Sigma Homes switches focus to land and planning in response to market challenges
West Sussex-based, Sigma Homes, has announced a strategic shift, transitioning from direct housebuilding to focusing on land and planning transactions.
The decision comes in response to ongoing challenges facing SME developers in the UK housing market, particularly in the South East of England, including prolonged planning delays, rising build costs and higher interest rates.
Since its establishment in 2013, Sigma Homes has built nearly 300 homes across Surrey and Sussex, earning a reputation for high-quality developments in desirable locations. However, following a detailed review of market conditions, the company’s shareholders have concluded that the risks and financial pressures associated with housebuilding in the current climate outweigh the potential returns.
Geoff Potton, chief executive of Sigma Homes, commented: “The last few years have been exceptionally difficult for SME housebuilders. While we have successfully delivered 20 developments, the mounting challenges – particularly in planning, regulatory controls and utilities infrastructure – have made the development process increasingly unviable. Our shareholders have taken the pragmatic decision to pivot towards land and planning for the foreseeable future, which offers greater stability and reduced areas of risk. Despite stepping back from housebuilding in the immediate future, Sigma Homes remains in business.”
“We will continue to progress our live sites and uphold our excellent customer service and warranty provision for our current homeowners. However, we do not intend to pursue any new short-term land development projects in the current market. Instead, our focus will be on leveraging our expertise in land acquisition and planning, to unlock new opportunities and maintain a strong presence in the sector. We already have several exciting land opportunities for 2025, including a site with outline planning permission for 50 units in the village of Dunsfold, Surrey, and further projects in the pipeline across Hampshire, Buckinghamshire, and London Boroughs.”
Sigma Homes’ says that its decision reflects the broader difficulties facing small and medium-sized housebuilders across the UK, with securing planning permission, even for allocated sites within adopted local plans, becoming increasingly time-consuming and costly. One of its projects in Mid Sussex took 15 months to gain approval despite being an allocated site in the adopted Local Plan.
The housebuilder says that, in addition, housing associations are prioritising upgrading existing stock over investing in new developments, making it difficult for developers to fulfil Section 106 obligations. Utility providers, particularly in the electricity sector, also frequently change their capacity assessments, leading to substantial unexpected costs and further project hold-ups.
Geoff Potton added: “We’ve experienced many examples of UK Power Network, in particular, assuring us that the local grid has sufficient capacity to support a new development then some months later insisting that a substation is required. This causes unquantifiable delays and additional costs of six figures. There is no comeback to UKPN or any sense of responsibility, and SMEs are expected to absorb the additional costs.”
Source: ShowHouse