How Planning Masters Used Family Millions To Survive The Financial Crisis

When Chris Weedon was offered the top job at Chelmsford-based house builder Stonebond in 2007 he thought he’d been gifted an interesting new project by his then boss, house building legend Alan Cherry.

At the time Cherry was at the top of his game. A founding father of then independent estate agency Bairstow Eves, he had gone on to be a co-founder of a building firm that today is £1.47 billion giant and FTSE 250 company Countryside Properties.

Weedon had worked there for many years but Cherry, who had set up Stonebond as an ‘insurance policy’ should Countryside fall from grace, wanted him to jump ship, take control of the boutique developer and get it on a growth trajectory.

“I was land director for Countryside Properties  and had worked there since the 1980s setting up regions, doing land buying as well as strategic land buying, and he asked if I wanted to make something of Stonebond and I said ‘yes’,” says Weedon.

But in the beginning, what seemed like a straight-forward piece of business development turned into a nightmare.

Soon after Weedon arrived at Stonebond in 2007 the financial crash of 2007/8 descended on the housing market and soon after that the company’s financial backer Alan Cherry developed terminal cancer.

Weedon says he had a ringside seat as 90% of his competition, which were small and medium-size builders, went to the wall.

“We got through some very tough times and some of the banks at the time didn’t make it easy for any house builder,” he says. “But we were able to keep going with a few small developments using Cherry money.”

Cherry picked

On Alan Cherry’s death Stonebond was inherited by his sons Richard and Graham, who have now tasked Weedon with a new and more ambitious growth plan to reach an annual turnover of £50m and build 200 houses per annum, all within the next five years.

This may sound like small beer compared to giants such as Berkeley Homes or Barratt, but it’s no mean feat for a company that specialises in small sites of between ten and 50 homes at the moment mainly in Essex and Hertfordshire.

And it may sound like a difficult strategy to adopt given the current structural problems within the sector, but it makes sense to Weedon.

He says Stonebond’s land buying strategy is pitched ideally between sites that are too big for small builders to tackle and too small for the multiples to be bothered with.

‘Press release not policy’

The strategy would also make sense given the government’s stated aim of helping SME builders to regain their place in the housing market. But Weedon is at best sceptical of politicians’ attempts to help out companies like his.

“The government keep saying they are looking into supporting house builders like us because they know it is one way to increase the country’s housing delivery,” he says.

“They’ve talked about the planning system being forced to have a certain percentage of their housing on smaller sites but that’s proved to be more press release than policy.

“They have also talked about giving us funding advantages through housing corporations, but we’ve looked into all of that and although it’s dressed up as help, it’s just another expensive way of borrowing money that ties us to responsibilities.

“But luckily for us, the new firepower of the Cherry siblings means we don’t have to worry about that.

“None of our sites in our five-year growth plan require external funding which puts us in a fantastic position.

“But don’t think there aren’t competitors in this niche. They are there but the cull of builders after the credit crunch means competition is not as hot as it used to be – there aren’t many like us left.”

At a glance

  • Stonebond has the backing of the Cherry family millions, heirs to its Countryside fortune.
  • The family’s money helped it survive the post financial crash clearout of SME developers which saw 90% go to the wall.
  • Its MD has been tasked with growing the company into a £50m turnover per annum company building 200 homes a year.

Planning politics

But Stonebond also claims to have another advantage – it’s approach to planning.

Weedon says his company has yet to lose a planning application, something it’s achieved by ‘not’ being a standard box builder; having an individual approach to sites; and thinking ahead what communities will want and be thinking before going to consultation.

“We have a dedicated team who prepare us to do full consultation exercises where communities get to speak face to face with us, and 99% of the time that includes me,” he says.

“So we get the feedback and understand the problem and concerns prior to submitting an application.

“For example, we recently won planning at a site where a previous developer had tried for 10 years and failed. I believe it was because they ignored issues such as biodiversity.

“The secret is to understand what people are worried about upfront,  rather than being forced to, or putting people’s backs up because you haven’t thought about it.”

Weedon on planning and communities

“A majority of people who come to our community consultations say they don’t want more housing in their area, but they all also accept there’s a massive housing shortage.

Pepper potting

Stonebond also claims to embrace affordable housing allocations at its sites even though ‘pepper potting’ can be problematic given that its developments are small, and buyers ‘sensitive’ to having affordable homes near them.

But it can help with planning other than in a regulatory way. Weedon says five or ten years ago affordable housing was seen as a problem for local people when planning applications were made, but attitudes are changing.

“A majority of people who come to our community consultations say they don’t want more housing in their area, but they all also accept there’s a massive housing shortage.

“If we’re delivering affordable housing as part of a site that perhaps their children can live in, then they tend to come around to a different point of view. But there’s always a hardcore 10% who can’t be persuaded.”

London calling

But Stonebond has its problems. The company’s largely London-escapee customer base is struggling to sell their homes at the moment. Weedon says the luxury high-end million-plus market is ‘very tough’ at the moment partly due to Stamp Duty, while Brexit has sucked much of the confidence out of many other buyers.

“We’ve sold a couple at £1.5 million homes but we are very nervous because the level of Stamp Duty means even wealthy people can’t quite get their head around paying that level of duty. So we’ve had to reassess our product and go for high quality but smaller homes.

“No one’s immune from the slow-down. For every house we build there used to be 10 or 15 people keen on it, and at one time all of them could buy. But now only three can and the rest have problems selling their existing homes in London. 

“We’ve got one where their grandad has lent them the deposit until they can sell their apartment in the capital.”

Despite all these headwinds, Weedon’s decades of experience in the industry shine through, particularly as he’s seen multiple recessions and cooling housing markets in the past.

He said he took the job because it sounded interesting. So far it’s not failed him.

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