Newton Close, Bicester

KEY LEARNING POINTS

  • Don’t ‘over manage’ a project like this. With hindsight the council feels it offered too much support, and some of the self-finishers took advantage of this. If the full cost of the team’s time was included in the figures the development probably would not have been viable
  • Check the type of homes people are seeking in advance and adjust the project to meet the demand. Although Newton Close offered both two and three bedroom options, there was more demand for the smaller properties
  • Be careful when you go public on the price of the homes. In this case the work was delayed for many months before work began (and there were further delays while on site) so by the time the homes were ready to occupy local house prices had risen significantly
  • A tool sharing ‘library’ was established to save all the self-finishers buying/hiring expensive equipment, but this resulted in additional administration/staffing costs. Many tools were damaged or lost
  • You can de-risk the ‘shell building’ stage by using a fixed price Design and Build contract. Cherwell would not go down the Construction Management route again.
  • Brief the self-finishers clearly and explain exactly what is expected of them. Be clear about timeframes, quality standards and what will happen (and who will pay) if they don't comply
  • Simplify the self-finish process and don't mix up self-finish tasks with those that your own contractors need to do (for example, get the walls plasterboarded and skimmed by your shell contractor, rather than require the self-finisher to initially fix the plasterboard, and then arrange for your plasterers to skim)
  • Provide a training programme that closely matches the skills the self builder will need to self-finish their homes
  • Recognise that utilities companies can have a big impact on a project – causing delays and/or cost overruns. Shop around, and manage them meticulously

INTRODUCTION

Cherwell District Council set up the Build! programme to explore various ways of helping local people to build their own homes. There was a lot of interest in the council’s big Graven Hill project, and in the lead up to this, the council was keen to trial different approaches and learn which worked best.

Many of the Build! projects involve small refurbishments or conversions of existing buildings. The Newton Close project was the first completely new build scheme. The site forms part of a major expansion to the south of Bicester – in an area known as Kingsmere.

The homes are typical of the properties developers traditionally build – two and three bedroom, mostly terraced or semi-detached and between 79 and 101 sq m. The price of the homes ranged from £190,000 to £255,000 (which worked was significantly less than equivalent local market housing).

A successful arrangement was established with Buildstore who helped arrange good value mortgages for the purchasers. Most of the purchasers ended up with a 50 to 75 per cent share of the property. For a £200,000 home, and a 50 per cent share, this meant they had a mortgage of £85,000 (£100,000 minus the £10,000 self finish discount, and the minimum five per cent deposit of £5,000), and they paid rent on the other 50 per cent. Typical monthly mortgage repayments were around £550, plus rent of £100 per month.

The council also trialed various training courses for the self-finishers, and set up a ‘tool library’ (to reduce the need for individuals to buy or hire equipment).

The Newton Close development has broadly been a success; the objectives were met, the scheme was delivered and the residents have formed a close-knit community with homes they are proud of.  Several families have reported savings of more than £400 a month due to reduced mortgage/ rental prices and cheaper fuel bills because of the homes’ energy efficiency standards.

However, the project took some time to get off the ground. It was initially difficult to find a building contractor willing to take it on (as they had concerns about managing the self-finishers) - so in the end the council opted for a Construction Management approach, hiring its own construction team to oversee the work of the various sub-contractors it employed. This was ultimately quite costly and required significant levels of support and management time – and even then the quality of some of the self builders’ workmanship was poor (and needed rectifying).

SUMMARY

This development was initiated by Cherwell District Council as part of its ‘Build!’ programme. It provides 21 shared ownership ‘self finish’ homes. The Council organised the construction of the watertight shells, and the residents then finished them off – fitting the plasterboard, the kitchen units, installing the flooring, doors, architraves and skirting boards, and doing all the decorating, tiling and landscaping. In return the homes were discounted by £10,000.

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Initiator: Public Sector

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Scale: Medium

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Site: Suburban

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Affordability: Intermediate

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Opportunity: Individual

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Built Form: Detached and Semi-detached and Terraced

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Country: UK

Key Statistics

Completed  2015

No. Units   21

 

Definitions

For the purposes of this Toolkit we have made the following definitions:

Location 

The site is located on the edge of the large new Kingsmere housing development to the south of Bicester, close to the Outlet Village. Access is off Middleton Stoney Road, OX 25 3TH.

The site The site
The homes are arranged in short terraces. The ones on the west of the site overlook a parkland area The homes are arranged in short terraces. The ones on the west of the site overlook a parkland area

Homes

There are 14 two bedroom properties and seven three bed homes. All of them are timber framed, and are clad in brick, or rendered.

Sizes range from 79 sq m to 101sq m. The properties are conventional in layout with kitchen, dining and lounge areas on the ground floors and bedrooms and main bathroom above. Compared to equivalent developer homes they are a little larger, and built to a higher specification. The properties comply with the Code for Sustainable Homes Level 3, and all are fitted with a gas Combi Boiler.

The purchasers could not adjust the layouts or move the internal partitions, but they could individualise their homes by selecting their own kitchen fittings, internal doors and decorations.

Typical house plans Typical house plans
 

The Self-Finish Work

The purchasers were required to complete the following works: -

  • Fitting the plasterboard and insulating the internal walls (the council then hired a plastering sub-contractor to skim the walls)
  • Fitting kitchen units
  • Doors, architraves and skirting boards
  • Landscaping gardens, including fencing and paving
  • Painting/ decorating

Those taking part had to convince the council that they had the time available to do the work within the agreed timeframe (this became a bit elastic in the end, as there were delays across the site). They also had to commit to do the work to the required standard. Many of the purchasers had help from friends and family and one or two hired in their own sub-contractors to assist them.

All the basic building materials to finish their homes were supplied by the council, as part of the cost of the home. The council’s site manager ordered these, and arranged for deliveries.

This approach didn't always work smoothly, as the self-finishers often had to complete work before the council’s sub-contractors could get on site (for example they had to fix the plasterboard, before the plasterers arrived). In several instances the work was not to the required standard, so re-working was required. There were also some problems when the plumbing was connected, as nails used to secure the plasterboard had punctured some pipes. Where the workmanship was below par the council stepped in to do it to the required standard.

On its next project Cherwell has adjusted the range of work the self-finisher does, and separated their work from the main shell contract (which will be delivered via a Design and Build contract). Once the shells are compete the self-finishers will then take over, but there will be less hand-holding, no tool library and any work that is not up to standard, and needs to be de-done, will be charged.

Two shell options are being offered on future projects: -

  • Bare Shells – where the self-finisher is provided with a basic watertight structure (walls, roof, external doors and windows, first floor, and first fix electrics and plumbing – but then they are responsible for everything else including the stairs, all internal partitions, fitting kitchens and bathrooms, second fix electrics and plumbing, decorating and landscaping). This option secures a discount of around £25,000, and a self build mortgage is available to fund the work
  • Self-finish – here they’ll just fit the kitchen, some of the internal woodwork/architraves and do the decorating, tiling and landscaping. This will secure a £10,000 discount, and can be financed using a normal new home mortgage

In each case the self-finisher will be totally responsible for completion to the right standard, within an agreed timeframe.

Site Infrastructure and Utilities Installation

One of the biggest problems the council team had was with the utilities provider – SSE. The company was foisted on the team by the developer of the larger housebuilding site (their appointment was specified in the contract), and there were many issues with them, that were only resolved – in the end – by complaining at chief executive level.

TOP TIP

Separate the work the shell contractor does from the work of the self finisher

Try to arrange for the shell contractor to do all their work before the self finisher gets involved

TOP TIP

Don't ‘over support’ the self finishers

Be clear about what they need to do, the timelines and quality standards expected, and any penalties for non-compliance

TIMEFRAME

  • Site acquired
  • Construction Manager recruited to oversee the main construction work. There were delays caused by difficult ground conditions, the utilities provider, and challenges hiring sub-contractors
  • Work begins on site
  • Self-finishers begin work completing the homes
  • Homes complete and occupied
Load More...
 

MARKETING AND SALES PROCESS

No Plans No Plans

The council allocated 1 per cent of the budget to marketing. Most of the enquiries for the homes were generated via Rightmove, or as a result of the early events/information sessions the council organised. The council’s PR team generated good local coverage.

Agents were not used (except for one home that became available when a purchaser dropped out). The council feels they were not needed.

When an enquiry was received by the council the prospective purchasers followed this process: -

  • Initially they had to register with the Help to Buy website, to check they were eligible (for example, household earnings of less than £60,000)
  • They then filled in an application form with the council, to check their incomes and local connections to ensure they met the eligibility criteria
  • BuildStore then assessed them by to ensure they could get a mortgage
  • A face to face session with the council was then organised to explain the build process, what was expected of everyone, and the level of time they would have to commit to the project
  • Provided they cleared these hurdles they could then formally reserve a plot. On this project no reservation fee was paid (on future schemes the council will require a refundable £1,000 fee, which can be used towards the deposit later)
  • At this stage purchasers could then take advantage of the training courses the council set up
  • Over the weeks and months the council would then keep in regular touch and provide updates
  • A formal Exchange of Contracts took place before building work began on site
  • Deposits were paid when the homes were completed

One of the learning points from this project was that the council went public on the sale prices too early - well before construction work began (which was delayed for many months for various reasons). In the future it will only confirm the prices once work is definitely about to start.

 

PEOPLE

Most of the purchasers were young couples or families. All of them had a connection to the area.

With hindsight the council feels it ‘molly coddled’ the purchasers too much. The training courses it set up were not particularly helpful when people began the actual self-finish work; the tool library was not successful (many tools were damaged or just vanished), and the quality of workmanship was (in some cases) poor.

A group of young apprentices were employed as part of the contract, and they sometimes got blamed by the self-finishers for poor workmanship or hold ups. In the end the council stepped in to rectify any sub-standard work.

The council also tried to help the self-finishers by allowing them on site in the evenings and at weekends, but this resulted in lots of additional time input from its own site managers (and consequent management costs). On future schemes it wants to encourage the self-finishers to do the work in normal working hours (though it will open the site on Saturdays and on two evenings).

 

FINANCE

The land was provided as part of a Section 106 agreement (linked to the neighbouring Kingsmere development), so effectively, for the council, it was free.

The homes were available on a shared ownership basis, and purchasers had to buy at least 75 per cent of the property. They also had to have a household income of less than £60,000 a year.

The rent on the council-owned portion is quite low (just one per cent of the value of the home per year). So, on a 50 per cent share of a £200,000 home the rental element per month is typically about £100 (on most similar shared ownership projects the rent would be 2.5 to 3 per cent of the value). The mortgage on the bought share worked out at around £550 per month.

Cherwell has established a good working relationship with BuildStore, who lined up a panel of lenders to provide the mortgages. Its rates were reasonable and most of the owners decided to place their mortgages via them.

Purchasers had to find a minimum 5 per cent deposit.

The council also set up a panel to local solicitors to handle the conveyances at a package price of around £1,000.

 

THANKS TO…

This case study was compiled with reference to the following sources:

Sarah McIntyre – Senior Administrative Officer, Cherwell District Council

For further information on the Build! Programme, see - www.cherwell.gov.uk/build

Other consultants involved in the project were:

Architects – PRP

Management Contractors – ABC

Training providers – ACE Training

Mortgage advice – BuildStore

M&E Contractors – FSG Property Services

Solicitors - Neasham Lloyd and Spratt Endicote

 

Further Reading

CREDIT

The NaCSBA Research & Development Programme is funded by the Nationwide Foundation and aims to promote the self-build and custom build sector as an affordable route into housing for a greater number of people in the UK.

For further information, please visit:www.nacsba.org.uk or www.selfbuildportal.org.uk