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Housebuilding could transform local communities for the better.

30 August, 2017

James Lidgate, CEO of Legal & General Homes, explains how we can create social value through our housebuilding activities.

The UK has a chronic need to deliver more housing at scale. This is keeping housebuilders busy as significant communities of new homes are cropping up all around the UK.

For those of us who see these large housing developments being built up in our local area there can often be a fear of what the negative impact might be on our community, such as increased traffic, loss of natural space, noise etc. There is also a feeling that developers swoop in and build more houses but don’t think about the amenities or transport that would be needed to support new residents moving to an area.

There is no doubt that delivering large housing developments will have an impact on its local environment and community. As a housebuilder we need to ensure that we are creating socially useful developments that contribute to local economies and help transform our UK landscape for the better now and over the long-term. We all deserve to live in the best environment possible.

However here lies the issue we face with housebuilding in the UK. Most housebuilders will not have a long term investment model for their developments. They will look to build, sell and then move on. There is therefore little motivation to think long-term as ultimately they will not be reaping the benefits as they will have already sold out. This is not a criticism, but a fact, this short term model works best to maximise returns quickly. 

At Legal & General Homes our investment model differs as by investing into the housing sector we are looking to invest long-term money. This enables us to be much more future-focussed with our developments, considering how our developments knit into the existing community and how we can create the widest benefits possible from our developments over the long-term.

Therefore it is beneficial for us to look at how our housing developments can support the local economy and community around an asset over the long-term. At a larger scale, this might mean looking at whether we are bringing the right amenities back into an area and ensuring we are creating vibrant and healthy communities where people will want to live. It can also be about how much green space you add, how many school visits you make or how we might be able to help the locally disadvantaged.  

We are the first housebuilder to embed the principle of social value into our business and we have now started to look at how much social value we can create at Buckler’s Park in Crowthorne, our new 250-acre housing community in Berkshire. We have started to do this by looking at three main areas:

  • Utilising a Social Value Tool Kit – so we can monitor and communicate how much value we have created to the benefit of the local community.
  • Procurement – included a weighting on social capital creation on our tendering. On two contracts alone we have created £2.895m of social value for the local community.
  • Empowering Local Community – creation of the UK’s first Social Value Charter.
  • A Social Value Charter is a long-term up front, public commitment by a development investor to deliver positive community impact to the future population in a specific named place. It is measured in a total social value number in £’s and by specifying the assets being created for the communities benefit. This is on top of what development investors have to do through Section 106 and planning obligations and is a voluntary commitment to a community.

These areas highlight the importance of working with the local authority and stakeholders starting a dialogue from the outset on how our investments could benefit the community. The community should then feel empowered to think about what they could gain from our development activity.  

By embedding social value into your business you can help regenerate derelict urban areas to improve a community, bring more jobs to the local area, maximise land density and increase economic productivity. This means that the houses we build will be more valuable as an area improves. This is why it is commercially valuable for all housebuilders to think about the impact of their investment, even if they do adopt a shorter term approach.

As housebuilders we have an opportunity to make a real difference, regenerating the UK landscape for the better and building healthy communities that we can be proud of.  However, to do this we need to engage with local authorities from the outset and to let communities speak out. We need to adopt a different mind-set. This is much more than just building houses; it is about creating first-class communities that are long-lasting and transformative.


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