Manchester Housing Sigma Capital Association Great Bloxham

Tom Bloxham has branded the way the UK provides social housing as ‘fundamentally flawed’ because it drives up home price inflation. The Urban Splash founder and chairman criticised social housing policy whilst speaking at the Greater Manchester Economic Growth Conference.

He said: “We believe that the basic way of providing social housing is fundamentally flawed and fuelling house price inflation. The bigger the proportion of social housing, the more prices go up.”

And the stark divide between affordable and private tenures risked exacerbating social divisions, said Bloxham: “We are producing a segregated society, poor people living on one side of the tracks and the well off on the other. Better societies have a much wider ranges of tenures. The really acute need is for less well-off working people.”

Bloxham, who made a name for himself as one of the pioneers of Manchester’s urban regeneration, said that Urban Splash aims to expand output of its new modular home range from the hundreds to the thousands, and there is a public appetite for better quality new homes, he said: “Our houses keep on going up in price but don’t get any better. We want to create something relatively cheap to build and flexible to design.”

Bloxham said the company’s modular homes are already are on site in Birmingham with plans to roll them out on Urban Splash’s developments in Milton Keynes and Merseyside.

He told delegates that the company is partnering with Alumno on providing student housing at its project to regenerate the grade I listed Park Hill former council estate in Sheffield as well bringing forward a fresh phase of 300 private rented sector units and a £21m arts centre.

In Bristol, he said Urban Splash has just launched the Copper Building, which is the first phase of its scheme to regenerate the former Imperial Tobacco factory.

And at Bradford’s Lister Mills, the regeneration specialist is fitting out new roof pods, which will be launched later this year.

Bloxham said the first flats to sell at its Avro development for older ‘last time‘ buyers had been the biggest properties, which are located on the top floor. He said the company had cut the size of typical loft flats in the development from 5,000 sq ft to 3,000 following its agent’s advice that the larger units would not sell.

Sigma Capita is planning to conduct another fundraising exercise this year for its PRS REIT (real estate investment trust), its Regeneration Director revealed during the same session.

Duncan Sutherland, said the first two subscriptions by the family private rented sector housing provider’s REIT, had already raised £650m of its £1bn target and must go back to the markets this year. He said Sigma, which has let 2,500 properties over the last two and a half years with another 1,700 under construction, aims to build 10,000 dwellings.

Sigma’s homes are supplied through contracts with housebuilders, including Countryside which has a contract to supply 4,000 homes over the next five years.

Sigma is able to let homes out five times faster than private developers are typically able to sell them, he said: “From a regeneration point of view, we can go on a big site and develop 150 homes very quickly.”

The conference also heard how Great Places Housing Group has set up a modular housing partnership with other northern associations.

The Manchester-based social landlord runs its own contractor framework but is looking at off-site building due to frustration with traditional methods, said Peter Bojar, its Executive Director of Growth & Assets: “We are flogging a dead horse with capacity in the construction industry. Everybody is struggling with traditional building production methods. We feel it’s broken, probably irreparably.”

And retaining talented staff is a ‘never ending issue’ even after revamping the group’s apprenticeship and graduate traineeships, he said: “We’ve been seen as a centre of excellence and people keep nicking staff because we train them well.”

Bojar added that the way to address the issues around skills gaps is to do ‘something very, very different’.

The group, which currently manages 19,000 homes in the north west and Sheffield, is under pressure to ramp up delivery after recently committing in its corporate plan to deliver 8,000 new homes by 2028. This equates to a 20 to 25% increase on Great Places’ current delivery rate of 450 to 750 homes per annum. Part of the increased output will be achieved through the group’s new strategic partnership with Homes England, which will deliver 750 additional affordable homes and extends Great Place’s relationship with the national housing agency until 2028.

Bojar said that Cube, Great Places’ commercial market sale and private rented subsidiary, is due to complete 75 homes in 2018/19 and has 243 dwellings in the pipeline. He said the group is targeting around 200 sales per annum with 179 starts already lined up in 2019/20. And while wider potential exists for JVs, such as its partnership with Countryside Properties, the group’s commercial activities would continue to be underpinned by its social ethos, Bojar said: “Not for profit development will be core but supported by for profit development.”

Michael Dong, Group Chief Executive of the Investar Property Group, told delegates that its Kings Dock new build project in Liverpool’s Baltic Triangle had been sold 100% off plan in September to investors from all over the world. He said Hilton Gardens Inn has signed an agreement for the scheme’s 108 hotel rooms and to manage the wider estate, where there are plans for another 125 units.

Dong said Investar is also looking to complete in just over a year’s time a 58-property scheme, which it is developing with housing association Places for People near Media City in Salford.