Show Notes
Today, Paul sits down with Philip Barnes, former UK group land and planning director at Barrett who now works part time for Savills. Together they explore the challenges and opportunities facing today’s property developers. Including discussing the stark differences between SMEs and major housebuilders, the impacts of planning reforms, environmental regulations, and financial hurdles.
They share what is really shaping the future of the UK housebuilding industry. Whether you’re an industry insider or curious about how policy and economics influence the building of new homes, this candid and sometimes alarming episode is for you.
KEY TAKEAWAYS
The economies of scale gulf between large scale and SME housebuilders is growing, making it even harder for SMEs to survive.
Developers are not enjoying large margins. That is a misconception. When margins are tight it doesn´t take much for a company to go bankrupt.
The barriers to entry are growing bigger making it really difficult for new
housebuilding firms to get established and make a profit.
Build costs are increasing faster than house prices.
Increasingly banks are pulling the plug on small developers. Some are actively lending on questionable projects knowing that the likelihood of it failing is high.
The UK housebuilding industry does not operate in a collaborative or cartel-like environment. It is highly cutthroat and driven by intense growth pressures, so expecting and basing scheme delivery on close collaboration is unrealistic.
If you're working on a set margin, and something like nitrate neutrality is an issue, that can delay you for a couple of years, long enough to make many firms go bankrupt.
BEST MOMENTS
"If you're a little guy, you can't afford to be spending fortunes on potential deals that don't go anywhere."
"Lots of abortive costs is a real operational issue in the planning system."
“Developers big and small are not building.”
"You can only get kicked in the nuts for so long before you start not liking it anymore."
"The Nature Restoration Levy and Environmental Development Plans, if done well, will massively help... My worry is that might not happen for two or three years."
ABOUT THE GUEST
https://www.linkedin.com/in/philip-barnes-70a44119
ABOUT THE HOST
Paul Higgs is a Chartered Planning and Development Surveyor with 40+ years experience in land, planning and development and a 100% success track record in winning planning consents.
Paul undertook his first refurb project when he was just 17 and then worked his way up from labouring on building sites to becoming Head of Land for renowned plc housebuilder,
Barratt Developments. He managed to escape the corporate world in 2002 to set up what is now a multimillion-pound award-winning property development company, Millbank Group.
In 2013 Paul founded the Millbank Land Academy, the UK’s first training company dedicated to property development; to teach established and aspiring developers the insider secrets the big housebuilders don’t want you to know!
Paul is also a founding investor and former board director of the industry-leading PropTech Co, LandTech, and has lectured on Advanced Development Valuations on the MSc Property Development at London South Bank University.
CONTACT METHOD
LinkedIn: https://www.linkedin.com/in/paul-higgs
Millbank Land Academy: https://www.millbanklandacademy.co.uk
Instagram - https://www.instagram.com/paulhiggsofficial
YouTube - https://www.youtube.com/@InsidePropertyDevelopment
This Podcast has been brought to you by Disruptive Media. https://disruptivemedia.co.uk/
More from Inside Property Development
In this episode, Paul once again sits down with David Birbeck, one of the most knowledgeable people when it comes to planning and development. Together, they discuss the government´s new draft Planning Practice Guidance (PPG) and how it should work in practice.
In this episode, Paul sits down with Lucas, a recent Bristol civil engineering graduate, who is considering becoming a property developer. Together, they discuss why everything in development starts with finding and controlling land, how planning policy has evolved to make that both harder and more crucial, and why today’s planning environment might actually be one of the best times to get into development despite a tough sales market.
In this episode Paul is joined by Steve Morris the co-founder and Managing Director of Linfield Construction, to discuss the viability of building a property development business later in life – especially if you come from a contracting and commercial background rather than following the more typical pure developer route.
Today, Paul sits down with former Wandsworth councillor and Pocket Living land director and the Managing Director and founder of Urban Sketch Nick Cuff. Drawing on his rare mix of political and development experience, Nick explains what a genuinely pro‑development culture looks like, and why most UK councils are not pro-development.
How can architects and developers work together to deliver projects that are financially viable, genuinely regenerative – create schemes like this that actually get built as planned?