KEY LEARNING POINTS
- Seek out good local construction professionals that are willing to provide solid, independent advice to potential private homebuilders. Constructing a house requires a lot of practical, technical and contractual knowledge, and private homebuilders often need someone they can trust to guide them
- Identify suitable experts who could become ‘Process Advisors’ for groups that form in your area. Take soundings with local independent project managers or surveyors to see if they might be interested in widening their skills to help groups, or track down some of the UK experts that a have experience of working with groups. You could also explore if it’s worth importing an existing Process Advisor from Europe to work with a group
- People who have worked in estate agency environments are sometimes attracted to the less pressured/more flexible working possibilities of a council-run private homebuilding information facility or Plot Shop
Most people who want to organise a new home for themselves are not construction experts. They rarely know much about the planning system or construction contracts, the legal issues associated with buying land, how to secure finance, or the cost implications of different design and specification options. Expert support can build confidence, help reduce risk and accelerate projects.
There are several ways guidance can be provided: –
- Support through the plot buying process
- Technical advice during the construction stages
- Specialist help to streamline the way groups are formed and how they secure finance for their projects
- Training courses and other information sources
At present there are few really good independent advisors available in the UK. In Continental Europe, however, three distinct types of expert advisor have developed to address these needs – Buyer Coaches, Technical Coaches and Process Advisors. This Briefing Note explains each of these, the skills they need, and the value they bring to the process.
Local councils in the UK may want to reflect on the roles each of these performs and assess if the European approach will work for them too.
This is one of many Briefing Notes that explain resourcing, planning, land, finance, demand, marketing, consumer support and various technical issues. To see the full range of guidance click here.
For the purposes of this Toolkit we have made the following definitions:
- ‘self and custom built homes’ are properties commissioned by people from a builder, contractor or package company (this is known as ‘custom build’ housing). When people physically build themselves, sometimes with help from sub-contractors, this is known as ‘self build’ housing. We call all these people ‘private homebuilders’.
- ‘serviced building plots’ are shovel-ready parcels of land with planning permission, laid out and ready for construction with access and utilities/services provided to the plot boundary. Some private homebuilders just purchase a plot; others opt for a ‘shell’ home (that they then finish off), or they select from an extensive menu of options offered by developers/builders.
- ‘group projects’ mean homes built by private homebuilders who work as a collective.
Statutory definitions are provided in section 9 of the Housing and Planning Act 2016 section 9 which amends the Self-build and Custom Housebuilding Act 2015.
Most people understand the conventional house buying process, but they may not be familiar with the more complex issues involved in acquiring a plot, and then organising the construction of a new home. For example, they may need advice on which plot would suit them best, the relevant planning restrictions on the plots, the timeframes they have to construct their home, when deposits need to be paid, when final payments are required, and many other issues. To address this several councils in the Netherlands have recruited ‘Buyer Coaches’ to guide private homebuilders through the process.
Several councils in Holland have a range of plot opportunities available, and their Buyer Coaches often sit in, or run the ‘Plot Shops’ that they establish to market these plots.
Potential purchasers use the Plot Shops to get all the detailed information they may need about the plots they are interested in buying – their sizes and precise locations, access requirements, ground conditions, planning/design issues, costs, timescales, finance options, and a whole lot more.
The Buyer Coaches are usually people who have previously worked in estate agency, or have staffed the show homes that major housebuilders often set up. With this sort of background they usually have some technical property knowledge, and they are often good sales negotiators.
Many people who work in the private residential property sales sector find it quite high pressured, with tough targets to hit, and their salaries are often partly based on commission payments (ie. linked to the number of sales they achieve). The council-run Plot Shops are seen as a ‘less pressured’ working environment, and we understand none of the staff have a commission element to their salaries. Consequently it has been fairly easy to recruit staff that didn’t enjoy the cut and thrust of estate agency/property sales showrooms.
The work also suits people who want to work part-time, or do a job share. Several of the Buyer Coaches in Holland are parents who have returned to work, and now find the hours fit in well with their family commitments.
Buyer Coaches have to be available, though, when the customers are going to be around. This means they need to be willing to work shifts on Saturdays (and perhaps Sundays too) and also one or two late evenings each week.
The Buyer Coaches are usually the main point of contact for most potential plot purchasers, so they have to be personable and welcoming, and knowledgeable of each and every plot, and all the potential issues that are associated with it. They also need to be able to clearly explain the ‘journey’ for potential purchasers, and carefully manage their expectations.
For Buyer Coaches to be effective, it is vital that the council’s team has thought through, and pre-prepared all the documentary information they may need.
The Buyer Coaches’ role is to help people to identify the plot they want to buy, and then they ‘hold their hand’ throughout the reservation process – from taking their initial inquiry or reservation details, to securing a deposit from them, and right the way through to the ultimate sale of the plot. For most plot purchasers the Buyer Coach will be their only point of contact.
They also need good administrative skills as they must accurately record the details of potential customers, and keep a clear record of progress throughout all the stages of the sales journey. They can also prepare draft documents or contracts (based on agreed templates). They must be willing to chase purchasers who (for example) have not returned documents, or haven’t paid their deposits.
Buyer Coaches need to be good on the phone and they often act as receptionists for the whole team – handling the initial enquiries, and setting up appointments for people to come to the Plot Shop.
Many people who have worked in estate agency environments are well suited to being Buyer Coaches. Recognise that you will need to prepare a lot of very clear factual information to support the coaches
Once someone has bought a plot, their next challenge is to work out exactly what to build, and the costs, secure the necessary permissions, arrange their finance, and hire a contractor to deliver their home. This stage of their journey requires them to find an honest advisor who has a wealth of practical construction and procurement skills.
In Continental Europe a new professional adviser has emerged that provides this service to plot purchasers – the Technical Coach (sometimes also called Building Coach).
Many of them are retired construction professionals, now working as freelance consultants providing robust, independent advice to novice private homebuilders.
In some places, where councils are selling plots for affordable housing, they require the purchaser to hire a Technical Coach to ensure the project is delivered within budget.
What do they do?
The main role of a Technical Coach is to manage the budget, and to procure suitable contractors and materials. Typically their work includes: –
- Developing a realistic budget for the project, based on any finances their client may already have, and what they may be able to borrow
- Evaluating the most appropriate type/size of building their client can afford, and the optimum way to procure it. This could be, for example, a kit home, a ‘catalogue design’ from a builder, or a one-off architect-designed home
- If an architect is required they will help the purchaser identify a suitable one, draw up the Brief and manage the design process. They will also double check any construction estimates the architect produces
- Securing any permissions that are required – for example Planning and Building Regulations
- Providing estimates, budgets and any relevant spreadsheets for the purchaser’s lender
- Engaging with utility providers to ensure services are provided when required
- Drawing up contracts and evaluating tenders from suitable/reliable builders, and they will organise a ‘value engineering’ exercise (if necessary) to ensure costs keep to budget
- Where homes are being built in terraces they will liaise with the Technical Coaches involved on the adjoining properties to see if private homebuilders wish to build a party wall (rather than two walls with a small gap); or advise them to work together to collectively build the foundations and other features (as this can generate significant cost savings)
- If there are any ‘design clashes’ with the adjoining properties (for example gutters on one home not tying up with those next door) they will try to resolve these before work begins
- Once construction starts they oversee the work, check the quality and agree when stage payments can be made to the builder
- At the end of the construction work they co-ordinate the snagging process to ensure everything is done to the agreed standard
- They also take care of any final certification processes, or relevant taxation issues
Some prospective plot purchasers appoint a Technical Coach before they go to the Plot Shop, to seek advice about which plot is going to be best for them.
In the Netherlands councils build up a list of approved or recommended Technical Coaches – for example in Almere there are about six available. Many of them have had 40 years experience of the local construction industry, they know all the reliable contractors, architects and materials suppliers, and they are good at negotiating prices and contracts. Often they have a background in quantity surveying, so they have a good understanding of what a building should cost. Their overriding aim is to ensure good value and keep projects to budget, and in most cases the savings they deliver more than cover their fee.
The Technical Coaches also provide good feedback to the councils by periodically meeting with the team in the Plot Shop to give feedback, identify any common issues, and to work out ways to resolve them.
There is a mini case study on how the Technical Coaches support the ‘I Build Affordably’ (IbbA) initiative in the Netherlands available in our briefing note on Ground leases and other ways of facilitating land more affordably.
What do they charge?
In the Netherlands the fee is currently €3,500 (£2,550) for a modest terraced home costing €185,000 (roughly 2 per cent of the value of the completed property).
Try to identify a number of good local construction professionals that are willing to provide solid, independent advice to private homebuilders. Constructing a house requires a lot of practical, technical and contractual knowledge, and private homebuilders often need someone they can trust to guide them
When groups of people come together to try to get a collective private homebuilding project off the ground it can be especially challenging. In the early days of a new group, it is common for them to struggle with all the many complex issues they face. For example: –
- What is the best legal format to adopt (should they set themselves up as a normal company or a community interest company, a housing association or a charity, a community land trust, or one of many other potential legal formats?) There are many options, and each has its pros and cons
- What finances can they (realistically) muster between them, and who might be willing to lend them money? What grants or other assistance might they qualify for?
- Where might they acquire land, and what should they pay for it? What professionals (for example, architects or lawyers) should they hire, and what fees would be reasonable?
- How will they decide (between them) on the design of the homes they want to build? Will they all have a say in every detail; how will they resolve disagreements?
In recent years in the UK numerous fledgling groups have formed, and many of them have gone round and round in circles, often taking years to get themselves up to speed, and in a position to actually build. A high proportion of initially enthusiastic groups fizzle out and disband before they ever get to this stage
In Continental Europe a new professional – usually called a Process Advisor – has emerged, with a set of skills that really helps groups to deliver their projects.
A good Process Advisor can do the following: –
- Advise the members on the appropriate legal structure to adopt
- Agree the group’s objectives; defining exactly what the group wants to achieve, and its priorities
- Help them to focus in on what they can realistically afford to build, and to double check their financial resources and their likely access to other funding/loans and grants
- Clearly explain the whole process to all the members of the group- which requires strong communication skills. They can also help identify any current members that might not be able to participate (for practical reasons), or are unsuited to the objectives of the project. If necessary they can help the group recruit new members that will fit in and will have a realistic chance of financing their share
- Help to manage the group, often splitting members into smaller panels to manage discrete elements of the project
- Usually act as the group’s bookkeeper – collecting membership fees or any deposits or other contributions that are required to fund the work. They will also usually draw up a robust ‘business plan’ that shows how the project will be delivered and funded
- Provide well-established contacts with potential lenders, and assist with the submission of a sound business case for funding
- Advise on the planning process, compliance with the building regulations and other technical/practical issues. They will also be able to advise on taxation matters
- Advise on the use of architects and other professional advisors (and contractors), and the fees that they should charge, and help with negotiating contracts/discounts
- When the project starts on site they will usually provide regular updates for all group members and manage the budget, checking estimates against invoices, chasing people who need to make payments and running the group’s main bank accounts. Some Process Advisors only help up to the appointment of a main contractor; others provide a Management Contracting service, hiring all the sub-contractors etc. This can save the group money (typically 10 per cent), but will extend the role and cost of the Process Advisor
- During the project they produce regular financial updates (actual costs and agreed budgets) for the group and any lenders that are financing the project
When the concept of group projects first evolved in Europe local architects often took on this role. Now most councils don’t consider architects to be best suited to be a Process Advisor, especially if they are also the designer of the project. This conflict of interest can result in the group not receiving impartial advice, and there have been some examples of architects pushing their design, rather than looking after the broader interests of the group. This does not mean that an architect cannot be a good process advisor; but groups should be wary of employing their project architect to also perform this role.
The skills of a good quantity surveyor or project manager, or someone with a property development background are probably best suited to the role; though its often hard to find people like this who are also good at managing a group, and have excellent communication/motivation skills.
In the Netherlands some of the banks that provide finance for groups insist on a Process Advisor being on board (and often they will provide a list of their own approved Process Advisors for the group to select from). Their fees are around 3 per cent of the construction cost.
In Germany professional guidance is commonly provided by building support managers or ‘Baubetreuer’. A license is required for a Baubetreuer to practice. Although the majority of the new homes are built by contractors who have their own project managers, Baubetreuer are used increasingly by private homebuilders, most commonly on building group projects. This is because most lenders, and councils that sell land to building groups, like a Baubetreuer to be part of the team to ensure it is delivered on time and budget.
A Baubetreuer typically provides two types of support: –
- Financial assistance, covering: –
- Financial project planning
- Applications for funding
- Tax advice
- Contractor selection and cost estimates
- Payment of invoices
- Technical assistance, covering: –
- Preparing applications and securing required approvals
- Tendering and allocation of contracts
- Construction supervision
- Overseeing any required inspections
- Acceptance of the quality of the work on behalf of the client
- Snagging and settlement of warranty claims.
Fees are calculated under the German ‘Published Fee Structure for Architects and Engineers’ (HOAI) and span a range of activities, from basic evaluation of the project to its completion.
Typical costs of a Baubetreuer are about 0.5 per cent to 1.5 per cent of the total construction cost. This works out at about €100 per sq m – roughly the same as the architect.
Try to identify suitable experts that could become Process Advisors for groups that form in your area. Take soundings with local independent project managers or surveyors to see if they might be interested in widening their skills to help groups, or track down some of the UK experts that a have experience of working with groups. You could also explore if it is worth bringing in an existing Process Advisor from Europe to work with a group.
TRAINING COURSES AND INFORMATION SOURCES
Anyone who is planning to organise the construction of a home needs to quickly build up a lot of knowledge. For example, they need to have a good grasp of how the planning and building regulation systems works, how to budget and secure finance, the various methods of construction, and much more. Councils can help private homebuilders to develop this knowledge and understanding in a number of ways: –
- Signposting them to suitable training courses or information centres
- Encouraging them to attend some of the many self build exhibitions that are staged around the country
- Suggesting they visit the National Self Build and Renovation Centre
- Encouraging them to read the main self build magazines, websites and guidebooks
Training courses and information centres
There are some useful training courses aimed at private homebuilders (and those keen to help them) run by the National Self Build and Renovation Centre (NSBRC) in Swindon.
These include a suite of Project Management modules aimed at people who are about to start the construction phase of their project. The modules explain the basics of the various construction methods, budgeting, how to control expenditure, how to reclaim VAT, how to hire in a contractor and sub contractors, and site safety issues.
The Centre also runs regular three day long courses that are designed to introduce private homebuilders to the whole process – from how to find a plot, the design process, the planning system, building regulations, eco issues and how to hire and manage a contractor.
It may be worth recommending potential private homebuilders pay a visit to the National Self Build and Renovation Centre (NSBRC) – www.nsbrc.co.uk. It is open throughout the year and the displays there explain the various methods of construction – from foundations, through drainage, to the different options for walls, roofs and internal fittings. There are also two show homes, and lots of relevant products on display.
Other training courses are available across the industry, for example Potton’s Self Build Academy offers seminars and workshops for private homebuilders.
Self build exhibitions, websites, magazines and guidebooks
There are about a dozen regular self build exhibitions staged around the country every year. These can be useful for private homebuilders to attend as they have lots of exhibitors, free seminars and often provide an ‘Ask the Expert’ facility.
Details of forthcoming courses, exhibitions and talks are listed on the Events page of the Self Build Portal – www.selfbuildportal.org.uk . The ‘More Information’ section of the portal also provides details of the various specialist self build magazines and other self build websites that might be helpful. It also has details of the many TV programmes that are regularly broadcast.
The Scottish Government has a good general introduction to the self build process. http://www.gov.scot/Topics/Built-Environment/Housing/BuyingSelling/self-build/guide
There are many books that are designed to help private homebuilders navigate the complex process of building a home. The ‘Housebuilder’s Bible’ is regularly recommended as the best overall guide.
Third sector private homebuilding projects
De Flat, Amsterdam
Newton Close, Bicester
Self-Help Housing in Goshen, California
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: