For a good period of time Collingwood’s Head of Built Environment, Mark Goldsmith, has been speaking with many leaders from within the social housing, building products and construction arenas. Speaking with such figureheads has provided us with huge amounts of insight and so Mark was very pleased to hear from Ann Leslie, CEO of Scottish housing provider LAR Housing Trust.
Here’s what they discussed:
Mark: Yours is a very diverse background Ann. From being a partner in a corporate law firm, to becoming a CEO in a fledgling housing charity. What first attracted you to the challenge, and what lessons did you quickly have to learn about the industry?
There can’t be too many job descriptions that include tasks as diverse as hoovering the office to negotiating £65m of private finance. But starting up an innovatively funded housing charity meant I got involved in literally everything until the team was in place. Lar is a fascinating study into doing things differently and addressing problems for an often ignored section of society. There is a growing grey area in the rental housing market for people who don’t qualify for social housing but who can’t afford private rents – we help to fill that gap by providing high quality, stable homes to a great group of people.
My time at Lar has been a very steep, but enjoyable, learning curve and we are now well into our scale up (as opposed to start up) phase. We already have 23 developments across Scotland and a further 10 either in planning or under construction. Lar is a pretty nimble organisation with an energetic, motivated staff team and a proactive, highly experienced Board of Trustees, so decisions are made quickly. Due to this, Lar has been able to do the equivalent of buying or building a new home every three days since our launch. Housing is a great industry to be a part of – full of interesting people who are always happy to help each other out.
Mark: The trust was only set up five years ago. How does it differ from a more conventional housing association, and what traction have you gained in the past couple of years?
The key difference between Lar and traditional housing associations is that Lar only provides mid-market rental properties, not social rented homes. With most of our tenants in work and only a few who are retired, we also have a smaller requirement for the care and support services which our partners in the social housing sector are so fantastic at providing. Our financial model is also very different as we are loan rather than grant funded and as such every penny we borrow to build our homes needs to be repaid. This model, with no grant funding, is tricky but it is working well.
Lar is building a very solid reputation with government, funders, construction companies and crucially tenants. We have approximately 500 homes occupied and a further 400 or so in the pipeline. Lar’s developments are in 10 different local authority areas and we have achieved all this with a small but dedicated and enthusiastic staff team of 15, three of whom were recruited during lockdown. We also have two subsidiaries now to manage more of our own construction projects and which provide factoring services, both to Lar and to others.
Mark: And so, you are completely financed from loans not grants? What investment opportunities are you looking for moving forward and how will this further injection in money help the trust realise your ambitions?
Yes, that’s right. We have a long term £55M loan from the Scottish Government at a low interest rate, to which we have added long term £65M commercial debt from Scottish Widows. With house numbers approaching 1,000, we have spent or allocated almost all of this funding now.
Moving forward we would be looking to replicate this funding structure to enable us to continue to invest in the communities that we serve – and also to provide different types of houses for our current tenants. Quite often as our tenant’s families grow they ask us if we have any larger homes close to where they are currently living as they want to stay within their communities. With more finance we will be able to build more homes for them, to reflect their changing circumstances and allow them to stay within their communities, with their friends and family. We are already doing this at a new site which we have bought in Aberdeen, where our older tenants need bungalows as they are struggling with their stairs and younger tenants are needing larger houses, as their families grow. As soon as we bought the site, we surveyed our current tenants in the area and are now building the types and styles of homes that they asked us to provide. This close relationship which we have with our tenants, is central to Lar’s ethos and if we can build houses that are designed and influenced by what our tenants actually want to live in then that is perfect – I wouldn’t want to build homes that I would not be comfortable living in.
Mark: During our original call you mentioned LAR Housing Trust actively seeks out somewhat unconventional sites, that are not always actively advertised. Can you give me examples of previous sites you have converted, and typical sites that would interest the trust in the future?
We certainly like a challenge and our aim is to enhance communities wherever we develop. We’ve taken on everything from a disused boatyard in East Lothian to former 1970s city office blocks and even a derelict church in Edinburgh. Initially we focused on turn-key projects to build reputation and numbers and that has subsequently allowed us to take on more difficult design and build projects that most others would simply walk away from. We’re currently working on converting a former hotel in Glasgow that was partially destroyed by fire and has been lying empty for many years – that development will have a gym and a roof garden so we are very excited about it. Our preference is to find brownfield sites with space for between 10 and 50 homes that will become the heart of a community.
Mark: Appreciating this is a complex and large question to end on, what major challenges do you see housing providers being presented with currently and what is LAR Housing Trust doing to overcome them?
I’ll give the obvious answer to that: the planning system is complex, expensive and hugely nuanced across the country, which costs time and adds a significant degree of uncertainly to budgets and programmes. This is particularly the case on the more difficult brownfield sites, which do not fit easily into design guide territory. Luckily, Lar is working with some fantastic planners across the country to take these sites and adapt them from derelict dangerous buildings to comfortable, safe homes and it is very rewarding to be able to work with officials who have the vision and will to make things happen.
C-19 will mean public finances will be more stretched than ever. Hopefully a financial model like Lar’s – which repays all loans so that the same money can be used again to build more houses - will be attractive to the tax payer and also to government. If we are to keep building sustainable, high quality desirable homes, patient capital from public sources or elsewhere is needed and with C-19 increasing the focus we all have in our homes, now we are spending so much time in them, I hope that future funding is still available, for both Lar and for other providers in the sector.