Darren Smith Homes is one of the best small builders in Britain. Sharon Dale reports on its success and survival.
When TV presenter Jonathan Ross called out Nigel Smith’s name at the new-build industry “Oscars” in London recently, the extra loud whoops and cheers may well have been audible in his home town of Mirfield.
Nigel had notched up a first for Yorkshire by beating 16,000 site managers from across Britain to be declared a Supreme Winner in the National House Building Council’s Pride in the Job Awards. He was the first “small builder” from this region ever to win the prestigious prize.
His role as manager at St Paul’s Lock, a canalside development of over 55s apartments in Mirfield, impressed the judges, who praised his attention to detail. The site is the latest venture by Darren Smith Homes, which is co-owned by Nigel and his brother, Darren.
“We used to joke that we were just a couple of brickies who had built a few houses but we always prided ourselves on quality, professionalism and attention to detail. This award is a brilliant testament to how far we have come,” says Nigel.
Not only are the pair highly successful small developers, their Mirfield-based business has managed to survive the highs and lows of the housing market, including the last recession.
Darren, 53, says: “About 18 months before the property crash I started thinking that the bubble had to burst. We had a reasonable land bank, so we stopped buying sites and backed away from house building. One of our strengths is that we have construction skills, so we can switch from developing to being contractors and jobbing builders and that kept us going in the recession.”
They started developing again in 2010 and built some townhouses at Rasley Court. “They bucked the trend and proved that quality sells even in hard times,” says Darren, who followed his father and grandfather into the building trade and set up as a one-man band at the age of 16.
He went to college three days a week to learn bricklaying, electrics, plumbing and joinery and worked the other four days. When Nigel left school three years later, he joined him. The leap into new-builds began when Darren was just 20.
“I started off doing property repairs but the dream was to build houses and so when a small piece of land became available I went to the bank for a loan and my dad stood as guarantor,” he says.
The pair of semis sold right away for £25,000 each.
The secret of their success is that they have stayed local, know their market and have built up a reputation for good quality homes. The brothers employ 12 people but the construction skills shortage is a major concern. “Finding good people is not easy and if you compromise it impacts on quality,” says Darren. “Apprenticeships were already in decline when the recession hit and now the older generation of builders is retiring. I think we should teach building skills in schools. Not everyone is academic and I am a prime example. I left school with no O’levels.”
The other threat to small developers is the difficulty in finding loans for development. Thanks to equity and a great track record, Darren Smith Homes has funding from a Swedish bank.
“Conventional UK banks are not interested in lending to small builders and yet they could make a big contribution to tackling the housing shortage. Instead, that’s being left to volume builders and for them it’s all about numbers for the shareholders, whereas we build with heart and passion and what we deliver matters because it’s all about reputation.”
He and Nigel secured backing for the £30m St Paul’s Lock scheme, which is well underway. The flats have been a big hit with buyers. They are bigger, a two-bedroom is 1,000 sq ft, and more luxurious than most similar over 55s developments. The service charge is also much lower at £1,250 a year. Property prices start at £225,000.
“That demographic is growing and we could see there was a gap in the market in Mirfield,” says Darren. “The service charge is low as we are going to manage the apartments ourselves, There’s no way we’d leave that to anyone else. We like to be hands on.”