V10 prides itself on being an affordable homes developer – creating homes for those on low to middle incomes – thus changing life chances.

Pledges

One of V10’s three sustainability pledges is to ‘increase the delivery of affordable homes above statutory s106 levels’. This means we actively engage with Registered Providers whose intention is to convert outright sale tenures to various affordable tenures, thus creating ‘additional affordable’ homes.

The Glenvale Park scheme in Wellingborough is currently under construction for Stonewater. Our recent visit showed the immense progress that our contractor partner has made recently with infrastructure and foundations powering ahead – which gives V10 great delight in meeting our pledges quickly.

Affordable Tenures

This will be a 100% affordable scheme with four tenures; social rent, affordable rent, shared ownership and rent to buy. The housing need figures released in March 2023 show that in Wellingborough in the last assessed annual period, the number of households with a housing need fell by only eight or 1.75% to 338. Hopefully this scheme of 148 homes once complete will make a major contribution to accelerating the satisfaction of such need locally.

But what are these tenures and why are they affordable? It can require a complex answer but in simple terms:

• Social Rent: Using a government formula these are usually around 50% of the market rent – referred to as target rent.
• Affordable Rent: Closely linked to Local Housing Allowance levels, these are usually around 80% of market rent.
• Rent to Buy: This is a transitional tenure allowing the occupant to save a deposit (over 5 years typically) and convert from renting to shared ownership. To enable such saving the rent is set at 80% of market rent.
• Shared Ownership: This enables a buyer to become a part homeowner starting with an entry level 10% share. A rent is paid proportional to the remaining equity held by the Housing Association. Over time the homeowner buys more shares and staircases out to full ownership in most cases with zero rent payable.

Real Lives

In the industry sector we sometimes use a lot of acronyms; AR, FH, SOS, SO, OS, PC, LC, LLR, LAR, RTB, BRMA, SR, SH to describe various aspects of development. However, the most important ones are FH, SH and PC. These represent the moment when those households with housing needs are finally met at First Handover, Sectional Handover and Practical Completion – and a sea of smiley faces heralds the beginning of those life chances – the reason V10 exists.

The last week or so has been a small watershed moment in my career, a career which has now spanned 35 years.

Firstly, I had a near milestone birthday which always triggers a reflection on how far you’ve come and how far you have to go. Secondly, I was invited to be a guest speaker to a group of young developers – which provoked the question of this blog. Thirdly, I received some kindly worded recognition from a former trainee employee – thanking me for giving them the opportunity to enter the field of development and showing them how to ‘add value’ – which they are harnessing to great effect in their new role.

The Developers Club

When I stood up last week to make a presentation as guest speaker to The Developers Club (TDC) in Mayfair, I was intrigued to gauge the entrepreneurial spirit in the room –  after all, without that ingredient no business can start, flourish or survive. TDC is a group of residential developers under the age of forty who own and manage their own businesses from all over the UK. They are all serving specialist residential niche markets and have adopted various business models, each sharing common opportunities and challenges. The aim of the group is to cross-fertilise ideas and best practice whilst harnessing the experience of those developers with longer tooths. It’s a potent approach driving forward the speed of each company’s continuous improvement and commercial evolution. This is an important catalyst to the group as collectively they have committed to delivering 10,000 new homes by 2030 to address the housing crisis – a laudable mission!

Entrepreneurial Talent

It became clear straight away that the group were highly informed and very professional. There was that X factor feeling in the audience – that energy – that passion. I started my presentation with a flashback to 1969 – the first moment when I made a profit reselling Christmas wrapping paper to my neighbours at the age of five – then we moved on to 1971 when I got into the property game – Monopoly! Fast forward 50+ years and here I am with a business based in London delivering over 1,000 homes to seven housing associations in nine locations. Over thirty of those years I’ve spent self-employed with no safety net of employment and perks or silver spoon ready to feed me in the background if my dreams and endeavours were to fail. It is the same for all those in TDC – each juggling the needs of their customers, investors, employees, suppliers and themselves whilst exploiting market advantages and avoiding overwhelming risk to maintain and grow their business volumes to meet the aims of TDC. After the presentation it was clear from the penetrative nature of the questioning, before and during the dinner that followed, that these young developers had the spirit, the swagger, the level headedness and open mindedness to learn, apply and achieve.

The Future Is Secure

In the next few years, like all of us on that conveyor belt of life, I shall exit stage left one way or another. When I look at the young talent we are nurturing in V10’s ranks to take over the business, the progress of some of the young talent that has left V10’s ranks and the young talent that the members of TDC represent I have concluded that the future of residential development is secured – so long as successive governments adopt pro-development policies.

Comments by:

Karl Timberlake

Land & New Business Director

V10

As I got home last night from doing my weekly shop, I took a moment to look at my receipt – £65.79. What would have cost me £51.49 a year ago, the cost of inflation has added £14 to my shopping bill.

Given the fact that I love my job, I could not help but think where build costs currently sit, and if they will come down? Here is my take on where we have come from pre-pandemic and my predictions for the next 12 months.

The Good Times

Now I know that my £14 increase in my shopping bill is a little different from the rising build costs, however it can be something so small that triggers a thought process that makes you ask more questions than can possibly be answered.

Let me take you back to February 2020, the pre-pandemic good times! Imagine the scene across the country, the construction industry is booming, house prices are at an all-time high, land is at a premium, and the manufacturing sector where the construction industry sources key materials is at capacity – working around the clock to provide key materials, white goods, bricks, timber, pre-cast concrete, windows and everything in-between. At the time the warehouses were stocked with around three to six months’ worth of stock, with localised shortages and elongated lead times, something that the industry copes with on a week-by-week basis.

Fast forward to June 2020, many, if not most of the construction industry was just starting to come back on a site-by-site basis, new procedures were in place for social distancing, and the industry was extremely worried about the impact that the pandemic would have on people’s ability and eagerness to buy homes. In short, we needn’t have worried, demand was at an all-time high, and the industry was the busiest I had seen it in eight years. The trouble this caused was unseen for around three to five months, material was getting through to sites, however given the demand and coupled with the fact that manufacturing was coming back slowly, the warehouse stock soon ran out and therefore this meant that they were only producing to order with little or no stock. What this meant was that to get available materials into the sector, prices were raised to slow demand and to help produce more.

A year on from the pandemic the build cost for materials had jumped to over 20%, now it would be wrong just to say the pandemic, as another big impact on the sector was around the Government legislation surrounding red diesel, which pushed the groundworker and manufacturer prices up even further. All this with fuel prices at their highest ever; I remember paying £2 a litre in diesel, given I passed my test in 2015, I started driving when I was paying £1 per litre, how times have changed!

Today’s Impact

So where are we today? Finally after eighteen months, costs are stabilising. Yes, they are higher than pre-pandemic, however commercial teams are finding it easier to predict and manage and are no longer having to report cost increases on a monthly/weekly basis. The price of timber has come down, to pre-pandemic levels (on a side note this means that the price of timber frame open panel is now on par with traditional build for the first time since I have been doing timber frame). Main contractors are now more comfortable fixing their prices for 12-18 months – some even longer. The price of diesel and petrol has come down by around 50p, not quite pre-pandemic levels but a more sustainable and fixed price than the volatility seen over the previous 12 months. Brick prices had been slowly creeping up pre-pandemic and given what the pandemic did to the manufacturing sector, they have continued to increase. Only recently did they slow to a point where they have now levelled out, and while it remains to be seen if this stays the same over the next three months it shows that key elements to our industry are starting to level out and stabilise.

Where next?

Now this is the part that I must put something on the block and give an educated guess, or a Gary Neville type prediction – let’s hope I have a better prediction rate than Gary Neville though!

So, in my opinion, prices will over the course of 2023 start to decrease. At V10 we are seeing main contractors fix for the duration of the programme which is including the planning journey – something which was un-heard of only three months ago. Why are they doing this you may ask? Well, in truth its more than likely they see this time over the next three months where costs are at the tipping point and are at the highest they will be. The likelihood is that come the end of the year prices for materials and manufactured goods will actually fall, so therefore rather than having to reduce their build cost they start to make a margin as they can buy it cheaper.

With timber coming down even further, it remains to be seen whether bricks will come down greatly, however pre-cast concrete prices are slowly creeping down which is giving both timber trame and RC frame a more competitive base than those of traditional build methods. This means contractors and developers have the ability to chop and change to get the best commercial outcome for all sites going forward.

Unspoken Labour Costs

Now I could not write this without factoring in the unspoken labour costs. The cost increases seen to date have all been manufacturing and buying costs. Due to the rise in consumer inflation over the last six months companies up and down the country have given benefits to employees. Certain developers have given up to £2,000 over the course of the last four months to those workers earning less than £49,000. It remains to be seen whether wage demands increase. If so, then it could mean a rise in total build cost inflation. However most companies have factored that in over the past six months and therefore it’s unlikely to have any correlation with build/cost inflation over the next year.

Getting Back to Normal

And so as I put my receipt away and contemplate the fact I could have been £14 better off, I remain confident that over the next 12 months the industry, economy, and life in general will stabilise, and I am bounded by the fact that over the next 12 months it’s prime time V10 territory, delivering much need affordable homes, with professional and dedicated RPs and main contractors in our operational patch.

Blog by:

Kieran Wakley

Head of Pre-Construction & Sustainability

V10

This week our guest bloggers are Fuse Architects. They are currently reaching out to all those in the affordable homes community who can assist them in designing a Net Zero Carbon (NZC) modular home. Take the survey if you have thoughts and ideas that will benefit your customers.

Who are we

Fuse Architects are a small (18 person) architects practice based in London Bridge.

We primarily work in the housing sector, mostly affordable housing, and we are significantly adding to the debate, design, delivery and thinking around NZC buildings, especially NZC housing and MMC. We are a carbon neutral company and proud to have a people first philosophy.

We have designed and delivered, over the last three years a number of new build, socially rented projects in the southeast to a NZC standard and are proud to see families living and benefitting from reduced fuel bills. This fits in with our people first philosophy, actively working for better homes, eradicating fuel poverty and being carbon conscious.

Our Modular mission

When we were asked to develop designs for a game changing, affordable, NZC modular housing system that specifically meets the needs of the rented and shared ownership affordable housing sector, we felt excited for the challenge and proud to be leading this project.

Our vision is to create Modular NZC affordable homes that are beautiful, robust, user-friendly, deliverable and viable. To help us achieve that we are asking for input from tenant and resident groups, tenant/resident liaison officers, and anyone working in affordable housing who is involved in the delivery or management of new homes. We want to try and understand what makes affordable housing liveable, usable, and successful for tenants, asset managers and landlords.

Dave Hughes, our design director and the Fuse design team are super excited to use their years of experience in design and their knowledge of NZC and MMC and have been working on designs. To make sure this fits residents’ needs we have collectively formulated a survey that we have sent to housing associations, resident liaison officers and people we know in the housing market. The survey covers various questions, preferences, and design options for both Rented and Shared Ownership new-build housing. At this stage we are focussing solely on houses, not flats.

The Science stuff

The Fuse Modular home will address the climate crisis and affordable housing shortage and work to unlock the mass delivery of affordable, NZC, modular housing.

Modular housing, combined with Net Zero Carbon is the solution to our energy and housing crisis. To summarise the facts,

• Modular homes cost 55% less to heat than the average UK home and 32% less than traditional new builds
• Modular homes are built 50% faster to make from start to finish than bricks and mortar homes
• Building with modular can halve emissions when building a home, cutting the amount of CO2 produced as a result of construction by up to 83%
• Modular home construction is both more efficient and kinder to the environment with substantially less waste, 90% down on materials wastage than traditional builds
• Modular building heavily reduces the amount of transport access needed for building sites, with 80% fewer vehicle movements to sites and therefore far less local disruption and pollution of the environment

Next Steps – Get in Touch

We have launched the survey  to a wider audience  and to register your input and take part please contact [email protected]

It takes just six minutes to complete, runs until 8th March and we are keen to hear from as many housing people as possible.

Once we have the results, we will be releasing the design and will be arranging a series of workshops to showcase the results. We will then be working with affordable partners and our delivery partner to roll out a series of pilot sites.