A collaborative JV between a micro-developer and a local housing association is building four homes on a semi-rural Bristol site. CHI’s Alli Gay tells Jack Wooler how the developer navigated the many challenges SMEs face to achieve this.
A small development of four-bedroom homes, set for imminent completion in Bristol on the site of a derelict farmhouse, illustrates the tough challenges SME firms face currently.
A joint venture between micro-developer CHI and Lime Property Ventures, the commercial arm of Elim Housing Association, the 0.5 hectare project offers flexible, open market home executive homes with a “family-led” design approach.
Demonstrating its collaborative ethos, the housing association provided half the funds for the project, while letting the developer lead on what it’s best at – development.
While purchased with partial planning, this was already going to appeal under the previous owner, CHI then changing the existing planning permission once in its possession. There were multiple challenges gaining the scheme’s approval here, which the developer largely puts down to its SME nature.
The challenges didn’t end there, with the impacts of Covid and the hoop-jumping required for an ecologically diverse and protected site causing multiple delays.
Through innovation and hard work however, these barriers were overcome, and all the plots have now been sold.
Flexible homes
The elevated site, with views over the neighbouring horizons, now hosts four 2,200 – 2,500 ft2 homes, all built using timber frame.
The design of these properties was driven by CHI’s strong desire to build high quality homes, says CHI owner/director Alli Gay. As such, CHI has tried to set itself apart from volume builders by designing additional features which make day to day living that bit more comfortable.
Flexible rooms are one such element, designed to be able to be used for various purposes. The open plan ground floor snug-kitchen-diner and separate lounge and study, for example, could equally be used as a fifth bedroom, separate dining area and large wrap-around lounge.
“We are offering more opportunities to buyers to use their homes in whatever way suits their family lifestyles,” says Alli. “Rather than cramming in extra bedrooms, each house has four large bedrooms with several other flexible rooms, and each garden should be a haven for wildlife.”
She continues: “We wanted to create an exclusive development, maintaining the biodiversity and original features, so that any children could play freely in the street and the occupants could use the whole area socially and we feel we have achieved this.”
The homes also come with full-width bifolds and a separate set of French doors so that during the summer months, the garden can be accessed easily and the views enjoyed widely from the rear of the house.
Opportunity
Rewinding to 2019, CHI’s first move on the project was to approach the commercial arm of the local housing association with a land acquisition opportunity.
Covering 0.5 acres, the land included the derelict farmhouse, but also a fully functional 30-foot mobile home, and a variety of wildlife and Category C trees, most of which were reportedly diseased and in poor condition.
CHI embarked on a lengthy negotiation with the HA which took 9 months for senior management to sign off on.
“We were all keen to create an agreement that afforded each party sufficient protection while still allowing us the freedom to create designs and manage the project that would provide a high return on investment,” says Alli Gay.
While the build and development costs were split 50/50, the HA wasn’t keen to get involved in the day to day operation. This worked in CHI’s favour, however: “It was important for us to have total control of the project and for our partner to have enough security over delivery, so we could do what we do best.”
The JV agreement described by Alli resulted from a collaboration of both parties, an important way of working to result in a document that achieved protection of both parties. Without a JCT agreement, the JV still set out the fine details of obligations and payment terms and profit split.
“Being such a small family run business, JCT penalties had the potential to sink us if any unforeseen events took place, like Covid!” says Alli. She adds: “The HA were taking a measured leap of faith and each party needed to have an element of trust in our arrangement.”
According to Gay, this high level of collaboration meant that the inevitable problems to tackle in such a scheme were dealt with pragmatically, rather than punitively.
Approval
While the land was purchased with planning permission, the team had to pursue the Variation of Condition route, which was the most straightforward approach to achieving a redesign, needed following the initial scheme having gone to appeal.
“The initial designs were poor in terms of amenity space, creating a dark, uninviting living area and were overall quite standard,” she says.
The build costs were also reportedly high, and the buildings were not “particularly” thermally efficient, and so they were deemed unlikely to provide a good return on investment, nor be particularly appealing to a buyer, and it was vital that they were updated.
Once updated, the approval was expected to take eight weeks, but ended up taking four months.
One of the main complications at this stage was the demolition of a 19th Century farmhouse, which saw “considerable local opposition.”
The developers were keen to assuage any issues the locals had, however. They recycled stone from the farmhouse where possible, created and maintained breeding and living habitats for wildlife, and added additional “healthy” tree species back into the development – all moves which “resonated well with the neighbours.”
While waiting for planning approval, CHI decided to add additional floor to ceiling windows spanning two floors to two of the houses in order to maximise the elevated position of the site.
This additional approval then took the planning period up to nine months, incurring additional planning consultancy fees. A further planning pre-commencement condition approval for SuDS was “severely” delayed, says Gay and ultimately the team had to install the SuDs scheme and windows at risk – to do otherwise would have potentially led to major cashflow issues at the end of a protracted build.
Obtaining planning was also hampered due to Community Infrastructure Levy (CIL) issues. Sites in the local authority attract CIL once planning is received, and on here a CIL assessment had already taken place for the previous approval, but the local authority refused to take this into account, which further delayed demolition.
Breaking ground
With planning finally assented, the team broke ground on a frosty January day in 2020. Once things got moving, CHI progressed quickly to foundations during February and March, and the timber frame was erected over the summer months.
Despite being a well drained site, the build soon faced issues with parking, but this was solved by a helpful local resident lending workers a field to park in. With the site accessed via a single narrow lane, the team had to halt work during bad weather in April and May and install a temporary road, putting things back “a week or two.”
CHI also experienced problems with utilities at this time: “One of the electricity joints failed locally in the street, which stopped any access to our site for 10 days whilst the road was ” – as a result, all second fix trades had to carry their tools by hand onto site each day.
Included in the scheme was the construction of a dilapidated dry stone wall to provide a breeding ground for Great Crested Newts, as well as help to increase local support, presenting further practical challenges. It was reconstructed using recycled stone from the farmhouse and locally quarried stone. The wall stretching 50m proved complex, taking a highly skilled stonemason nearly ten months to complete.
Despite the myriad of challenges, by November 2020 the first plot was completed and staged as a show home. The remaining three plots are reportedly advancing well, and are anticipated to complete by the end of March 2021.
Covid concerns
While the construction process appears relatively quick in hindsight despite the issues, Alli says multiple delays occurred throughout thanks to the pandemic. “There was inevitable disruption,” says Alli, “though thankfully our site has remained safe and open.”
She says it was in fact the “biggest challenge” overall as it slowed both progress and the resultant sales. Consistently procuring even basic materials like plaster and timber was threatened by Covid throughout the build. The team was also challenged by large developers coming back online in April and attracting subcontractors away using what she says were “inflated” day rates to ensure their projects completed.
Addressing the materials challenge in particular, Alli says the team worked extensive extra hours, showing “large amounts of resilience” in sourcing materials from all over the UK, even “sometimes driving miles to collect them.”
She continues: “During the early days of Covid, the banks became quite twitchy, and at one point we were under threat of our finance being pulled mid project.” Following some “difficult and strained” conversations however, the lenders were assured that CHI would be carrying on despite the difficulties faced.
Wildlife haven
Another factor that slowed construction considerably was the careful treatment of the ecology the site came with.
Located directly in the middle of a wildlife haven, among fields untouched for many years, the site had a thriving bat, slow worm, dormouse and Great Crested Newt population.
As well as carrying out extensive surveys at specific times of the year before demolition of the farmhouse could commence, CHI were required to separate the site from the surrounding area with amphibian fencing as the newts are a protected species. An onsite ecologist conducted a search before groundworks began, and ecologists visited daily for a month to move the newts.
Beyond this, CHI incorporated a pond for the protected amphibians, with specific planting and log piles, plus bat boxes, and planting and replacement trees to encourage more birds into the local area. As well as the relocated newts, slow worms, frogs and toads, plus a single shrew were also safely relocated, and all tree removal was done before the breeding season began.
While the developer succeeded in its mission to “encourage, restore and enhance biodiversity,” the measures reportedly caused significant logistical difficulties. “Due to the timing of the land purchase, we were only just able to complete our newt survey with a day to spare within the specified season, otherwise we would have had to wait another nine months,” explains Alli.
SME burdens
Though these barriers were overcome in the end, Alli believes they were all exacerbated significantly by CHI’s position as a small builder.
“SMEs are the lifeblood of the UK, yet we face disproportionate challenges to those experienced by the large-scale developer, both in terms of buying power for labour and materials and the planning system,” she says.
Alli argues that local authorities tend to prioritise large sites over small ones as they have limited resources. As such, she says, it’s a “frequent occurrence” for small builders to wait between nine and 12 months for planning permissions to be granted or rejected, and to have “little or no contact” with their planning officer to discuss the scheme.
“Due to the scale of our developments, we can rarely hold land for this long without activity, or sustain substantial delays once committed to the development without it reducing our profits to the point the sites become unviable,” she adds.
She further criticises larger builders’ “frequent land banking,” and decries the fact that developer contributions such as CIL are negotiable when building more than 10 homes, which is the threshold for affordable units, thereby disproportionately weakening the Micro developer’s position.
“Even if building at the scale of 10+ units, as an SME it is likely you are paying a professional to negotiate these agreements on your behalf – so either way we are at a disadvantage.”
Alli says that what she sees as an “inconsistent” approach to the inclusion of small sites in local plans also puts SMEs at a disadvantage, with larger sites afforded greater priority because they fulfil local housing requirements at a greater pace.
Reactions
So far, Alli Gay says the reaction to the completion of this challenging project has been “really positive.”
“We have strived to maintain positive relationships with the neighbours,” she says. “Nobody likes development on their doorstop, and the removal of the farmhouse was disappointing for the community, but people seem to appreciate that we’ve strived to recycle the stone, and enhanced the wildlife.”
The development has had continuous viewings since the showhome was launched in November last year – Alli believing this attention is in part due to it being gated and private, offering a haven for growing families. With all the plots now sold, occupants are set to move in from the end of February 2021.
Looking back, Alli concludes that while nobody anticipated the impact of Covid and the planning system being “extremely broken,” her firm would, “if we had to do it all over again, approach the redesign in the same way.”