This article was first published in Mortgage Finance Gazette

The BSA has been on the road recently to see how the UK’s custom and self-build (CSB) market stacks up to a proven European success story. Our trips allowed us to compare the site at Graven Hill in Bicester – one of a handful setting the standard in the UK – with several in the Netherlands. Whilst the UK has made progress in this area, the Dutch market shows what is possible for the sector.

As is no surprise, chronic underinvestment has led to a chronic shortage in housing. Most interventions have sought to increase demand, making it easier for buyers to get on the property ladder. The supply side of the ledger has been neglected by comparison. We need to build homes at scale and pace to meet the government’s target of 300,000 new homes per year.  

I have long championed the CSB market to help fill this gap as a compliment to the developer-led model that dominates the UK. CSB homes account for 13,000-14,000 completions annually – a number that would make it the 4th largest developer in the country. The Bacon Review, which made recommendations for scaling up self-commissioned homes, suggests that this figure barely scratches the surface and estimates actual demand in England as high as 100,000 homes per year. This would put a large dent in the government’s target.   

The BSA’s travels provide lessons for converting this untapped demand into more homes. Graven Hill first showed some of the progress that has been made in the market to date. Since my last visit there, headway has been made in turning a building site into a community. High quality self-build homes continue to be built and will soon be joined by retail space, a school, and social housing. Local transport has been added, and new plots are being made available. Lenders continue to provide financing and preferred builders and suppliers have built reputations in the community. In short, the market is working – albeit on a limited scale.   

As I’ve noted before, policy changes can help replicate the success of Graven Hill. These include making more serviced plots available, reforming the planning system, and improving the self-commissioned valuation process. I still believe these changes are necessary to further scale the CSB market. 

However, our visit to the Netherlands shows what can be achieved when these policy changes accompany a broader vision and full buy-in from all stakeholders. CSB makes up around 15% of all new housing in the Netherlands as compared to roughly 5% in the UK. The scale there has been achieved through a variety of innovative delivery models that could translate here. 

At Centrumeiland, for example, we saw six development models in practice, all within the same development of flats and terrace housing on a tract of reclaimed land. These ranged from individual self builds to innovative collective models. For instance, groups of individuals – either a few people or up to 40, depending on the build size – can collectively commission a project. The group makes collective decisions about communal areas and overall design, but individuals maintain control over their own units. In the ‘co-commissioning’ model, self-builders jointly commission a building with a commercial developer. The developer takes on financial risk, purchases the land, and selects an architect and contractor. Individuals have input into the building design and layout of their units. Alternatively, people can form a co-operative to build and manage a property, with individuals then renting units from the co-operative organisation.  

A site in Uithoorn utilised another unique model. A developer purchased an unused primary school from the local municipality and created 17 shell flats. Self-builders then commissioned the renovation of individual flats. Interestingly, the project contained three affordable units. Tenants in these flats also complete the refurbishment themselves with a small budget from the developer. Tenants then rent the units with an option to buy after completing the renovation.  

In a development at Ypenburg, terraced housing, semi-detached and detached plots sit alongside cohousing apartment blocks commissioned by groups of self-builders. Affordable custom-built terraced housing offers an option for low-income buyers. These homes are offered on special lease terms with the local municipality that function similar to the shared ownership model.   

Each of these innovative models could boost the CSB market in the UK. Importantly, they have the potential to bring CSB within the reach of more people, expanding the market to those lacking a Grand Designs budget. The common thread, however, is the collaboration and commitment of all stakeholders in the housing sector. This is particularly true of government and local authorities, who fully support the expansion of CSB in the Netherlands, often providing funding and other incentives to the market. The Dutch show how much farther we can go and provide inspiration for a transformative CSB market in the UK.

More information

Graven Hill - https://www.gravenhill.co.uk/

The Bacon Review - https://www.gov.uk/government/publications/independent-review-into-scaling-up-self-build-and-custom-housebuilding-report