Igloo Regeneration’s custom build pilot project has had a slow start. Can buyers be persuaded? Colin Marrs reports
All eyes are again on custom build. Later this year Kevin McCloud will begin filming a six-part television series on the subject, while the government continues to gradually increase funding and planning powers to help custom builders turn their visions into reality.
But so far, the sector has not delivered on a large scale. Custom build has yet to take off as an alternative to the housebuilders’ off-the-shelf offer and the marketplace has been peppered with false starts and overly optimistic projections of public buy-in.
So when in 2014 developer Igloo, in joint venture with Carillion, unveiled a pioneering proposal for Heartlands, a new community at Trevenson Park South, a former industrial site in Pool, Cornwall, the industry watched with anticipation, particularly because it was billed as a pilot project for a potential major national roll-out. In June of that year, the Homes and Communities Agency (now Homes England) signed a deal to support the privately backed scheme, a forerunner of current, more formal government initiatives to boost the custom-build sector.
The project, with its six teams of leading architects and construction partners, offered purchasers the chance to adapt the designs of their homes to their own taste. The first plots were expected to be available for sale in spring 2015 and the development was expected to complete by the end of 2017.
Yet it is only now, almost four years later, that construction of the first custom-build home is finally set to begin, having won planning permission last year.
Moreover, only five out of the remaining 53 custom-build plots are currently reserved by purchasers. So why, given the involvement of top architects and a well-respected developer, has it taken so long? And what lessons can other architects working on custom-build schemes learn from the experience?
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‘The stand-out discovery we have made is that the buying public have zero understanding of what custom build is,’ says Chris Brown, executive chairman and founder of Igloo Regeneration, which is now in sole charge of the project, having uncoupled from the collapsed Carillion. Most self-builders, he says, have traditionally had a personal connection to the construction industry. The task now is to win over the rest of the population.
Buying a house off-plan, with no show home, takes a leap of imagination for most home buyers
At Heartlands, prospective homeowners can choose kit-of-parts properties by Mae with prefabrication specialists Riko; AOC with Cathedral Builders; Ash Sakula with Easebuild and FrameUK; Dwelle; HTA Design with Potton; or White Design with Modcell and Cadfan. The teams were selected through a competition in 2014.
Despite the low take-up to date, the scheme has not lacked interest. The problem has been turning viewings into commitments to purchase. Ric Frankland, director at one of the scheme’s architects, eco homes specialist Dwelle, says that being a pilot scheme for a concept without any history in this country is challenging from the marketing point of view. ‘It is looking for early adopters before the mainstream becomes comfortable with the concept,’ he says. ‘We are aiming at those early adopters. It should all fit into place but it will take a little time.’
Without a show home to look round, potential buyers are directed to websites run by each of the teams, showcasing the six customisable templates on offer. They are also offered time with the architects, who run through the possibilities for customising the basic designs.
Prospective buyers are met with an array of choices of floor space and storage space. Once options have been selected, the customer pays £500 to reserve the plot, followed by a design fee of between £2,500 and £3,000, rising in line with the amount of customisation requested. The total house price – based on a three-bedroom home and including the design fee – starts at £150,000, according to the website. Detailed planning takes up to five weeks and construction between 18 and 28 weeks.
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‘We have learnt that you have to start with an education process – explaining to people how the process works and the different options,’ says Brown. ‘People have two models they readily understand – one is the self-build model they’ve seen on TV, which always goes wrong because it makes good telly. The other is the volume housebuilder – which has a tarnished reputation.’
Apart from the marketing challenges, progress on the Heartlands scheme has been hampered by some location-specific challenges. The site is adjacent to a World Heritage site and sits on top of mine shafts – a legacy of the area’s industrial past. These issues have made the planning process more expensive and lengthy – in addition to the need to treat an infestation of Japanese knotweed.
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The scheme’s location at the end of the country in a relatively deprived part of England has also reduced the number of potential purchasers. ‘Buying a house off-plan, with no show home, takes a leap of imagination for most home buyers,’ says Geoff Shearcroft, director at AOC, the practice behind the first home to gain detailed planning permission. ‘But I am confident that, once we have built the first house at Heartlands, then other customers will follow.’
Alex Ely, principal at Mae, says that custom building projects also face higher materials costs than those built by the major housebuilders. ‘You can understand why the current housing supply chain is dominated by volume housebuilders. They drive down the prices charged by their supply chains, which is harder for us to achieve. It would be a pity if custom build only caters for more affluent areas.’
To make this work, we needed the planners to be as pioneering as ourselves
On the flipside, says Brown, custom build does have the advantage of not being forced to seek the high returns to which volume housebuilders operate. ‘Typically, a housebuilder will make 25 per cent profit on their costs,’ he says. ‘If you have a customer who is paying for building one house as you go along, it reduces the risk significantly, so you don’t have to charge that margin.’
The limited number of building contractors based in Cornwall has also provided challenges. Brown says the original concept of having a different construction firm for each project is now changing into a more collaborative approach, particularly on groundworks. According to Ely, the fall-out of the Brexit referendum has also been a factor. ‘Our partner is a Slovenian company and, with the fall in the pound, our construction costs have gone up,’ he says.
In advance of the submission of the outline planning application for the scheme in 2015, HTA Design drew up a design code to bring consistency in the urban form created at the Heartlands site. Paul Maddock, senior architect at HTA, says: ‘Anticipating that you might end up with a terrace of completely different house types, the code sets out some rules. All the plots are 6m wide, while different parts of the masterplan site have different height restrictions.’
The code even covers detailing, weatherproofing and interactions between individual properties. In drawing up the code, HTA consulted with local residents and Cornwall Council planning officers.
‘To make this work, we needed the planners to be as pioneering as ourselves,’ Ely says. ‘We took planning officers on a study visit on a number of self-build sites in Bristol. The process was lengthy but it felt like it paid off in the end.’
Matt Williams, principal planning officer at Cornwall Council, says: ‘It was collaborative. We wanted to have some control but also open the gates to choice. We were concerned about the frontage of the scheme and its relationship to the heritage assets, so that led to stricter rules about boundary treatments on these homes, while we took a more flexible approach in two zones that sat behind these.’
Ely describes the process of producing the code as ‘chicken and egg’. He says: ‘Because the masterplan was developed at the same time as the manufacturers were developing their housing types, we ensured the design code fitted those types.’ But he admits there could be a tension between site-specific design codes and the efficiency of designing standard house templates which can be replicated on a number of sites. ‘We want to be in a position where we are not changing too much on each site,’ he says.
For the six architects working on the scheme, the project has so far been a labour of love, rather than a money-spinner.
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‘We have all developed house designs that can be customised and built websites to show them to the public,’ says Shearcroft. ‘There are certain analogies with the car industry, which invests heavily in prototyping and gets the money back through significant sales. We won’t make a profit delivering just one or two homes, but will do over time as we build out at Heartlands and use the same custom build model on different sites, as we have already begun to do.’
Brown is convinced that the challenges and delays with the scheme will be worth it in the long run. ‘A lot of what we have been doing is trying to learn lessons and refine as we go along, and the architects have been brilliant in terms of feedback. In a pilot you can be uncompetitive because it is the first time you have done something. The challenge is to understand which issues are down to not doing it before, which down to doing a scheme in a particular place and what are the general issues.’