Common Home delivers affordable homes by omitting―or drastically reducing―several key elements of the standard development model which contribute to inflate sales prices.
These are:
Land costs—The cost of land is effectively zero, provided by the local authority and retained by them in perpetuity. Purchase price is exempt from both land purchase and unsecured finance costs. In return, the local authority receives an enhanced ground rent set at a level in compliance with the Mayor’s affordability criteria.
Profit—there is no developer, and therefore no developer profit. Included in the purchase price is a nominal fee to cover management costs, but this is far lower than the margins typically enjoyed by commercial developers.
Construction costs—we have designed an efficient, flexible, sustainable and attractive modular housing system which minimises construction time, reduces cost, improves quality and is highly sustainable. There is also the capacity for new owners to reduce capital costs further by undertaking the final finishes themselves, subject to a capability assessment. This could also provide skills and training opportunities, and to allow individuals to benefit from “sweat equity”.
Finance costs—development finance costs are limited by: reducing the build period through modular construction; reducing the sales period by forming a resident group in parallel to site construction; by raising finance from public sources at a lower cost of capital than private markets. Native’s FCA-regulated finance platform ensures complete transparency in structuring of finance throughout the development process. Once construction is completed residents are able to purchase homes through a standard mortgage – a cheaper, less punitive and more accessible alternative to a self-build mortgage, requiring a significantly lower deposit and from a wider range of lenders.
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