Taking a refreshed approach to Development by Alan Townshend
Wimbledon has been and gone, victory was sealed at the Ashes, the tube strikes are hopefully behind us and the weather seems to be back to normal… if all that wasn’t enough to excite us our Development team has been cooking up its own recipe of sizzling news for the summer…
The Group Board challenged us through the Corporate Strategy to build 2,500 new homes by 2020. Surely you might think that 500 homes a year is not an unreasonable target for an organisation with our financial strength and, on the face of it, you would be right in thinking that this is a very achievable target. Yet, in the current context, it’s an increasingly challenging one.
In London we’re still experiencing very high property values - the average home in London now costs more than £480,000!* This increase also applies to Shared Ownership homes with households now needing a combined income of more than £80,000 to be able to buy a home in many boroughs.
The position in many parts of the south east where we operate remains equally challenging, with property values still very strong.
With house prices remaining buoyant, land and construction prices have gone through the roof (excuse the pun) often by more than 30% compared to 2014 prices! Add into this mix the limited availability of land and contractors and you will, no doubt, get the picture of why this is a very challenging time to be building new homes.
So what have we been doing to give us a decent chance of success?
The Development team looked at why we weren’t winning new business and reflected on what is happening in the wider housing market. Together with our finance colleagues, we have made changes to our development appraisal model that will give us a more punch and a competitive edge.
We looked at where we should invest in land for future development. Central London is becoming too expensive and opportunities for large sites are both limited in number and hotly contested by all. As a consequence, we’ve agreed to look further east and south in London and aligned our ambitions with other infrastructure investments; such as Cross Rail and GLA Housing Zones, which will see housing investment included as part of wider area and community regeneration strategies. Outside of London, we’ll continue to look for opportunities in boroughs and regions where we have an existing management presence.
This refreshed approach has already produced results; we’ve managed to secure a number of new schemes and we’re well on way to achieving our goal of building 500 new homes this year. We’ve also purchased some sizeable sites, including one in Shoreham on the West Sussex coastline that has potential for 400+ homes and we have a number of other opportunities that we are homing in on - so look out for further updates this summer.
We’ve kicked off a brand new Development panel that will consider all new schemes in partnership with colleagues from customer services, finance and procurement working alongside the Development team. With all the teams working in close collaboration we will be able to continue providing quality and affordable housing options meeting the needs of our residents.
Returning to Southern Housing Group has proven a life changing opportunity for me and I’m really looking forward to playing my part in ensuring the organisation’s continued success. Enjoy the rest of the summer!