Although proud of its achievements and celebrating its 50th year in business, Enfield-based Fairview New Homes is looking to the future and not lingering in the past.
Such a statement may sound strange for a company so steeped in tradition, but it is this willingness to look ahead and be unique that has seen the housebuilder remain profitable during the downturn while others have faltered.
Chairman Dennis Cope has been at the helm ever since the company was founded in 1961, leading it through numerous recessions, as well as expansions, hires and a £300m management buyout in 2001 backed by venture capitalist 3i and the Bank of Scotland.
Fairview builds everything from small studios to large riverside penthouses, but its key focus has always been to provide “appropriately priced” starter homes in London and the Thames Gateway. This strategy, as well as loyal staff, ensured the company not only survived but blossomed in the latest financial crisis.
Managing director Gerald Malton says: “We saw the downturn coming fairly early and we are a fairly prudent and realistically managed business. It was through this attitude we were able to persuade our lenders that the best thing to do was to continue working and we set out to plough ahead doing deals.”
As a result, by 2009, as most other housebuilders were tentatively stepping back into the market, Fairview started the year with £70m in borrowings and finished the year with £10m in cash. This strategy of accelerated production and driving borrowings down has continued, leaving the company in a very strong position.
Forward momentum
A unique feature of Fairview, and one that may have benefited it in the downturn, is that it buys sites without planning permission. This approach, coupled with a tight corporate structure and quick decision-making, has made sure its momentum is always forward.
Director Richard Paterson says: “As soon as something has implementable planning permission we start work the very next day. That’s always been the philosophy. By doing this we have nothing languishing on our books costing us interest and we find the end margins are better.”
However, there are changes afoot. In March 2013, two board members will step down: architectural and planning director Peter Cobb and sales director Alex Benton.
While board changes are quite common among housebuilders, once executives join Fairview they are rarely tempted to leave the family atmosphere. It is seen as the natural evolution of the company, which will see the next generation step up.
Paterson says: “It won’t change anything on a day-today [basis] and the people taking over their positions have also been in the company a number of years and are armed with lots of experience.”
In terms of projects, Fairview recently extended the number of units on projects it already holds. A further 120 units have been added to the plans for its Pulse Colindale development, while further units are being added to its scheme in Crawley.
While the company stresses that it will continue to cater for its target market, it has bigger ambitions and, over the next year, will focus on sites in London for upmarket contemporary houses.
In this vein, the group has recently acquired a site for 10 luxury houses in Broxbourne, Hertfordshire, from Hadleigh Court Residents Association, and has also acquired a site in Staines.
Paterson says: “Sites we have been offered in the past from our London network tend to be just in the first-time buyer range. While we will still work mainly in that area, we are trying to change perception and look at different products such as contemporary houses, something people in the past wouldn’t have associated us with.”
While the company remains optimistic about its future plans, it is well aware of a number of challenges facing the market.
Prices are expected to remain largely flat, with the lack of mortgage finance and the ability to secure a deposit expected to make sales in the apartment sector very slow.
Malton says: “Right now, it can be difficult being in the apartment and new home business due to banks not lending. However, our best weapon is our staff and experience. We have been through similar markets before, in the 1980s and 1990s, and we will get through this one.
“We will continue pushing our assets hard and be on the lookout for new deals. We’d expect to spend £30m on land in 2011 and we have £50m of bank facilities, so we’re firing on all cylinders.”
Fairview history
- Set up by Dennis Cope 50 years ago in 1961, Fairview New Homes has been listed on the stock market in various guises: first as part of commercial developer Frogmore Estates; then as a division of conglomerate Hillsdown; before a £300m management buyout in 2001 backed by 3i and Royal Bank of Scotland.
- In order to increase its reach and ability to acquire sites, the company bought Rialto Homes for £60m in 2004.
- Fairview is well known for pushing its deals though quickly, but in general it likes to have around 3,000 units of working land.
- Some 90% of the company’s sales in 2011 are expected to be apartments, with this number falling to 80% next year due to the nature of some of the sites it is working on.
