Developer AC Lloyd Group closes housebuilding operations in wake of housing secretary’s decision last month

A long-standing SME housebuilder whose major site was subject to a “call-in” by Michael Gove late last month has decided to shut up shop, BD understands.

Several independent industry sources have said that £33m-turnover Warwick-based AC Lloyd Homes, which last week withdrew its application for 200 homes at Chesterton Drive, Whitnash, Leamington Spa in the wake of Gove’s call-in decision, has now decided to shut down entirely.

However, it is understood the decision does not affect the wider AC Lloyd Group, which also acts as a land trader and commercial developer, and will continue to trade.

gove snipped

Source: Number 10/flickr

Housing secretary Michael Gove has now intervened several times on schemes, citing design reasons

The firm has not commented on the news, however, Paul Brocklehurst, chair of the Land Promoters and Developers Federation, said in a post on LinkedIn that “AC Lloyd has taken the decision to withdraw from housebuilding activities after 75 years”, adding that “the company’s strategic land, commercial development and investment businesses are unaffected”.

The decision to shut comes despite accounts for the year to September 2022, filed by AC Lloyd Homes, stating the company enjoyed a “very sound result” for the year, recording profit of £9.9m on turnover of £32.7m. But the results statement identifies the Leamington Spa site as likely to be ready for construction “during 2023”, something which is now not possible given the call-in.

The Chesterton Drive application was called in on 11 May despite it having received outline approval, and the local authority having resolved to grant reserved matters approval back in December.

Developer AC Lloyd withdrew its application for full planning at the end of last month, with the decision confirmed on Warwick District Council’s website in the last week.

Accounts filed by AC Lloyd (Asset Management) Ltd, which publishes consolidated accounts for the whole group of businesses, shows that the housing business appears to have produced a large proportion of the group’s profit and turnover. The Group reported pre-tax profit for the last year of £11.7m, on turnover of £42.9m, and employed 47 staff.

It is not known if staff roles will be put at risk by the move to shut the residential business down.

The controversy was sparked by Gove’s intervention in a 165-home development by Berkeley Group

The decision by AC Lloyd to shut its residential housing business comes amid controversy in the housing sector over the Gove’s decisions to call-in several schemes on design grounds, and his wider planning reforms.

The controversy was sparked by Gove’s intervention in a 165-home development by Berkeley Group, which he now looks set to rethink. The developer of a planning proposal for 150 units on five hectares of land south of Old Mill Road, Sandbach in Cheshire East, also called in on similar grounds has pledged to fight Gove over its proposal.

AC Lloyd home

A development by AC Lloyd Homes

The LPDF’s Brocklehurst added: “Housebuilding is a capital and operationally intensive business with high fixed costs. For a medium sized business with perhaps three to five sites any delay to one can seriously impact cashflow to meet monthly fixed costs.

“When the delays within the planning system (including discharge of conditions), combined with other regulatory burdens, utility drawdowns, politics and cost increases are overlaid then the impact on a small or medium sized business becomes magnified.

“It is these issues that the government (or a future government) needs to resolve.”

AC Lloyd declined to comment. The Department for Levelling Up, Housing and Communities has been contacted for comment.