Firstly, when I refer to small housebuilders, I’m referring to the scale of the projects being undertaken, rather than the stature of those undertaking the building work. Secondly, this is a subject we covered back in November 2019.
Wolverhampton City Council recently posted an open opportunity for housebuilders to develop small former garage sites and small infill pockets of land in Wolverhampton, as it looks to deliver new council housing developments across the City.
This is not a huge brownfield site development of hundreds of homes in a single hit, aimed at only the largest of the country’s housebuilders, but a clever use of land within the city that will provide much-needed high-quality affordable housing and give SME housebuilders a boost.
The proposed development sites range in size from a single unit on Simmons Road, to the largest site of 7 units in Parkview Road, amongst others, with the contract valued at £4.6m to deliver a total of 36 units on 11 sites across the city – applications close on 18 September.
Although the City Council has said it intends to appoint either a Principal Contractor to deliver all the schemes as one contract through to completion, it is also prepared to appoint multiple Principal Contractors for the individual sites, which is a welcome and far-sighted approach.
Small scale housing development from the ground up
The Council is to be applauded in its efforts to build the required new homes. But to have demolished the unsightly garage blocks reminiscent of a bygone era, earmarked them for development and then open the contract to SME housebuilders, is a bold move and surely a blueprint for other councils.
Specifying a project in this way will streamline the planning and construction phases, whilst minimising the impact of the construction on the neighbourhood, which would face huge disruption if it were coping with a large-scale development.
The well-publicised quality issues associated with the biggest housebuilders, also plays to the strength of the smaller independent housebuilder and developer, who typically go the extra mile to protect their hard-won reputation, which directly affects their profitability.
However, the only small fly in the ointment for the Council, might be the problem of finding suitable small independent housebuilders, which have declined significantly over the last two decades. In 1998, 40% of new homes were built by independent developers, today it’s around 12%.
Development funding from the ground up
When alternative funders like Signature Property Finance step into the arena of development finance and offer a reliable source of funding, small independent housebuilders will have the assurances they need to create developments that make the most of small plots.
We recognise the need for experienced providers of short–term property finance, with a clear understanding of the market and the needs of independent housebuilders, to work with them to get the country’s housebuilding crisis under control. And quickly.
If you are considering just such a local scheme and would like to discuss development finance ground-up, with an experienced lending team, please get in touch with a member of the Signature team on 0121 746 3130. Jon Preston – Sales Director