Founded in Suffolk in 2012 as a design-led house builder and developer, Nest Development has rapidly established itself as an award-winning property company, designing and constructing individual homes across East Anglia. We spoke to Nick Glendinning, founder and CEO of Nest Development about the way his business has developed, and how they have managed to come through the upheavals of the past few years.
How did you get into property development?
Nick: I kind of fell into it! I had been a producer of TV commercials and music videos. I moved to Suffolk with my family and had had a side hustle renovating houses for some time, which I started to find more rewarding and more conducive to family life than being abroad six months of the year filming. Nest’s first project was the conversion of a derelict chapel in Earl Soham, which I bought spontaneously at auction. That was an education in itself but a success and it has grown from there. People think it’s a huge leap from production to property development, but it’s really not that dissimilar. You are essentially putting a team of varied skills together to execute a creative idea, whilst managing the budget and programme.
What have been some of the key highlights for you?
Over the past ten years we’ve developed a broad portfolio of projects. We have converted chapels and barns, renovated listed buildings, and completed new build schemes. Working with historic buildings and converting utilitarian agricultural buildings into quality, contemporary homes is always a challenge but it’s rewarding to stand back at the end and feel proud of the work we do.
Nest’s ethos is to only take projects on where we are confident we can walk away at the end feeling proud. We work closely with the best architects and focus on using quality materials and local trades & craftsmen. We are currently working on a scheme of new-build, carbon neutral houses. It’s been an education, and we are not there yet, but I feel it’s important we take a real responsibility as housebuilders to build sustainable homes.
My creative background has been a great help on the design and architecture front. A lot of our clients are aesthetically uncompromising and want real quality. Delivering on this is more commercially challenging and we are reliant on adding value through better design and quality. Fortunately we have developed a good following of people interested in the homes we build but developing and maintaining the brand is becoming increasingly important.
It’s been motivating to receive recognition from our peers. In recent years we have won several awards including the RIBA Design Award for Suffolk in 2019 and the RICS Best Residential Project for the East of England in 2016 and we were shortlisted for the National Housing Design Awards in 2017.
And the challenges?
Creating well designed, quality homes means it’s harder to achieve the viability, as we find compromise or corner cutting difficult.
There are often design challenges, particularly with projects such as our latest scheme at Woolverstone. We started out with a range of agricultural buildings quite tightly packed onto the edge of a field. Originally constructed for agricultural functionality, such as crop storage or livestock accommodation, it is always an enjoyable process trying to determine the best way to achieve a residential development whilst retaining as much of the original character and soul of these buildings.
The actual construction of these homes proved to the real challenge. Unforeseen structural issues (not uncommon with historic buildings built for a totally different purpose and generally fallen into disrepair), Covid issues, materials inflation, etc. etc. led to frustrating delays and added costs. What should have taken a year to eighteen months, ended up taking three years. Definitely our most challenging project to date!
In general, hunting down suitable projects is extremely time consuming. I can look at a hundred different projects before I find one that’s viable and potentially the right thing for Nest. Given it can often take at least three years of work from purchase to sale, you really have to make sure you are picking the right project, in the right location, and buying it at the right price – otherwise you are in for an enduring world of pain. If you get the key decisions right, from the start, working life is a lot more rewarding.
Current issues in the development sector
Inflation is the crucial issue facing everyone at the moment. Some products, such as bricks, have pretty much doubled in price. Sub-contractors are having to factor in uncertainty and therefore tender prices are getting a little out of control. I think this will change as the big housebuilders are now scaling back but it’s taking a while for costs to settle.
The other big challenge is that the cost of sites has yet to really factor in increased build costs and the general risks that developers are taking on, such as market uncertainty with completed home sales. Development sites are still overpriced in my view, but they are also thin on the ground.
Currently we’re being squeezed from both ends. With high land values and inflated construction costs combined with a housing market in a state of flux, one has to really exercise caution. There remains very strong demand for our product but we clearly need to be making the correct decisions over the coming months.
Sourcing expert advice
We’re a small team and have leant on Scrutton Bland’s accountancy expertise to the extent that Ben Cussons, Associate Partner, is considered an integral part of the Nest family. He helps us with cash flow projections, valuations and regular snapshots of our financial position along with all kind of other accounting necessities including keeping us alert to any regulatory changes.
Like I mentioned earlier, it’s all about getting a strong team around you to provide the expertise required to help make the right moves.
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