Taken from the March 2014 issue of Housebuilder magazine.
Here at PPS Towers, we have been contemplating innovation. The last few years have seen a transformation in the PR and communications world as social media has opened new channels for communication and allowed people to praise, moan and organise in a way that was impossible a decade ago. So PPS now has its package of social media strategies to help you market homes and get planning permission.
In the world of consultancy this is relatively simple. There are few significant cost barriers to innovation. You come up with an idea, work out how to deliver it and then try to persuade clients that it is worth paying money for. But in housebuilding innovation is much harder.
Housebuilders are routinely criticised for failing to innovate. I just don’t see this. In the last few years, I can count among my clients a firm trying to build schemes that float on stilts during floods and Eider Homes, who are building lifetime homes, with doors wide enough to take wheelchairs and integral elevator shafts into which a lift can be retro-fitted as buyers get older.
But these clients have one thing in common – they are relatively small. Product innovation doesn’t seem to be something big boys do.
That is not to say that volume housebuilders are not innovative. Of course they are. But here innovation has tended to be about process. Volume housebuilders have innovated in construction techniques, design and materials. They have driven down costs and maximised value.
Occasionally the planning system has also forced innovation. Witness the rush to environmentally friendly buildings in the noughties.
But why should it be that different sized housebuilders innovate in different ways? I suspect that the answer is fundamentally about high land values. The cost of land means volume housebuilders are forced to drive down cost and maximise value to secure a return. For the same reason, they have little incentive to take risks with product.
Such innovations therefore become the preserve of the little guy, keen to find a niche and seek out buyers looking for a premium product.
And as high land values are largely driven by scarcity caused by our planning system, this would seem to be yet another problem caused by town planners. So next time a planner tells you that your product is not sufficiently innovative, tell them it’s their fault.