Meet the Developer — Liverpool Community Homes

Liverpool Community Homes is our greenest housing investment so far, and our third from pioneering housing developer Octevo. Last year year we spoke to its co-founder, Robert Macmaster, about how he came to set up the company — you can read more about that here. We’ve returned to ask Robert some questions about this latest project — especially its green credentials — and how Abundance investors have helped to drive that.

What makes Octevo different from other developers of social and affordable housing?

The biggest difference between Octevo and other developers of social/affordable housing is that we can develop for multiple users and are constantly looking for development opportunities.

Housing Associations are the biggest developers of affordable housing, but they only build for themselves therefore the numbers they build vary dramatically. They might build to scale one year then nothing for two or three years. At Octevo we are restricted only by our ability to fund forward planned developments — so Abundance and their investors have been very important to our overall strategy.

This country has an immediate and urgent demand for social housing, which far outstrips availability. While standard house building is based on selling houses short term, we secure our investment by ensuring the long term growth that makes our model viable.

What led you to take the green path to social housing; and what plans do you have to contribute to the UK’s Net Zero target in housing in the future?

The government plans to make new housing Zero Carbon within the next 20 to 30 years. Within that timescale, the materials, methods and costs associated with

reducing a home’s carbon emissions will come down substantially. We have taken the view that if we can absorb the costs now, by adopting a four to five stage programme for all our housing, then the long term benefits to the tenants and ourselves will be significant.

Providing a greener solution to housing has been mainly driven by the desire to reduce tenants’ running costs and contribute to our overall environment. Put simply: How can we alleviate the cost of heating and lighting a home? How can we get as close to Zero Carbon as possible?

We aim to reach Zero Carbon in the next few years, establishing us as a leader in both affordable and green housing. The green methods we have introduced in Liverpool Community Homes predict an 80–93% reduction in energy use (when compared to an average home in the UK). You can read about it in more detail here.

How have you chosen the green measures — both energy efficiency and generation — that are being implemented?

Our energy consultants search for efficient and cost-effective methods of heating and electricity using technical data for thermal insulation and heat recovery methods. The result is a home that is as close to Zero Carbon as we can get within the financial cost to achieve it.

So far all the Abundance-funded Octevo housing projects have been based in the Liverpool area. Are you working on developments elsewhere in the UK?

We have plans in the pipeline in other areas of the UK. London is a significant area for us with huge demand for social housing; the main problem is that the cost of land and development is greater there than in the Northwest. We therefore have to temper our ambitions with our ability to raise capital to achieve our goals.

How do you choose a suitable site for development?

It’s driven by demand for affordable housing. Most councils have areas of urgent need and we try and concentrate our efforts and resources in these areas as it makes planning, development and acquisition easier, allowing us to bring through developments at a faster pace than private housing.

What is your long-term vision for Octevo?

Our vision is to have developments in every major city that has an urgent need for social and affordable housing.

We think our goal is very achievable. The more sites we develop, the greater the awareness we will have in the marketplace and that will produce the investment needed to reach our goals.

What role are Abundance investors playing in helping to deliver Octevo’s vision?

Abundance investors are the cornerstone to our growth and sustainability.

We very much appreciate their interest and investment; in turn we have strived to achieve a greener and sustainable building structure that will not only benefit tenants but also the environment, something Abundance investors are clearly passionate about.

Liverpool Community Homes is your third project with Abundance. Have there been any ‘bumps in the road’ with the previous two projects and how have you addressed them?

You always get bumps in the road where building is concerned! The ground is always the challenging part of building. You can do all the tests and analyse the variables to ensure that what you are building on is stable and reliable, but you never know until you break ground.

One of our sites has been plagued with flooding from neighbouring land which hasn’t been properly maintained. We’ve had to seek the owner’s permission to put in field drains and heavy excavation to protect the site and our future tenants long term.

You can’t really predict all the potential problems; you have to be experienced enough to deal with any problems that occur, there’s no such thing as a perfect development.

Your model shows that low-carbon housing and affordability aren’t mutually exclusive. Do you think the next government should tighten new build regulations even further?

Government will be trying to introduce stricter codes in the future but most private house builders will contest these because they come at a significant cost and impact on their profitability.

Do you see Octevo as a disruptor in the social housing development sector?

We see Octevo differently to other providers: not as a disruptor but as a facilitator. The more sites we build, the greater the positive impact we can bring to councils who are under increasing pressure. Housing is and always will be a top priority for governments; councils need to deliver homes for their constantly growing waiting list, and they need partners like Octevo to do it.

Risk warning

As with any investment product there are risks. Part or all of your original invested capital may be at risk and any return on your investment depends on the success of the project invested in. You should be prepared to hold Abundance investments for their full term and investments may not be readily realisable. Estimated rates of return can be variable and estimates are no guarantee of actual return. Specific risks will apply in relation to each product. Consider all risks before investing and read the Offer Document for each investment.