Located in the beautiful Sussex countryside is this major development of 160 new homes. V10 was instrumental in acquiring the land from a promoter then sourcing the build contractor to deliver a package deal to Optivo.

The scheme is now being comprehensively advanced with the target of creating a successful sustainable community aligning with V10’s objectives. This is the second large development delivered in the market town of Hailsham to a Registered Provider, this first being a scheme of 157 homes in the locality of Amberstone to Clarion.

Achieving social value

The scheme provides a range of two, three and four-bedroom townhouses, semi- detached and detached homes. Coupled with this there are bungalows contained within the scheme to create further variety in the housing mix. Some of the non-s106 units were delivered by Optivo as additional affordable units with an affordable rent and shared ownership tenure with Homes England grant – thus creating additional social value.

Testimonials

Both the Clarion and Optivo schemes were bought from land promoters, each of which gave their verdicts on dealing with V10 during the acquisition process;

“The crucial aspect of dealing with V10 for me is the certainty I have experienced in them performing on the terms we have agreed. They have the required expertise to understand all of the technical and planning aspects of a project and are able to work out solutions with me such that all parties are happy and the deal can be done. I will take further sites to V10 such is my confidence in them performing.” Jonathan Tomlinson, Director, Heyford Developments (Clarion scheme promoter)

“As land promoters we are well versed with the trials and tribulations of selling sites with multiple owners. On our dealings with V10, however, these problems virtually vanished with their straightforward approach and determination to resolve all issues as they arose, in an open and determined manner. It was a pleasure to deal with V10 on this site, and we hope our paths cross again soon.” Rick Bird, Director, Frederick Bird Investments Ltd (Optivo scheme promoter)

Legacy Developments

Karl Timberlake, Land & Partnerships Director at V10 Homes commented: “Working with both these land promoters was an absolute pleasure which led to us working on new opportunities after completing on both projects.

We are very pleased with the hard work our contractor partners, Jenner Construction have undertaken to advance both schemes on behalf of Clarion and Optivo. Both developments will be outstanding architecturally and in terms of the quality of the finish. They will be built legacies that both our land promoters can be proud of – being the initiators of the vision for each development”.

When recently reflecting about my formative years as a young engineer in the house building industry, I began to recall the comfort and satisfaction of being ahead of programme with multiple foundations poured and slabs being laid. Nearly 40 years have passed since first getting my boots dirty.

Never before has the construction sector faced such unpredictable challenges to hasten an unwelcome slowdown in project starts – as world and economic obstacles create a state of flux. Indeed, construction data company Glenigan has recently reported that there has been a 48% decline in project starts since last year.

Construction risk

Contractors and their customers have been hit by unprecedented levels of cost inflation. This has sent several previously viable businesses into administration or into some form of restructuring or it has weakened their financial robustness. These events have created two fronts of risk for RP’s which require addressing more thoroughly than previously, with the focus being on contractor security and the uncertainty of future cost variations – matters which V10 are resolving.

Performance bonds are not the only safeguard

To unlock projects for our clients we carefully assess the financial standing of the contracting entities we engage with. These are not normally Tier 1 operators who I am pleased to see in the press are championing SME’s to succeed and bolster their order books demonstrating a much needed togetherness which our industry calls for right now.

As performance bonds become more pricier and difficult to obtain by SME’s, we have reached out to RP’s to consider a mixture of initiatives involving part performance bond and part enhanced retention which has been received favourably. Clients do recognise they need to be flexible to get their projects moving whilst also considering the forecasted turnover of organisations on works secured. In most instances this work is with other RPs on a monthly valuation basis guaranteeing a steady and predictable cashflow throughput as security. This is easing the acceptance of contractors from RPs financial teams and long may this bigger picture thinking prevail. We have in-fact ourselves worked collaboratively with partners on a recent project to place a cash sum in escrow with the residual security being covered by a partial bond provided by the contractor.

These times demand such innovative solutions. We are glad to see other insolvency cover providers such as Advantage are now seen as viable alternative by our clients as the £5 million cash at bank criteria imposed by others is stifling to the SME world. As long as this open mindedness continues then we should see an active time ahead.

Fixing costs and fluctuating costs

We have been encouraged how contractors and RPs have tackled the ongoing problem of rising construction costs. For us we endeavour to bring our clients a fully bottomed out delivery figure for the works. To do so it is essential to brainstorm the residual risks and to commit to any outstanding assessments or design work needed to do so. Where this level of up-front information carries a high cost then we are encouraging stakeholders to respect the merits of investing in such and to collaboratively work to that end. There is much value in taking this stance. If a project is oven-ready then it allows the contractor to be able to commit to a pretty assured site start date within a given quarter with confidence.

We are also finding when good communications arise between contractors and their supply chain then some cost certainty can prevail and the importance of this is becoming key for contractors to fix their costs up-to, in some instances, 12 months, which clients are appreciative of. Beyond this point RPs and their EAs are being very pragmatic about fluctuation clauses being inserted in JCTs. If all sides contribute on the wording of such there is generally a mutually satisfactory outcome. It’s the way it has to be at present.

Collaboration

V10 has been working together with vendors, contractors, EAs and RPs who make up the stakeholders in our land sourced package deals. Our view from the trenches is to fight these challenges with sensibility and total open collaborative methods of working. We all want to side step a slow down so let’s get on the front foot and collectively kick-start and sustain the pouring of foundations throughout 2022/2023.

The views of: John Stainton. V10’s Pre-Construction & Sustainability Director

So, we now have a new Prime Minister – the first one ever to sit on a planning committee. Maybe she shares our pain too? Is this experience good or bad news for the residential development sector?

Free Markets

It’s worth stopping for a moment to consider what a free marketeer is? What is the political philosophy that will underpin the Truss Government’s policy formation and decisions? The free market was an economic idea espoused by Adam Smith in 1776 which determines that markets work best when governments leave them alone and allow the laws of self-interest, competition and supply and demand to prevail. Looking at the prospects for the sector through the prism of supply and demand let’s consider what Truss and her supporters have been saying recently.

Supply

The standout comment from her leadership campaign was in relation to her wanting to abolish “Stalinist” housing targets issued from Whitehall. Looking at the House of Commons library briefing (click here) upon first impressions is it does indeed look like a top-down edict, especially if one cares to review the spreadsheet “housing need for figures for local authorities”. However, these figures are simply based on a new method for calculating  housing need and this is intended to push more development into the urban areas. However, by giving LA’s more control over these housing targets Truss is effectively giving wannabee councils a NIMBY’s charter. The result is that we should expect less development to be allowed in the greenfield Tory shires and more in pro-development authorities.

One interesting idea is relation to brownfield sites where it has been muted that it would be quicker and easier to obtain planning permission in those type of locations. Indeed, the concept of brownfield sites being “full-fat freeports” with tax incentives for development has been floated by her supporters. Will greenfield land be taxed more and developers of brownfield land be rewarded for the extra effort? It would make sense for the industry to have its own financial self-interest reorientated towards more brownfield development and make more of the brownfield opportunities available on each LA’s registers (click here). In this context if planning red tape and regulation can be cut all the better. This will spur supply.

Demand

Truss has also made the point that younger people are struggling to get on to the property ladder. She has talked about delivering more affordable homes on brownfield sites. She is a believer in home ownership and would therefore be a natural advocate for shared or discounted home ownership where outright ownership is not possible. You can see the dots being joined up with the supply ideas.

She has also pointed out that 50% of renters can afford a mortgage but due to the mortgage rules only 8% ever get a mortgage – so homeownership is being held back. Easing the availability of credit will unleash further demand from first time buyers thus creating the property-owning democracy craved by the right.

New Opportunities

Politically, Truss needs to curb what locals perceive as ‘over-development’ in their constituencies – hence the abolition of ‘Stalinist’ targets – a nod to the real politics of the 2021 Chesham and Amersham by-election result. Meanwhile she wants the free market to create homes for the young to own – thus enlarging the natural conservative constituency (as Thatcher did with the right to buy council houses)

Whatever new policy decisions are made it is clear the housebuilding industry and the housing association sector will need to re-orientate yet again to take advantage of the new opportunities – once the 10^th incumbent in the last 15 years is appointed to the position of Secretary of State for Levelling Up, Housing and Communities.

Comments above by

Karl Timberlake

Director – V10 Homes