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Is custom build the future of housing?

Graven Hill project
Artist impression of how the Graven Hill project outside Bicester will look. Photograph: Facit Homes

It is Grand Designs on an epic scale. The first streets on the UK’s biggest mass self-build site are now taking shape, as a town of 1,900 homes ranging from naked black box minimalism to extravagantly unique designs emerges in Oxfordshire. Graven Hill is the UK’s boldest experiment ever in self-build and custom build, enabling individuals to design inspiring homes on pre-prepared plots, limited only by their imagination and their budget.

The idea behind Graven Hill is that while many dream about a Grand Designs home, the reality is frustration at finding a suitable plot, battles over planning permission, scrimping around for financing, and the sheer hell of building it. But at Graven Hill, a remarkably entrepreneurial local council has bought hundreds of acres of disused Ministry of Defence land, then created the plots, the street layouts, the schools, nurseries, cycleways and even a pub. The buyer picks a “golden brick” plot – they range from space for a two-bed “pocket” home through to six-bed detacheds – then designs their home and gets it fast-tracked through the planning system.

They can choose to build it entirely themselves, or find an architect and builder to construct it to their own design. They can ask the builder to take it to shell level, then finish it off themselves to save money. Or, in what is becoming the most popular option, they design and customise their own home, which is then assembled on site to a fully finished turnkey level. Graven Hill is also pioneering a “group self-build” concept, where, say, a group of teachers or nurses can form to build a row of houses.

Such is the interest in the development that Kevin McCloud of Grand Designs is on site filming a special six-part series following Graven Hill’s pioneer builders that will be broadcast later this year as the first homes are inhabited.

Karen Curtin, managing director of the Graven Hill development company, owned by Cherwell district council, says the development could “revoutionise the future of homebuilding”. The council has spent £28m buying the land, and hopes to turn a small profit while challenging the way homes are built in Britain. Other councils are queuing up to visit the site in the hope of expanding the concept across the country.

So given a bare plot, rather than the cookie-cutter blandness of most modern estates, what are people designing and building? Craig Strachan of Sylva, a design and build company active at Graven Hill, says their youngest custom-builder is 24, their eldest 73. “Every single one is very modern. People like flat roofs, big glazed areas, modern construction materials and rendering and aluminium windows. They are also much less precious about the number of bedrooms. Nearby you can see a Persimmon development which squeezes five bedrooms into the space that our buyers use for three. People want great design rather than adding more bedrooms for a supposed better resale value.”

But there are limits. Curtin references the city of Almere in Holland as the leader in Europe for custom build, but wanted to bring a more Oxfordshire feel to the project. A prescribed palette of materials means the new community will be “less wild and wacky” than some of the Lego-like, primary colour-style homes in the Netherlands.

What about costs? Until now, Dutch and German makers such as Huf Haus have dominated the UK kit-home market. But a new breed of British start-ups such as Facit Homes is now challenging them with individually designed and digitally manufactured homes made in an east London factory, helped by the fall in the pound since the EU referendum, which has effectively priced out European rivals.

Rhys Denbigh of Facit Homes says self-build and custom build smashes the traditional developer model, where one-third of a home purchase price pays for the land, one-third for construction and one-third as profit. Graven Hill reckons that pure self-builders can save 15% to 20% compared with buying a standard estate home. Hiring a firm like Facit to custom build your own project obviously raises costs, but Denbigh says: “For the same amount of money, you get a bigger place, and with much lower running costs.” All the homes have to comply with eco-standards that are much stricter than regulations on standard sites.

The price list for plots starts at £125,000 and runs up to £310,000. Buyers must also pay for groundworks, such as water and sewage, made to their specifications, which can add another £40,000 before the custom build company erects the home.

How much might you then pay for an architect and builder to put up your home? It partly depends on how much of the work you want to do yourself. For example, Beattie Passivhaus has off-the-shelf designs at Graven Hill, where it will deliver you the shell of a four-bed home for just £73,904, rising to £114,800 for a big 195sq m home. If you want it finished to turnkey standard, then the prices rise respectively to £188,820 and £272,611.

That suggests an all-in cost starting at £300,000 for the shell of a four-bed home, rising to around £350,000 for a turnkey home.

Sylva’s price list starts at about £72,000 for the shell of an 80sq m home, through to £325,000 for a fully finished 250sq m property. Further upmarket, the Marsdale family will be spending about £800,000 for their 250sq m home built by Facit once plot and groundwork costs are added.

How do prices compare with homes on conventional developments nearby? Graven Hill is in Bicester, within walking distance from the designer outlet centre the town is best known for, and another 11,000 homes are planned and under construction in what is effectively Britain’s biggest new town. It is 40 minutes by train to London and 15 minutes into Oxford. The next development along from Graven Hill is Kingsmere, where three-bedders from Linden Homes go for £349,000 and five bedders from Belling are on sale at £599,000. But those prices mask the build size; the internal floor space for equivalent Graven Hill homes tend to be much larger.

Family who wanted flexibility

The Marsdale family
The Marsdale family wanted an open-plan home

The Marsdale family, originally from the US, will be among the first to move into Graven Hill later this year. Keen fans of Grand Designs, they wanted a home with individual flair and character that met the needs of their growing family, but with busy working lives they could not find the time to build it themselves.

They bought a plot in October, then chose the design and the builder. “We have watched Grand Designs over the years, but we work in London and it’s so difficult to find suitable plots of land in the south-east within commutable distance.

“We started looking at Graven Hill a year ago as a very interesting project. They do a lot of the heavy lifting for you; finding the land, handling the planning but at the same time giving you design flexibility.”

Their plot allows for a 250sq m home – or about twice the size of a typical British three-bed semi. “We wanted a very open-plan look so we opted to have the lounge, kitchen and dining room all in one space. We could have had the upstairs as just two huge bedrooms if we wanted. We have gone for four bedrooms plus a study space that could be converted to a bedroom later.”

They used Facit Homes as architect and builder as it offered an all-in package. “If we wanted to, we could have had our own architects, but we liked the idea of a one-stop shop.”

Graven Hill - front elevation - Facit Homes
The five-bedroom design chosen by the Marsdales. Illustration: Facit Homes

‘Do your numbers very carefully’

The big challenge – or headache – for many people considering going down the self-build/custom build route will be financing their project.

This is a specialist area, and there are only a limited number of players offering mortgages. Also, these deals work in a different way to standard home loans, with the funds usually released as specific stages of the project are reached, rather than in a lump sum at the beginning.

“It’s crucial that borrowers ensure they do the numbers carefully,” says David Hollingworth at broker London & Country Mortgages. “Staying in the current home throughout the project may mean that not only is equity tied up in their home, but also that they will need to demonstrate affordability of the new and current mortgage.”

Lenders offering self-build and/or custom build options include a number of building societies, such as the Mansfield, Hanley Economic, Newcastle and Furness. Meanwhile, Virgin Money last year announced its support for custom build, and on our visit to Graven Hill appeared to be the most active lender.

Another potentially useful port of call is BuildStore, which specialises in arranging finance for such projects. “It can also offer some deals that will enable funds to be released upfront rather than in arrears, and make deals available via brokers,” says Hollingworth.

Borrowers shouldn’t expect to see the same rates as those available to standard borrowers. For example, Newcastle building society is offering a two-year fixed rate at 5.15% up to 80% loan-to-value with a £199 reservation fee, plus a £995 arrangement fee. Hanley Economic offers a two-year discount at 4.49% up to 80% of completion value, with a fee of £1,000.

This article titled "Is custom build the future of housing?" was written by Patrick Collinson, for The Guardian on Saturday 10 February 2018 09.23am

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