24/06/22

Government supports radical plan to scale up self-commissioned housebuilding

AUTHOR: GRAHAM TAYLOR

The Government has today (Friday 24 June) published its response to the Independent review into scaling up self-build and custom housebuilding, published by Richard Bacon MP in August 2021. 

Housing Minister Rt Hon Stuart Andrew MP has warmly welcomed the report, saying:

The government strongly believes that self and custom build housing can play a crucial role – as part of a wider package of measures – in securing greater diversity in the housing market, increasing overall supply and helping to deliver the homes people want.”

“The Help to Build prospectus sets out the details of the scheme and was published in November; applications will open on 27 June 2022 with the first approved individuals ready to build in 2022/23”.

“We have committed to new activities, such as establishing a dedicated self-commissioned homes delivery unit within Homes England. This will ensure that we embed and maximise what the government can do to support delivery of self-commissioned homes across our programmes.”

“The government will continue to work with the industry to reduce the barriers to self and custom build and community-led housing more widely, to ensure that we grow the sector to meet our shared ambition.”

Richard Bacon’s report set out a series of ambitious recommendations for the Government to broaden the housing market and offer consumers much more choice in the homes they live in. These included: 

  • For Homes England, as the Government’s housing accelerator, to establish a new Custom and Self-Build Housing Delivery Unit to bring forward plots on small and large sites and to support the sector at scale;
  • A targeted communications campaign to raise awareness and understanding of the Right to Build legislation, including Destination Show Park and Hub with Show Home;
  • Doing more to support community-led housing through a series of targeted initiatives, including reigniting the Community Housing Fund to create more opportunities for communities to build homes;
  • Supporting the sector through initiatives related to Modern Methods of Construction and Net Zero Housing;
  • Maximising access to permissioned land through reforms to legislation and targeted planning policies to permit unplanned sites in areas of high demand for plots;
  • Investigating the perceived disadvantages in the tax system between the custom and self-build delivery model and other forms of housing.

In responding and despite lack of detail, the Government has appeared to accept most of Bacon’s recommendations, underlining its continued commitment to scale-up the self-commissioned housebuilding sector in England. Key actions the Government has said it will take that are set out in its policy response paper include:

  • Establishing a new Self-Commissioned Homes Delivery Unit in Homes England to scale delivery on small and large sites. The Unit will also explore other actions, including examining the viability of funding enablers, industry-led ‘Show Parks’ and a Plot to Rent Scheme; how affordable self-commissioned schemes can be promoted through its programmes; and linking delivery to Modern Methods of Construction;
  • Changes to legislation through the Levelling Up and Regeneration Bill currently before Parliament to ensure more land comes forward for custom and self-build housing, including the review of policies in the National Planning Policy Framework to support delivery;
  • Commitment to look at how the ‘self-build’ exemption can be extended through the new Infrastructure Levy to ensure newer forms of self-commissioned housing such as apartments and terraced homes also benefit;
  • Continued use of the Brownfield Land Release Fund and Levelling Up Home Building Fund to push delivery of serviced plots on public and private land;
  • Recognition that community-led housing helps support affordable housing and will be supported;
  • Stronger promotion of self-commissioned housing to consumers;
  • Commitment to support greener homes and more use of advanced manufacturing through a range of actions;
  • Continued funding of the Right to Build Task Force to 2025 to work with local authorities;
  • Publishing local authority data on demand for and supply of plots annually.

Custom Build Homes (CBH) had been closely involved in the Review through its Director of Planning & Strategic Engagement and ex-civil servant, Mario Wolf, who was part of the steering group supporting Richard Bacon in preparing his report. To feed into the supporting analysis CBH surveyed the preferences of consumers over where and what type of homes they want to build. This found that many people are not opposed to plots made available on larger housing sites and there is an overwhelming consumer preference for commissioning a bespoke home, built on a serviced plot, from a contractor or builder and buying a customisable home. Top findings were: 46% of people have no preference whether they build on a single plot or whether they build alongside a group of other houses (i.e. a larger housing site) and 47% would prefer to build a bespoke home on a serviced plot with the support of a contractor or builder.

The Government’s Response forms part of a broader package of announcements, comprising:

  • Launch of the Help to Build equity loan scheme with 5% consumer deposits towards land and building costs backed by £150 million of government funding;
  • The latest data release from the Department for Levelling Up, Housing and Communities on self-build and custom housebuilding activity across all local authorities in England, extending the data set from 2016 to 2020/21, which shows that in October 2021 there were 58,813 individuals on local authority registers, an increase of 25% from 2020;
  • Funding for 52 housing projects under the £4m Community Housing Fund Revenue Programme 2021/22, announced in March.

This latest announcement has been much anticipated. According to analysis by Custom Build Homes as part of its own growth plans, the market for custom build housing continues to expand at a scale never seen before in the UK with thousands of development opportunities coming through local plan allocations policies which now routinely ask larger sites to set aside land for custom housebuilding which is then secured through a legal planning agreement. Landowners are also increasingly identifying potential multi-home sites in response to growing consumer demand and where there is the prospect of securing planning permission. Although sites have in the past involved single home developments and small multi-plot ‘self-build’ sites with a few detached homes, the market is rapidly evolving into sites offering 20-50 homes or even larger with a focus on customisable ‘made to order’ homes delivered by professionals for customers.

However, the UK housing market cannot currently deliver customised housing products at any real scale, with market knowledge and available suppliers in short supply. Enablers like Custom Build Homes will therefore have a key role to play in unlocking the growth potential of the market by working alongside landowners and housebuilders. But to do so enablers need to have the capacity and investment behind them to work at pace across the industry. The Government’s response -with its commitment for the new Delivery Unit to look at how enablers can be supported- therefore sets an important framework for tackling this issue.

Mario Wolf, Custom Build Homes’ Director of Planning & Strategic Engagement, said:

“We’re delighted to see the Government’s response being finally published. The proposals for action are wide ranging and demonstrate that custom and self-build housing has a serious role to play in diversifying our housing market.”

“The Help to Build equity loan scheme is now open for business and will be a key driver to scaling the self-commissioned housing market, but there is a lack of detail around the other actions. It is therefore imperative that Ministers set out a clear delivery timeline between now and 2025, so that we don’t lose the market opportunities which are being created and the market can attract the investment needed scale in line with the Government and industry’s shared ambition.”

Mario Wolf will be in conversation with Richard Bacon about the Government’s response to his report which will be aired on the CBH podcast channel later at the end of June.

-Ends-


Media Enquiries

Graham Taylor

01506 331 010

graham.taylor@custombuildhomes.co.uk