New for-profit RP focused on ‘additionality’ not Section 106, says boss

Square Roots is currently working on three schemes in London. This includes 244 homes in Barnet, 141 units in Lewisham, and 52 in Kingston. Across all the sites, the firm is flipping a significant number of homes from private sale to shared ownership. 

Ms Richardson said shared ownership is the “initial focus” but said Square Roots wants to have a mix of tenures on its sites. “We want to make sure we have a balanced, stable community,” she said.

All of the sites have an element of Section 106. But Ms Richardson said: “We have to do the 106 element of any site... but we won’t just go and buy Section 106 from London Square or any other developer.” 

In terms of how the homes will be managed, shared ownership properties will be handled in-house by Square Roots. For rented properties, Square Roots will deal with all key customer engagement around repairs, rent collection and service charges, she said. 

However, the group will be looking to outsource the lettings, allocations and nominations process for its rented stock, Ms Richardson added.  

The firm is aiming to secure funding of £1.5bn to deliver the 3,500 homes. It has already arranged £266m for its first five projects, according to Ms Richardson. 

The funds have been secured through a deal with Hestia, a UK residential brand launched by investment firm Federated Hermes, with the money coming from the BT Pension Scheme.

Square Roots is also in the final stages of securing a fresh tranche of funding from institutional investors, with the process expected to complete by the end of August, Ms Richardson said. 

Ms Richardson is aware, however, of the current challenges of new home development – particularly in the capital.

“Build costs are increasing substantially, quite rapidly. That’s going to be a challenge for anyone in the sector,” she said. She also acknowledged that land availability is an issue. “Anything that is easy was built out years ago,” she said.  

Asked about longer-term ambitions, Ms Richardson admitted that getting to between 5,000 and 10,000 homes would be a reasonable target. “I don’t think we want to be a big organisation,” she said.

“We want to stay quite customer and community focused and we don’t want to go too far away from London and the Homes Counties.” 

Last month, Savills said it expected for-profit providers to spend around £27bn on increasing their overall stock by 120,000 homes. As of last month, there were 64 for-profit providers registered, with around 90 expected to be operating by 2027, according to Savills.