To the vast majority of people, house building is considered to be important on one key level: to deliver much-needed homes at a time when the UK is suffering from an ongoing, chronic housing shortage.
However, the house building industry’s ability to drive economic growth, promote health and wellbeing, and benefit the environment should not go unnoticed.
The construction sector adds £31 billion per year to the economy, and house building alone supports almost 750,000 jobs.
Regional house builders in particular - who often opt for smaller projects that are overlooked by larger, national builders - employ innovative methods of construction, provide local jobs, and regenerate communities.
In the late 1980s, SME house builders were responsible for delivering approximately 80% of new homes. Now, that number has slumped closer to 12%.
The aftermath of the 2008 financial crisis meant that regional house builders faced limited access to funding, but because their high-specification schemes have a number of crucial societal, economic and environmental benefits, their importance still stands.
The alternative finance made available through alternative investment methods - such as the MAVEN Bonds property-backed IFISA - have allowed regional house builders to continue delivering high-quality housing, and all of the advantages that come with it.
The societal, economic and environmental benefits of regional house builders
Now more than ever, house building will be key in helping to drive economic growth - as housing demand appears to have increased post-Coronavirus lockdown.
Not only did Zoopla report that demand had jumped by 88% in the week after the housing market reopened, but North East-based property agent Urban Base revealed they are undoubtedly busier than pre-lockdown.
The announcement that stamp duty will be abolished - effective immediately - on homes up to £500,000 until March 2021 is expected to increase demand even further. The welcomed move is expected to benefit nine in ten homebuyers, with a saving of £4,500 on the average purchase.
House building is a major source of employment, and regional builders are able to create a variety of local jobs - for construction workers, estate agents, and more.
As the Government announces plans to help young people secure jobs in the midst of deep uncertainty - with £2,000 paid to every business that hires apprentices under the age of 25 for the next six months - apprenticeships made available within the construction sector will be crucial.
Innovative methods of building - such as CoreHaus, which regional house builder Homes by Carlton (MAVEN Bonds’ Strategic Housing Delivery Partner) have successfully trialled on their Cathedral Gates development - also mean that increased skills training is often provided, bettering the workforce and in turn, the industry.
CoreHaus is a modular housing solution that reduces build costs, construction waste, and increases the delivery of high-quality homes. As well as creating the aforementioned opportunities for advanced training, this innovative construction method is kinder to the environment than traditional building processes, while the end product is just as beautiful.
Environmentally friendly building projects such as CoreHaus are at the forefront of the government’s new plans, as Rishi Sunak states “this is going to be a green recovery with concern for our environment.”
Brownfield land (aka land that has previously been developed) is sometimes overlooked by national house builders, as it often doesn’t provide the scope and size that they’re looking for.
However, the re-use of brownfield land is vital in meeting the country’s need for new homes, while also protecting the UK’s countryside.
Revitalising brownfield sites - which can often look run-down and derelict - with beautiful, bespoke new homes contributes to transforming local areas, while attracting young professionals and families alike.
For example, Cathedral Gates was built in place of an unused petrol station. The Homes by Carlton construction team carried out a full land remediation strategy before building 14 high-quality homes that have significantly enhanced the area.
Developments situated close to open spaces - such as Homes by Carlton’s latest scheme, Thorpe Paddocks, which is located in a beautiful village in the Tees Valley, close to the Castle Eden Walkway - offer opportunities for local residents to undertake recreational activities. This contributes to improved physical health, fitness, mental health and wellbeing.
Agile, forward-thinking house builders are also able to be flexible in the tenure of their schemes, delivering what is most appropriate for each area.
The ability to provide the likes of rent-to-buy and private rent as well as private sale means that builders are able to offer affordable housing to those who wouldn't ordinarily have access to the housing ladder.
How alternative finance can help regional house builders deliver high-quality housing
In the year ending December 2019, only 178,900 new homes were completed - significantly below the government’s 300,000 per year target.
The UK is, simply, not building enough new (and importantly, affordable) housing. Regional house builders and their high-quality, innovative developments are crucial in tackling this crisis - and to do so, they rely on the support of alternative finance.
The asset-backed property bonds offered by MAVEN Bonds can provide this finance, supporting the house building industry in delivering much-needed housing, and promoting the regeneration of communities.
Built on a brownfield site, trialling CoreHaus, and creating local jobs, Homes by Carlton’s Cathedral Gates development is a prime example of an innovative scheme delivered by a regional house builder that promises to support the regeneration of a bustling community.
After 10 homes were sold early in the development cycle of the Cathedral Gates scheme in County Durham, MAVEN Bonds were able to provide a short-term development finance loan of £300,000 to fast-track the build of the scheme’s second phase.
This helped to speed the construction of a mixed-tenure, affordable luxury housing development that is helping to support an area that continues to transform.
The MAVEN Bonds product is available exclusively to experienced investors who are classified as either sophisticated investors, high-net-worth individuals or professional investors and have the knowledge and experience to make their own investment decisions. Investments are high risk and illiquid, your capital is at risk and returns are not guaranteed. Bonds are not protected by the Financial Services Compensation Scheme (FSCS).