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Sanctuary to bring all development in-house

Sanctuary Group aims to become the first social landlord to build all of its new homes through an in-house contractor.

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Sanctuary to bring all development in-house

The UK’s largest housing association plans to build 24,000 homes over the next eight years, the majority of them for homeownership.

In a landmark move, it intends to build up an internal management contracting arm with the aim of eventually building all 3,000 homes per year itself.

Housing associations typically engage private contractor companies to build out the vast majority of their sites.

The 100,000-home landlord’s ambition means it will effectively control a £400m-per-annum contracting business, as well as a housing association.

Peter Martin, development director at Sanctuary, said: “The intention we have is to build all 3,000 [per year] eventually. That’s not going to happen overnight, but it is something we will work towards.” He said he hoped the internal contractor would be responsible for building 1,500 units within three or four years, and then grow from there.

Of the 24,000 homes, 17,000 are expected to be for sale - a mixture of shared ownership, Help to Buy and some Starter Homes.

It will also build 2,000 affordable rent units as Right to Buy replacements, 3,000 market rented homes and 2,000 mixed tenure homes in Scotland.   

Sanctuary’s contractor - which it inherited from failed landlord Cosmopolitan - built only 50 of the 1,500 homes completed by the landlord last year.

Mr Martin said the main reason for the move was to ensure the landlord gains control of the building rate on sites which are led by sales.

“If sales are good we might want to speed up and if sales are slow we might want to take that right down to a drip,” he said.

He added that problems finding contractors and variations in quality were also drivers.

Currently, Orbit Group builds its market sale schemes through an in-house contractor and L&Q builds around 25% of its pipeline through Quadrant Construction.

Paul High, development director at Orbit, said: “We prefer to spread the risk. It’s a very competitive world out there, especially for technical staff.”

Stephen Teagle, managing director of affordable housing at Galliford Try, said a “mixed economy” strategy which included joint ventures and traditional contracting would be the best approach.


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