David Simmonds, Construction Director at Greenacre Homes, explains how the company has developed its affordable housing portfolio despite a challenging planning environment
by Lucy Mowatt
When the company was set up in 1987, Greenacre Homes, based in Croydon, was mainly focused upon offering luxury, executive housing for people in the London area. Since then its focus has shifted towards providing affordable housing, aimed at rental markets, first time buyers and housing associations.
Since the 1980s, Greenacre has carried out projects in Croydon, Lambeth, Greenwich, Bromley, Wandsworth, Merton and Gravesend, and although it is looking to expand, David Simmonds, having worked for the company for 18 years, is realistic about the opportunities available. He says: “I think it’s down to contracts. We have to identify land at the right price for affordable housing and obviously we have more contacts in our locality than further afield.”
The homes developed by Greenacre tend to be timber frame constructions, which saves time onsite, as the skeleton of the house is developed in a factory. David Simmonds says that these homes do not save money in terms of materials, but time and labour are important factors in the construction of a home, so money is saved in other ways. “Jobs don’t come much cheaper,” he states. “Obviously, timber frame manufacturers add their profit on, so manufacturing frames ourselves and bringing in labour is the only way we could make it cheaper.”
Steady growth
The company is currently working on twelve to 18 projects in the London area which range in size. Some developments only have six houses, whereas others have as many as 85. David Simmonds elaborates, saying that Greenacre builds, on average, 300 new homes a year and its turnover in the last year reached £40 million.
He goes on to say that there is high demand for housing in the London area, which maintains levels of demand, in spite of any perceived downturn or levelling off in the market elsewhere in the country. This will mean that there will be opportunities for the company in the future, while other markets may slow.
Greenacre’s plans are mainly focused around steady growth for the next few years. This will be simplified by the company’s modular structure. Greenacre is made up of small working groups which are fairly specialised.
“The construction side of the business is organised in teams of three, with a director or a director-surveyor, an assistant surveyor and a contract manager,” Mr Simmonds states. “Each team takes on as many jobs as it can comfortably manage. As the firm grows, it is just a question of adding another team - which means restructuring is minimal.”
He goes on to say that all of the sites are bespoke owing to the nature of the affordable market. “Wherever we build, we have to maximise everything we do, which makes all projects different,” the Construction Director says. He explains that larger companies have a portfolio of standardised houses which can be utilised in any situation, but Greenacre cannot do that.
Instead, it has to buy land which is as inexpensive as possible, build homes that are accepted by distinct planning authorities and remain as low cost as possible. As such, all projects have to keep many factors in mind, rather than using the same designs repeatedly.
Sustainability also needs to be considered at the planning stages, because it has become an integral part of government targets and legislation. “I think that is one of our biggest challenges because we’re only just getting used to building sites that use ten percent recycled material and that will soon go up to 20 percent,” he says. These are factors that the company has to take into account on each project and have to be met, which can mean that the planning stages take longer.
Market factors
This is in addition to coping with competition in the market, all bidding for land and trying to get through a convoluted planning process. “Our first problem, once we get our site, is obtaining planning permission. I think that the planning process needs to be sorted out and rationalised, although we’re always being told to build more houses. We’ve got the opportunity to do it, but the problem is the length of time it takes to get through the planning process. - we could be waiting for two years to get planning permission.” This obviously adds to the cost of building.
Over the years, Greenacre Homes has built up a network of trusted suppliers, with which it has developed strong ties. “We’ve got a pool of key subcontractors that we use on a tested basis,” David Simmonds states. “We have worked closely with Kingspan Century over the years. In fact, we started working with them when they were Century Homes.” The two companies know each other’s ways of working and are able to meet expectations time and again, ensuring timely completion and customer satisfaction.
Affordable housing
Greenacre is currently working with Wandle Housing Association, who own properties in eleven London Boroughs. This organisation aims to offer affordable rental homes that are of a high standard for people that need them. Social housing is a large part of the company’s portfolio and offers Greenacre potential for future growth. It has also worked with London and Quadrant and Moat Housing Associations on other projects.
The housing developer wants to be able to offer first time buyers a way into the market with shared-ownership schemes, as property prices in London are hard to manage for those yet to get into the market.
Mr Simmonds explains, however, that this in itself raises problems; because the housing is affordable, the perception will be that the potential residents will be disruptive or undesirable. This results in complaints and objections from local people who do not want to see the area to change and can often mean an application is declined. “It’s quite frustrating, because there’s not too much we can do; if we make too much of a fuss it will backfire on us. Instead, we try to improve the situation by working in cooperation with the planning officers.”
Negotiation seems to be essential to the way that Greenacre does business, contending with the market challenges and overcoming them. By adapting to government targets and local issues, the company has a wide range of experience and will secure its relationships for the future.