Father’s forecast helped firm survive the recession

The recession has claimed sack loads of scalps from the property industry –and those who have survived have done so through luck and good management

Richard Beal, managing director of Hull-based Beal Homes, also has his father John to thank for the firm’s continued existence.

He was one of the few who predicted hard times were due to hit just as it seemed that the boom would never end.

“I can remember him saying ‘there’s a whiff of recession and when it comes it will be like turning off a tap’. He was absolutely right,” says Richard.

“The priority then was to maintain strong cash reserves and that meant when the credit crunch came we weren’t vulnerable.”

The company, founded by non-executive chairman John and his brother Raymond in 1968, has continued building throughout the last five years and has also managed to cling onto its core workforce and their skills.

Although they were well prepared, it has been tough. Turnover halved from a height of £26m in 2006 when they built 130 homes to less than £10m in 2009. But they’ve worked their way back to a predicted turnover of £23m this year and expect to build 128 homes. They are also set to open a £1.5m new headquarters.

“It has been a difficult few years. The lack of mortgage availability and lack of confidence in the economy is still a challenge but we are really happy and proud that we have never lost any money and that we have kept our team together,” says Richard.

The new HQ will include a customer selections lounge, a fresh concept and a bid to allow customers to take a more bespoke approach when buying a new home.

If they buy off plan they may be able to alter internal layouts and choose everything from the kitchens and bathrooms to the flooring and solar panels.

“It’s what customers want and it will be one of our biggest innovations. The idea is to be as flexible as we can and to design and build homes around people’s lifestyles.

“Traditionally, customers go to a Portakabin on a building site to choose kitchen units and it’s all very rushed. We’ve brought the selection process into our offices and we’re giving buyers lots of choices, from where they want the walls, windows and doors to the internal decoration,” says Richard.

“Customers are much more discerning now and we’re catering for that by being incredibly flexible. It will be like building your own house but without all the hassle.”

It’s a far cry from 1988 when Richard started in the family firm as a groundworker “with a shovel and a hard hat” before working his through joinery plumbing and office duties.

Back then, buyers wanted what their parents had, a warren of separate rooms. Now they want big, open plan living kitchens, en-suites and wireless networks. Although they like contemporary style inside, most people are happy to play safe with the architecture.

“We find that they want a fairly traditional semi or detached home with its own garden and driveway.

“They don’t want the high density sites with three-storey townhouses that Mr Prescott’s planning policy dictated. Luckily, planners now accept that.”

Beal, which employs 100 people, expects to see a 30 per cent increase in sales this year thanks to well-located sites, well-priced homes for first-time buyers, with one bedroom homes from £80,000, and incentives such as New Buy, First Buy and a loyalty scheme.

They are also hoping that the Hull economy will benefit from Siemens plans to open a wind turbine plant in the city. Elsewhere, their Wolds properties are proving increasingly popular with families and retirees from other parts of Britain.

“I’m quietly optimistic about the future of the property market. I think there are green shoots of recovery,” says Richard. “Mortgage applications and approvals are increasing and I think we’re going to see more activity.”

Beal’s land team has spent the last five years taking advantage of lower prices and the company now has 530 plots with planning permission and options on a further 1,162.

They also have plans to spread out from their heartland of Hull, East Riding and Lincolnshire into West and North Yorkshire, though they have no ambition to become a volume house builder.

“The recession has made us smarter. It’s been like a diet really and we’ve had time to review and improve everything from our stock and cost control to materials and build specification.

“We’re now a much leaner and fitter business but we are happy being medium sized,” says Richard.

“We want to increase output from around 130 to 150 homes a year by 2015 and then maintain that.

“We want to focus on quality not quantity. Our reputation is far too important to us and that relies on the personal touch, which we would lose if we got much bigger.”