One development finance lender recently claimed that compared to other industries, the construction industry was slow to innovate.
Following on from this, Development Finance Today looked at whether UK developers could learn about creativity from other countries.
For example, over 80% of new single-family homes in Sweden are prefabricated, according to research from the Terner Center for Housing Innovation, published in November 2017.
The concept is also used in Japan, which builds just under 20% of its detached homes with prefabricated house manufactures, according to figures from the Department of Architecture School of Engineering at the University of Tokyo in 2017.
Modular housing has been highlighted as one of the ways of solving the UK housing crisis.
What can UK developers learn about creativity from other countries?
Nathan Priestley, CEO at the Priestley Group, said that forward-thinking Asian and Middle Eastern countries – such as Singapore or the United Arab Emirates – were steaming ahead with new development.
“A much more simplified planning process is the key to this progress, with large-scale master plans informing what can and can’t be built from the outset.
“This puts developers in an advantageous position.
“Being able to check a master plan means that a vision for a site can be brought to fruition according to what can be achieved.
- Creativity could be the key to solving the UK's housing crisis
- Are lenders allowing developers to be creative?
- Are senior lenders still uncertain about funding modular and prefab housing?
“That vision is not subject to the indecision of planning departments, as is often the case in the UK unfortunately.”
Leo Santana, managing director at Right Fit Properties, added: “Countries like the USA have been leading the industry in terms of developing creative co-living buildings with [the] quality of accommodation and facilities to suit different demographics and budgets, and this is the model we are using at Right Fit Properties.”
Quentin Keeble, construction and development director at Atlas Residential, said: “We can learn a great deal from other countries, but the most important thing is to deeply understand our own market, borrow themes and influences, but ensure they are firmly bedded in the here and now.
“We are learning a great deal from the US multi-family model for the UK build-to-rent market, but what’s most important is [that] we truly understand our own consumers’ tendencies as we adapt and implement those lessons.”
Zuhair Mirza, principal at Avamore Capital, added: “We are not familiar with other countries in general, however, we would comment that in some cases we have seen modular builds being utilised for more affordable housing.
“I think the key issue, however, in the geographies we operate in, is finding sites and getting consents.”
Alongside innovative building ideas, what funding methods could UK developers learn from other countries?
Terry Pritchard, head of origination at Lendy, said that UK developments differed in structure from most other countries and, therefore, what could be learnt from overseas was limited.
“Having said that, the idea of small investors forming a funding pool for a single site is not uncommon elsewhere, and obviously close to P2P lending.”
Alex Michelin, co-founder of CapitalRise, said that developers could always learn new tricks, and markets such as New York and Hong Kong were the best places to look for inspiration.
“In New York, for instance, development debt is much more expensive than in London/the UK,” Alex claimed.
“So, US-based developers are much more sophisticated in their financing strategies and often have a number of different tranches of debt in their projects, which can be repaid after certain milestones with cheaper sources of capital.
“In the UK, most developers only use senior debt, but the market here is becoming more sophisticated over time with more creative developers using mezzanine finance [and] equity as a way of boosting their returns and making their capital go further.”