21 Jun Unlocking small plots for housebuilding
*This article was originally posted on the RICS Land Journal
At RenKap we pride ourselves on doing something great – for us that is helping to alleviate the Housing Crisis through supply-side solutions. Our platform is the first of its kind Development Management Platform. What does that mean? We help our clients to boost their development capacity through tech to do a lot more with less. We exist to help you build affordable homes at scale.
For the past 50 years, the UK has failed to meet housing needs and the backlog of homes now exceeds 4m. The dysfunction of the housing market can be measured by massive waiting lists, high costs, the rise of Generation Rent, and the fact that each year we are only building 60% of the housing we need.
To meet the current demand, 340,000 new homes are needed each year. Although the spread of COVID-19 has had a huge impact on residential developments, not enough was being done even before the pandemic, with only 180,000 new homes being built annually. What other industry has such a large and constant gap between supply and demand? It’s clear the market is broken and the existing business models are no longer working.
What other industry has such a large and constant gap between supply and demand? It’s clear the market is broken.
Gonzalo Marquesini FRICS
Over-reliance on the private sector
It wasn’t always like this. In the 1970s, housing was being built in the UK at a rate that exceeded the current seemingly unachievable target of 300,000 homes a year. This was largely because both the private and public sectors were providing new homes at scale; in 1970/71, for instance, the public sector completed 49.5% of the 362,230 homes built.
But following government funding cuts, public-sector housebuilding has fallen significantly in the past 50 years, dropping to just 4,010 homes built-in 2019. Consequently, we have become over-reliant on the private sector to plug the gap – and as it has not, house prices have shot up.
Now, 50 years on, the private sector dominates the UK housing market, and the nation’s top ten largest housebuilders account for around 50% of all new homes. SMEs are an integral part of the housing market, but over the past 30 years 65% of small building firms have ceased trading because they couldn’t compete with the large companies or access suitable sites.
The make-up of the private-sector housebuilding market also affects the types of sites coming forward for development. Major private-sector builders tend to focus on developing the largest possible sites, because they offer the scale needed for viability. They are not interested in the many small sites that, combined, could plug the housing gap.
The increasing focus on large sites and the reduction in SMEs also makes it harder for the public sector to procure and build homes on their smaller plots. There is a huge opportunity for housing at scale on small and medium sized sites. A recent report from the CPRE found that there is enough under-utilised brownfield land across the UK to deliver over 1 million homes.
Many of these sites tend to be considered inefficient or unviable and are ignored or forgotten. At RenKap, we believe that these are only inefficient or unviable for the current old-school business models. Our tech boosts development capacity and helps to make these sites viable through our distributed supply chain.
Housing inequalities exposed
We see neglected brownfield sites as a huge opportunity. Such small- and medium-sized public-sector land could make up a substantial chunk of the housing market if it weren’t excluded by current business models.
As mentioned above, there is enough underused land available in the UK to provide more than 1m homes – sufficient to cover the yearly deficit of 160,000 more than six times. The other significant thing about this market is that, as sites are developed, other developments reach the end of their life cycle and themselves become brownfield sites ready to be redeveloped. Given the obvious need for more affordable housing, the ongoing COVID-19 pandemic has laid bare inequalities across the UK. People from all over the country have been disproportionately affected by the spread of the virus based on their housing situation, particularly if they live in overcrowded accommodation or intergenerational households.
The national lockdowns have emphasised the pressing need for more quality housing at social rent levels, and the public sector could play a vital role in providing these homes. Now more than ever, the UK needs a way to support its broader social and economic outcomes by boosting public provision of genuinely affordable, sustainable, and quality housing.
The RenKap platform
We want to transform the future of housing provision by introducing a digital means for any developer – from the public or private sector – to instantly boost their in-house development capacity and build affordable homes at scale. In the way that Uber links customers and drivers, RenKap’s platform connects under-utilised land to vetted suppliers at each stage of the development process.
Through us, clients can easily progress under-utilised sites through the development process at a click of a button. Our clients can now increase their development capacity without having to hire a huge team or commission expensive consultants. As a result, we have received funding from HM Land Registry, Ordnance Survey, and Innovate UK.
Our platform allows our clients to:
- Instantly identify all the land they own;
- Tender, procure and aggregate site investigation surveys and data at a click of a button;
- Access key feasibility data instantly at an early stage, including a policy-compliant accommodation schedule, build costs, sales and rental values;
- Tender, procure and manage the full design and planning process on one platform;
- Aggregate sites and procure work to modular manufacturers and SME housebuilders.
The purpose is to simplify property development and increase efficiencies. For example, our Automated Site Investigation product has reduced the in-house time that it takes to tender, manage and analyse site investigation surveys from six weeks to less than an hour. This has reduced clients’ resource requirements by more than 90%, while giving them access to better data to help reduce risks and abortive costs.
So far, Automated Site Investigation has received 100% repeat business from early-adopter housing associations and local authorities, including Raven Housing Trust, Cambridge City Council and Richmond Housing Partnership. A demo and video of this offering can be found here.
Our aspiration is to allow any organisation to be able to become an experienced developer through our platform. We want to shift the housebuilding power back to public-sector landowners, while opening up opportunities to suppliers throughout the development life cycle.