/17, from 371 to 832, and climbed from 34th position into the top 10 in the process.

Executive director of development Linda Robinson says the 37,831-home landlord wants to increase its build numbers to 1,000 a year by 2018/19 but is aware of an increasingly difficult environment. “Looking to the future, the market looks more challenging than in recent years, particularly in London, where there have been concerns about the impact of Brexit and warnings about supply imbalance.”

Climbing the table

Other new members of this year’s top 10 are Aster Group, Waterloo Housing Group (another to more than double its completions), and Home Group. Clarion also entered the table for the first time – a product of the sector’s biggest-ever merger between Affinity Sutton and Circle.

Brian Ham, executive director for development at 53,400-home Home Group, agrees that much of the movement both ways is cyclical. “Last year was low because we were reorienting our strategy,” he explains. “We took stock and looked at what we needed to do in the future.”

Mr Ham also believes that Home’s financial position has allowed it to reinvest in new building programmes: “It boils down to gearing levels [the ratio of debt to capital]. We are really lowly geared compared with many others in the sector. We have gearing of 50% so we have headroom and borrowing capacity.”

Mr Ham describes Home Group as among “that pack of aggressive developers behind L&Q”. But while some are raising their ambitions, there are also some big names that have fallen away from the top of the table this year.

Sanctuary Group and Wheatley Group were both members of the top 10 last year but have fallen to 41st and 44th= respectively this year.

“I would not have expected an acceleration but not have expected numbers to drop.”

Jackie McIntosh, Wheatley’s regeneration manager, says it delivered fewer completions in 2016/17 because it had seen “a slightly longer lead-in time for acquiring sites, securing statutory consents, securing planning permission and so on”.

“That is partly due to the huge increase in affordable housebuilding across Scotland,” she states.

“However, our development activity is actually increasing. In 2017/18, Wheatley will have more than 1,000 homes on site – our highest ever number.” (See box: Scottish providers in the Top 50).

Genesis, meanwhile, has dropped out of the top 50 entirely, having been placed 18th last year. In 2015/16, Genesis built 631 new homes. This year, that number fell to under 200.

Some of that change can be put down to the last-minute collapse of the housing association’s merger with Thames Valley Housing – a deal whose collapse would surely have had an impact on any future business planning.

However, Jeremy Stibbe, executive director for assets and investment at Genesis, echoes Hyde’s Ms Bailey in insisting 2016/17 is a blip.

“The completion figure was entirely a cyclical thing,” Mr Stibbe tells Inside Housing. “Development ebbs and flows, [but we] are committed to growth and to building new homes.”

Mr Stibbe says Genesis is on site with more 2,500 units currently, but “because they are larger schemes” these will take longer to complete.

Looking at overall numbers across the sector, he also thinks that 2016/17 may end up proving to be the low point before an upswing in the figures. “Planning approvals and starts are showing that it will go up again,” he adds.

Busy pipeline

Certainly, the figures Inside Housing has gathered on starts would back up that assertion. Starts among the Top 50 in 2016/17 totalled 39,362, 20% up on 2015/16’s figure of 32,686.

Genesis started on 474 homes in 2016/17, while the other major fallers also showed signs of ramping up development. Wheatley started 713 homes, while Sanctuary started 624.

While only eight housing associations achieved more than 1,000 completions in 2016/17 (the same number as last year), 11 made more than 1,000 starts in the same period. Indeed, both Notting Hill and Sovereign join L&Q in the 2,000-plus starts club.

A number of developing housing associations talk of long-term development programmes which are either just underway or about to start. Our pipeline data suggests the trend could be an upward one.

That said, there was a good degree of optimism around this time last year. With the housing market, and indeed the world, no less uncertain than 12 months ago, there could still be a few bumps in the road.

 


Scottish providers in the Top 50

One of the stories flying slightly under the radar in this year’s development survey has been the performance of Scottish housing associations.

Three found their way into the Top 50 for completions in 2016/17, marking a significant upturn particularly in sub-market rent products north of the border. Take 11,280-home Link Group, 37th in the table with 328 new homes, and 5,602-home Hillcrest, which built 319, placing it equal 39th, were new entries. The latter grew its stock more than any other UK association (see table). It was made up entirely of social and affordable rent units, with more than two-thirds social rent. To an extent, this reflects the different funding regimes in England and Scotland.

Strangely, the largest Scottish landlord (and until recently the largest in the UK), 82,000-home Wheatley, was one of the biggest fallers. It built only 298 homes in 2016/17 compared with 983 in 2015/16. Wheatley’s regeneration manager Jackie McIntosh says the fall is down to “longer lead-in times for acquiring sites, securing planning permission, appointing contractors and so on”, adding that some of this was “due to the huge increase in affordable housebuilding activity across Scotland”.

She says that Wheatley will have many more homes under construction in 2017/18, its highest ever number, with plans to increase its completions to more than 1,000 in the coming years.

The signs are there that Wheatley’s 2016/17 performance was an anomaly in terms of completions.

Our survey shows that the association started on 660 homes in the year, putting it firmly back in the top 25.

Elsewhere, Wales also had a landlord in the top 50 in terms of completions, having missed out last year; 5,650-home United Welsh delivered 289 homes, placing it 47th.


 


In numbers

3.4%

Fall in the total number of homes completed by the landlords in the Top 50

16%

Fall in the number of market sale completions compared with last year’s figures

20%

Rise in the number of starts among builders in the Top 50 since 2015/16


 

Top 10 housing associations building the most for market sale

Housing associationIn 2016/17 (1 April 2016 to 31 March 2017) how many new homes of any tenure did you complete?How many were market sale?
Places for People1,519798
L&Q2,247686
Riverside792264
One Housing568213
Orbit1,788210
Metropolitan832208
Anchor Trust204204
Home Group1,104197
A2 Dominion754179
Gentoo Group233163

Top 10 housing associations increasing their stock the most

Housing associationNumber of homesIn 2016/17 (1 April 2016 to 31 March 2017) how many new homes of any tenure did you complete?
Hillcrest5,602319
Saffron6,011329
United Welsh5,650289
Hightown5,386264
Stafford and Rural Homes6,053290
Wrekin Housing Trust13,333614
Orbit41,1861788
Thames Valley15,830614
Waterloo26,8001027
Adactus13,000455

Top 10 housing associations building the most social rent homes

Housing associationTotal completions from 1 April 2016 to 31 March 2017How many were for social rent?
Orbit1,788534
L&Q2,266515
Places for People1,519295
United Welsh289235
Wheatley Group298231
Fortis Living525227
Hillcrest319223
Sovereign1,225208
Link Group328202
Aster Group827189

Top 50 Biggest Builders Pipeline

2017 ranking (2016 ranking)Housing associationHow many homes do you expect to complete in 2017/18?How many of these do you have the site secured for (ownership or options)?From 1 April 2016 to 31 March 2017, how many new homes of any tenure did you start?How many homes do you expect to complete between 1 Apr 2017 and 31 Mar 2019?How many of these do you have site secured for (ownership or options)?How many do you expect to be Section 106?How many homes do you expect to complete between 1 Apr 2019 and 31 Mar 2021?How many of these do you have the site secured for (ownership or options)?How many do you expect to be Section 106?
1 (1)L&Q2,1632,10128109,1504,1422,7718,6205,8411,127
2 (3)Orbit1,9011,80119852,8962,4241,6171,337703859
3 (4)Places for People1,8691,86914775,6304,7161,5505,9653,5691,372
4 (7)Sovereign1,4151,17121983,0291,9242,2713,1164722,337
5 (5)Home Group1,4001,2435013,1002,9351,0004,3002,124860
6 (new)Clarion1,3271,32718633,3283,3281,5178,5993,3442,463
7 (8)A2Dominion1,2001,2008682,4002,400Nil2,4001,440Nil
8 (10=)Aster1,13993710112,4921,6941,2282,8421,1231,590
9 (32)Hyde1,1001,10019493,1122,5031,3823,0001,783325
10 (8=)Riverside1,0321,0324932,111c1,3004202,523c500c500
11 (new)Sanctuary Group1,0001,0006242,000Undisclosed (1)Undisclosed (1)6,000Undisclosed (1)Undisclosed (1)
12 (20)Bromford9897247782,1251,0221,5812,105731,129
13 (18)DCH9668009892,1001,1971,0982,2902251,288
14 (23)Adactus8788784201,298c1,0381678800180
15 (new)Network Homes87157112351,8121,0954032,2231,198595
16 (new)VIVID8027717691,6981,3438442,40010511,200
17 (new)Catalyst Housing748748662533533120826826202
18 (new)Thames Valley7477475671,0089364001,800583500
19 (33)Hightown7316966521,34289682970018400
20 (17)Metropolitan70670614291,7821,6913311,8821,494353
20= (14)Wrekin Housing Trust7067064588818812381,120901400
22 (12)Waterloo6936809211,7651,357601,368193
23 (30)Wheatley6606607131,7561,756221 (2)1,5631,388200 (2)
24 (6)Notting Hill64264223092,0102,0103264,1753,937754
24= (16)Stonewater6425885391,3001,0127501,35987680
26 (31)Walsall Housing Group6405584601,1504535261,061129249
27 (27)Longhurst6024386001,2026927261,200231600
28 (26)BPHA60007071,2318259501,245500950
29 (28)Guinness Partnership5875872931,500c900TBC3,000c700TBC
30 (29)Radian5755047421,1358849501,120258850
31 (22)Cross Keys5734105901,1047311,013903302596
32 (25)Paradigm5335334831,1337764531,200250480
33 (13)One5244966921,1341,029386772219169
34 (new)Fortis Living5203505691,0006007501,000100650
35 (new)Yorkshire Housing5005001657116844171,250684600
35= (new)Together5003967211,0004542001,00050200
37 (24)Moat4994745151,1328266821,2001,200259
37= (2)Genesis4994994741,1281,0721092,3691,722483
39 (35)Southern49446441667164116684873793
40 (new)Wythenshawe Community423423043143101671670
41 (15)Family Mosaic4184145131,4931,4585682,1581,705411
42 (50)Grand Union39036351159847743424967249
43 (new)EMH Group387257339777362200800175200
44 (new)Viridian/AH(3)3863868371,569c784c4712,250c750c675
45 (37)Saffron367367243445445368709512444
46 (44)CHP35026525375045145095079570
46= (new)WDH350247209900366 (4)3201,800154900
48 (new)Nottingham Community3473103227034121226005114
49 (new)Futures30926327460030060600060
50 (new)New Charter Group3053052146002110175500
Totals38,00534,50739,36284,75560,39731,445102,01943,66529,016
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