‘This is a growth story’… How Network Rail plans to become one of the UK’s biggest housebuilders

It was in May last year that the first signs emerged of what could be one of this decade’s biggest housing stories. A planning application was submitted for the Bow Goods Yard scheme in Stratford, north-east London. It went largely unnoticed by the housing sector because the scheme, a huge freight logistics hub, contained no housing.

Approved last October, it is set to see up to three million square feet of industrial and leisure space built on the last plot of land to be released as part of the 2012 Olympics legacy, all of which is interesting enough in its own right. But it was a little noticed detail in the application that could prove to be the most significant for the housing sector in the years ahead. 

Bow Goods Yard was the first planning submission for which Network Rail, which owns the land, was the main applicant. Previously, when the transport operator wanted to develop land in its ownership, it had either sold it to an investor or appointed a development partner to lead the scheme. 

Now, under the leadership of the group’s property director Robin Dobson, it is taking a much more assertive role in the development of its vast portfolio of land holdings. Dobson wants Network Rail, Britain’s largest owner of brownfield land, to become one of the country’s biggest housebuilders – and believes it could build as many as 50,000 homes.

Network Rail Property has one of the most important roles across the UK

Robin Dobson, group property director 

While this would be a smaller number than some of the nation’s biggest housebuilders, such as Vistry, which built more than 16,000 homes in 2023 alone, it is the opportunities unlocked by schemes on Network Rail sites which is making the government sit up and take notice.

Labour has vowed to build 1.5 million homes during this parliamentary term and “fix the foundations” of the country’s infrastructure in a programme of “national renewal”. Significant reforms have already been rolled out through changes to the National Planning Policy Framework but pressure is now growing on the party to prove that it can deliver on its promises.

Network Rail owns more than 2,500 station locations across the country, many of them dating from the 19th century and in dire need of upgrading. With complaints around Britain’s crumbling Victorian infrastructure getting noticeably louder in the past few years, redeveloping these sites kills two birds with one stone, enabling the construction of substantial quantities of new housing in prime locations while providing Network Rail with the means to upgrade its existing station buildings.

These schemes also require little additional infrastructure such as new roads, car parks or transport links, being already sited in the best possible locations to get around. Living next to a station means residents are less reliant on cars, contributing to the government’s aim to increase the use of lower carbon rail transport.

And Network Rail sites also happen to contain some of the best performing retail in the country, with sales growing by 13% last year and reportedly topping £1bn. “I think Network Rail Property has one of the most important roles across the UK,” Dobson says.

Building meets him at Network Rail’s headquarters within Waterloo Station, a deceptively vast warren of offices spanning several floors and stretching almost the entire 200m length of the station’s main building. A few days earlier he had given a presentation to ministers at the Department for Business and Trade on his plans to raise capital through redevelopment of brownfield sites and plough it back into infrastructure.

All the growth spots are around infrastructure. How do we invest in them? How do we unlock them?

“It resonated with them,” Dobson believes. “It was sort of all the things they want to hear about. All the growth spots are around infrastructure. How do we invest in them? How do we unlock them?” It is a relationship which the group property director thinks is “only going to get stronger”.

Network Rail has built around 17,000 homes over the past five years through a mixture of joint ventures and partnerships with many of Britain’s major housebuilders. Ongoing schemes include York Central, a 6,500-home development on 45 hectares of land behind York station which is set to be one of the UK’s biggest city centre redevelopment projects. Network Rail signed a development agreement on the £1bn scheme in April last year with Homes England, McLaren Property and Arlington Real Estate. 

In Newcastle, Network Rail is due to submit a planning application under its own name this year for 600 homes next to the city’s main station. It is also on site in Guildford, Surrey, developing a £150m build-to-rent scheme consisting of 438 homes in a joint venture with Kier Property and it recently completed 350 homes in Nottingham in a partnership with investor Grainger.

Last year, Network Rail delivered around 4,000 homes, which would put it in the top five UK housebuilders if the organisation could be classed as a housebuilder, something that Dobson is keen to do. 

“It’s about repositioning Network Rail property to be one of the major housebuilders within the UK,” he says. “That means joining the political narrative and joining the infrastructure narrative in order to deliver the right planning solution.

“We’ve had an extraordinary amount of success in a short period of time. And, for me, that’s exactly what this business should be doing. It should be enabling the unlocking of land, brownfield land, directly participating in the schemes, whether that’s building it, delivering, planning or partnering with both the public or private sectors.”

Dobson joined Network Rail as group property director in 2022, coming from property developer Hammerson, where he had worked for more than two decades. In his latest role with the firm he had been development and construction director.

He joined Network Rail when it was a net seller of land, rather than a developer in its own right. Under his tenure, Dobson says he is “completely changing that vision” by taking a much more proactive approach through partnerships and driving schemes forward under its own name.

Almost unbelievably, Dobson claims that Network Rail had “little or no relationship” with Transport for London (TfL), with which it has around 600 crossover points at station sites, before he joined. Now it has struck a development partnership with TfL’s property arm Places for London, which will be a key relationship in the years ahead.

So, where has this new drive come from? Part of it is undoubtedly Dobson’s influence, informed by his experience working in the private sector. “I’m a developer by my very nature,” he says. “So, for me, this is all about, how do you deliver, not sell?

“Why wasn’t that being done before? I think because the business now has a very different mindset. I think it’s a mindset that is about promoting regeneration but also taking a very active role in how we deliver it. And that does mean we’re happy to take a balanced degree of risk and return.” 

The fact that Dobson is doing this interview at all is evidence of this change in mindset but what is the motivation? He insists it is not due to Network Rail’s massive loss of revenue during the pandemic, when it lost billions in revenue due to plunging footfall and passenger numbers.

The property market is still in a tough place, and therefore the best returns, the best footfall and the best growth is all centered around major transportation hubs

“I think it’s more about a real recognition of the importance of investing in infrastructure and the importance of retail in the market. The property market is still in a tough place and therefore the best returns, the best footfall, and the best growth is all centered around major transportation hubs.”

Passenger numbers have now partially recovered and exceeded pre-pandemic levels in some places, including Liverpool Street station, now the UK’s busiest. It was at this site that the most high profile case of Network Rail’s new assertiveness was exhibited, when it took control of a controversial proposal to redevelop the grade II-listed station following a significant backlash from heritage groups.

Its former development partner Sellar, and the scheme’s lead architect Herzog & De Meuron, were both dropped in favour of a new, cheaper £1bn scheme designed by Acme which is promising to be more sensitive to the station’s Victorian heritage, although it still includes a 21-storey office tower which would be built over the station’s train shed.

The case highlights one of Network Rail’s biggest challenges in redeveloping its estate – the historic value of many of its buildings, which are seen as public monuments as much as transport hubs and important parts of this country’s architectural heritage. A campaign led by the Victorian Society resulted in more than 2,000 objections to Sellar’s proposals, which would have included a striking overhaul of its main concourse area designed in a markedly un-Victorian style. The plans were widely criticised across the built environment, also receiving several bruising attacks from government heritage advisor Historic England before they were finally pulled. 

Dobson said at the time that taking control of the scheme had been a “bold decision and the right decision”. But his team’s efforts to consult with heritage groups, including the Victorian Society, during the development of Acme’s new proposals – something he said “wasn’t done effectively” in the previous application – have had little effect. The Liverpool Street Station Campaign, led by Victorian Society president Griff Rhys Jones, said in November that it “cannot accept” the new proposals and described plans for the overstation office tower as “perverse”.

Did Network Rail learn from its experience with the original Sellar scheme? “With such a complex project and with multiple stakeholders, there will always be objections,” Dobson says now. “But the overwhelming response has been that it’s time to get on with making Liverpool Street station the best that it can be.”

>> Also read: We hope to be a good neighbour: how the new Liverpool Street station team is rethinking London’s most controversial project

Dobson insists that Network Rail is now “doing things differently” and needs to be “mindful” of protecting heritage while delivering its ambitions on both housing and upgrading infrastructure. But he admits that any redevelopment of a historic site is still essentially a trade off.

“There is a real balance,” he says. “These are complex stakeholders. These are complex buildings… But, ultimately, it is also our role to make sure that we invest and grow – or invest in infrastructure that delivers growth.”

If the new government’s track record on growing the economy is anything to go by, ministers are likely to agree with him. And what Dobson wants from Keir Starmer is for policy makers “to actually allow us to just get on and do stuff, to not interfere and provide red tape or bureaucracy”.

His vision is for Network Rail to take a leading role in driving growth, both through the construction of new housing and turning its brownfield sites into magnets for investments. Upcoming mixed-use redevelopments of London’s Victoria and Waterloo stations, due to be submitted for planning by the end of next year, could run into the same heritage issues as Liverpool Street. But Dobson is clear-eyed about what can be achieved.

“Whether we talk logistics, or whether we talk housing, whether we talk commercial… There’s something in it for everyone. And, fundamentally, this is a growth story.”