Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Bovis gives housebuilders a kick-start

Private housebuilders struggling to secure traditional development finance from banks are turning to Bovis to help kick-start schemes, according to chief executive David Ritchie.

Mr Ritchie revealed to Construction News that his company has been doing “repeat business” in this way with some firms.

While partnering on developments at later stages is not a new phenomenon, he said the current climate has brought about a “more extreme” process.

This has involved some builders bringing his firm on board to kick-start their schemes. “Banks are saying ‘you need to do it yourselves’,” said Mr Ritchie.

He said Bovis has been buying the first tranche of land earmarked for development by private housebuilders.

This provides revenue for the builders to invest in infrastructure and any remaining units.

Mr Ritchie said this also provides Bovis with access to more immediate sites and sales outlets, which suits its growth plans.

As the sites have gained outline planning permission, his company can use its own house types, elevations and street scenes.

Mr Ritchie said: “We have done repeat business with some of the private firms, coming on board at the start of the project, taking the first phase of the development and actually helping them fund the overall project, essentially setting up the marketplace.

“What’s good is that they are coming back to us and saying ‘can you do it again?’”

The likely continued shortage of development finance meant “small guys are going to find it difficult to trade and slightly bigger guys will still need to fund the projects without necessarily turning to the bank”.

The Home Builders Federation said it was unaware of the financing model but welcomed the help for smaller companies in a tough climate.

 

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.