That’s really encouraging. Will the Regional Growth Initiative be available in every region of the UK?
Vic: Yes, in fact the first of our regional partnerships are already in four different regions of the UK. In Cumbria, for example, we’ve partnered with local developer Genesis Homes to support their target of delivering more than 180 new homes per annum by 2026. With this early stage cashflow support Genesis will be able to buy larger sites, driving its growth into a more established builder in the region.
The housing industry can be complex but it’s so important to the UK economy. How have you seen the industry and market change since the launch of HGP in 2016?
Vic: Given that our fund has existed through the EU Referendum, Brexit and Covid, I think we have just about seen everything! Some of the challenges we had before these events like construction capacity and supply have become even bigger issues that will continue to constrain the industry for some time.
Of course, people’s housing needs and where they want to live is also evolving and it will be important that housebuilders and policy makers are on the front foot with this change. The online shopping revolution had already created a conundrum around how we reinvigorate our town centres and now the Covid pandemic has made the entire UK reassess its housing requirements. Just how much of this change is permanent and what we will need to do to address longer term is very difficult to predict.
And what further changes do you think we can expect to see over the next five years or so?
Vic: I think there’s a fantastic opportunity for innovation to support both production capacity and energy efficiency, particularly with the Future Homes Standard in England and similarly ambitious targets being set in devolved administrations. The industry can’t simply pass on more build cost to home buyers given the severity of the home buying affordability issue in the UK.
Planning reform will definitely dominate focus over the next five years as well. There is an impressive amount of national ambition in that regard, but if the Bill is passed I suspect it will be very challenging to implement change locally at the pace required, given the capacity issues we know exist.
Harry: The transition towards net zero carbon will undoubtedly be a driving force for change within home building over the coming years. SME homebuilders have a vital role to play here and have an opportunity to show their ingenuity and agility in response.
I am also expecting new partnership models to play an active role in the market, bringing together builders with institutional investors as well as housing associations will mean finding new ways to work together to deliver quality new homes for communities across the country. While we often see these approaches being taken in larger organisations I believe there will increasingly be opportunities for SMEs to play an active role in these partnerships.