35-Year Property Veteran Looks To Grow Business On The Back Of Political Change

Working as a special adviser to the government in 2009, part of Nigel Hugill’s job entailed looking at what he calls “dusty files” full of data on regional population changes. 

That led him to notice something that helped him build a £750M business, one he hopes will profit from political changes in the air in 2024. 

Back when population growth in London was drawing all the headlines, little fanfare was being given to towns about 50 to 100 miles from the UK capital that were seeing steady population growth. Hugill saw that places in Cambridgeshire and Bedfordshire would see population growth of about 1% a year over the coming decades, necessitating 5,000 to 10,000 new homes — homes that no one was planning to build.

“It’s simple maths, but people shy away from it,” Hugill told Bisnow. “The tendency is to assume all the population growth is confined to London.”

But Hugill didn't flinch. He teamed up with his former Chelsfield partner Robin Butler, and backed by private equity firm GI Partners, the duo later in 2009 launched Urban&Civic, a master development firm that buys large sites and wins planning consent for new homes, then builds amenities and infrastructure like roads, schools and health centres before selling off parcels to housebuilders.

In a £500M deal, the company floated in 2014 and was taken private in 2021. Today, it is solely owned by the investment arm of the medical charity the Wellcome Trust.

Urban&Civic bought its first site in 2009 at Alconbury in Cambridgeshire, a former Royal Air Force airfield that was the centre of U.S. air operations in Europe during the Second World War. Urban&Civic now has 14 sites totalling 16,100 acres, with the potential for 33,000 homes and 8M SF of commercial space. 

Having built a 14-year-old business based around shifts in where people want to live and work, Hugill is paying special attention this election year. The company anticipates that changes in the way governments plan for new home creation will benefit its aim of putting together large, complicated sites that need a lot of time, money and patience to turn a profit. 

Hugill, who is also chair of the Centre for Cities think tank and a former chair of the Royal Shakespeare Company, describes Urban&Civic as a “disruptor” in a housebuilding world that has shied away from investing in large, complicated sites that take years to come to fruition. Too many were burned during the 2008 financial crisis after using debt to buy too much land. 

But Hugill says the country needs such large sites if it is to build the number of new homes it needs to keep up with population growth. Even after Brexit, which slowed immigration from the European Union, the UK still sees net migration of more than 500,000 people in an average year, government figures show. 

In Huntingdonshire, the district in which Alconbury is located, a population of about 185,000 is growing at 0.8% a year. That translates into 10,000 new homes over the next two decades. Yet to build all of those homes on sites large enough for 100 units, the average in the area, developers would need to find, receive planning and build out 100 sites, a highly daunting task, Hugill said. 

At Alconbury, Urban&Civic has outline consent for 6,500 new homes and is building facilities like primary and secondary schools ahead of home construction. Big housebuilders are loathe to spend money on such amenities ahead of homes being sold, Hugill said, adding that putting them in first makes sites more attractive while helping build community and sense of place. 

The model has served Urban&Civic well so far. The value of its assets minus its debt as of September 2023 was £743M. That is flat on a year previous, but it comes as most property companies have seen their asset values drop. Over the same year, cash generated from plot completions, essentially homes on its sites being sold, was £86M, up 13% from a year earlier.

Hugill conceded that the slowdown in the housing market would affect the business, though the fundamental mismatch between supply and demand in areas where it owns land would provide some insulation. 

And as a general election approaches sometime in the next 12 months, Hugill said two policies put forward by the Labour party have the potential to benefit Urban&Civic and the country in boosting the number of homes built in the UK. 

“If you look at Labour, housing was a key policy area at the party conference last autumn, and [party leader and Shadow Chancellor of the Exchequer] Keir Starmer and Rachel Reeves were front and centre talking about housing,” he said. “They’re trying to put clear red water between themselves and the Conservatives when it comes to housing.”

One of the key Labour policies Hugill is watching with interest is a potential review of the green belt around London, with a view to freeing it up for more new home construction around the capital. 

The party is likely to push the idea that “not all green belt is equal,” Hugill said, meaning some of it is not beautiful countryside that needs to be protected.

“Grey belt” is one term being floated, referring to areas that are not biodiverse or of aesthetic value and have been protected simply because the policy hasn’t been reviewed in 75 years. Building in these areas, the kind of areas where Urban&Civic buys land, would allow homes to be built where many new jobs are being created, he said.

The second Labour policy of note, which would be made easier because of the first, is the revival of the “new towns” project. The years after the Second World War saw the creation of whole new conurbations like Milton Keynes in Bedfordshire and Stevenage in Hertfordshire. The initiative led to the creation of more than 30 such towns, and those within 100 miles of London have seen their populations grow beyond initial estimates, Hugill said. 

Labour has said it wants to promote a new breed of towns. Urban&Civic, with its experience of putting together large sites and long-term-minded Wellcome behind it, is well placed to turn the policy into reality, Hugill said. 

Labour has an easier time than Conservatives building more homes in south-east England because its MPs don’t tend to win as many seats in the region, giving it a freer hand to push through larger controversial new developments where local residents are sure to lodge appeals. The cancellation of housebuilding targets by Prime Minister Rishi Sunak following pressure from his MPs was evidence of this. 

Yet whichever party is in power, Hugill said the country needs more of the kind of schemes Urban&Civic pulls together.

“We need large sites with the amenities that people want and the civic facilities they need,” he said. “We need to encourage more disruptors, and we’ll be stepping up.”

Hugill is among the speakers at Bisnow's Build To Rent Annual Conference on 11 and 12 June, the largest rented residential event in the UK. To join, go here.