How can we make homes affordable?

[Triassic]

Another thread reports double digit price increases in material costs. This won't help with affordability! 

 

Maybe be the entry of the Chinese into the UK housing construction market will help bring costs down, who knows!

[ProDave]

6 hours ago, Crofter said:

One word: mortgageability.

 

That's an interesting one. Just because a house is built as a "portable building" does not mean it has to be rubbish. Yes you could build little more than a shed as you don't have to comply with building regs, but you could equally build a really well built super insulated building that far exceeds what building regs would require.  This is one area where mortgage companies should take the findings of a surveyor, who might well report it is a well built house, rather than saying "it's non standard" or "it's a park home" and we don't lend on those.

 

Re the portable buildings thing, it is perhaps a loophole in the caravan's act. As already linked to by Crofter, the Highland Council make it clear a "caravan" does not have to actually be on wheels, and lifting it by crane is an acceptable means to qualify as portable, as long as it fits within the size limits.

 

In point of fact you can actually build a larger "caravan" in England and Wales. That's because at some point the Caravan's act was updated there, but the Scottish version never got updates.  Surely one of the English or Welsh councils will have a similar document that will give the maximum sizes there. 

 

[Crofter]

Lenders can be very risk averse. For example, when a property is repossessed, it seems to go on the market as a cash sale and at a reduced price. Presumably because all the lender is interested in is getting back their outstanding loan as quickly as possible, and they don't want the delays or hassle of the normal surveys, EPC, conveyancing procedure. It's infuriating in some ways because it is a destruction of value, by rendering a property unmortgageable, and it only benefits those who are already cash rich and who are willing to take a bit of a risk.

So I have absolutely no expectation that I will be able to secure a mortgage on the house I am building. 'Non standard construction' sends banks running. Perhaps some form of warranty would have enabled this, but I don't know because it wasn't my plan.

 

The portable building exemption is, IMHO, a bit of a niche interest. You still need planning, which for most people is a far more important hurdle. Exemption from BR is only of benefit if you want to build something unusual, something that would not comply, or in my case where I wanted to do all of the work myself without having anybody breathing down my neck. It allowed to me avoid various fees and inspections. But most people will get professionals to design their house (in which case the BR drawings and submision is not a large extra cost, in the scheme of things) as well as to build it (and a pro builder will be a lot less daunted by the BCO than I would have been). I think that for most people the easier mortgagability would be well worth it.

[MikeSharp01]

The answer is mass production - if you can build a ford focus, with all its components, and sell if for under 20K you can gear up to make houses in the same way, mass production combined with mass customisation. If you want something more flexible you just need to look at house building robots and or 3D printing (see HERE for an example). Manual production has always been one of the key drags on better building. I was in a meeting with one of our biggest housebuilders and suggested that they fund some research into a bricklaying robot. The look I got was, to say the least, withering. The response was, in polite form, - there is no room in our industry for such things. (that was 2012) In 2014 we saw THIS and in 2016 THIS some interesting insights from the founder of company. It won;t be long though... Wi Fi wall switches will cut wiring and so it goes on. AUTOMATE or DIE and get the humans doing the higher order stuff. (PS I think we can automate accountants already, just no finance director will sign off on the development!)

[ProDave]

Another thing that skews the market tremendously, is the "help to buy" initiative to lend buyers the deposit. It only applies to new builds. The result is the few new builds in town seem to sell quickly, but "second hand" houses, even modest ones in the town seem to take a long time to sell.

 

Initiatives like this are probably seen as a "success" because they get houses built and occupied, but they do nothing to stimulate an active property market at all levels where people can sell and move up when they need / want to.

 

Is the next generation doomed to be stuck all their life in "starter homes?"
 

[Crofter]

Well that would be an improvement on being stuck in rented accommodation, paying out every month yet accruing no equity. Which, IMHO, is the bigger problem.

[NSS]

As @Crofter has pointed out, there's a big difference between what is desirable and what is necessary. I too suspect that most of us on this forum aspire to build what we want, rather than what we need, and I don't think the kind of bespoke builds that most of us undertake lend themselves to meeting true low-cost build methods. However, I genuinely believe that homes targeted at those looking for their first (and possibly only) step into home ownership could be built much less expensively if a TRULY modular (and as @MikeSharp01 says) mass produced approach were adopted.

 

Back in the early 80's I was part of a team tasked with reviewing the way the company I then worked for built warships. Implemented on the third of a three ship contract, it involved 'pre-outfit' of bulkheads, deck heads, etc, and then assembly into blocks or units prior to bringing them together (much the way most of the world had been building merchant ships for many years). Traditionalists were sceptical but the result was a saving of around 500,000 man hours over the previous ship in the series and even the new Queen Elizabeth Class carriers have been built that way.

 

The problem with 'factory built' homes at present is that they're not built in sufficient numbers of a common design to maximise the cost benefits. I agree to an extent with @MikeSharp01's comparison to the humble Ford Focus, and such cars may be customised to individual's preference for colour, trim, engine, size/type, wheel size/style, etc, but the basic 'shell' is common to every variant (ie a 5-door Focus is a 5-door Focus). Until homes are built to similarly strict constraints, the real benefits of factory/mass production will remain elusive. As @Triassic says, perhaps it needs the Chinese to shake things up, but let's hope the big UK developers don't leave it too late to adapt or they'll go the same way as British Leyland and the like.

 

By the way, and on a practical note, we all know that getting out of the ground is a significant proportion of the cost of most builds, whether it be strip foundations or a passive slab. It strikes me that helical (screw) type piles may offer a significant cost benefit and I'd certainly consider them should I ever be mad enough to self build again.

[jamiehamy]

1 hour ago, MikeSharp01 said:

 I was in a meeting with one of our biggest housebuilders and suggested that they fund some research into a bricklaying robot. The look I got was, to say the least, withering. The response was, in polite form, - there is no room in our industry for such things. (that was 2012) 

You have hit the nail on the head, as has NSS - true innovation in this regard is not difficult and already possible. But in the UK, it will never happen on the scale it needs to to be able to bring house prices down significantly - and there are some good reasons. 

 

As soon as you start going mainstream with quality prefabs, tens of thousands will be out of jobs - literally. A modern prefab could probably be erected by a team of three people. The production in a factory can massively automated - so nice cheap homes, very quick to build and tens of thousands of tradespeople with no jobs to afford them...

 

 

[jamiehamy]

34 minutes ago, Crofter said:

Well that would be an improvement on being stuck in rented accommodation, paying out every month yet accruing no equity. Which, IMHO, is the bigger problem.

It is - and it's why I was so angry at the SNP for scrapping Right to Buy. Take out abuse of the scheme and it was a fundamentally sound concept - even if exceptionally generous. Hell - Nicola Sturgeon's mother bought her own council house. 

 

Yet in Scotland that opportunity has gone for thousands - so what is the alternative? Renting forever more and a retirement paying rent? The complaint was that it reduced stock of social housing - possibly true, but just because LAs mismanaged that, doesn't mean the scheme was bad. BUt what they never accepted was the the net difference in houses available was nil. 

 

It's all part of the same question around helping people to afford houses and in Scotland that opportunity is gone for too many. 

[NSS]

3 minutes ago, jamiehamy said:

You have hit the nail on the head, as has NSS - true innovation in this regard is not difficult and already possible. But in the UK, it will never happen on the scale it needs to to be able to bring house prices down significantly - and there are some good reasons. 

 

As soon as you start going mainstream with quality prefabs, tens of thousands will be out of jobs - literally. A modern prefab could probably be erected by a team of three people. The production in a factory can massively automated - so nice cheap homes, very quick to build and tens of thousands of tradespeople with no jobs to afford them...

 

 

Not necessarily. Many of those tradespeople would end up working in said factories, the difference being they'd be building twice as many homes.

[jamiehamy]

1 minute ago, NSS said:

Not necessarily. Many of those tradespeople would end up working in said factories, the difference being they'd be building twice as many homes.

Or half the people building the same amount?! :-) 

[Crofter]

1 minute ago, NSS said:

Not necessarily. Many of those tradespeople would end up working in said factories, the difference being they'd be building twice as many homes.

 

+1

It's really not a good idea to shackle yourself to an inefficient jobs market. The longer you cling on, the worse the pain in the end when you realise that it's time to catch up with the rest of the world.

[NSS]

2 minutes ago, jamiehamy said:

Or half the people building the same amount?! :-) 

More like half the people building twice the number.

[SteamyTea]

1 hour ago, Crofter said:

It's really not a good idea to shackle yourself to an inefficient jobs market

Too true, it happened to me during the 1980's.  Why I always have a wry smile when people talk of 'apprenticeships'.  The skills I learnt as a tool maker are long dead, life moves on.

 

Closing down industries does not cause long term unemployment if you look at the figures.  It does cause short term pain, but most people find employment again.  Not always at the same level, but better than the alternatives.

 

2 hours ago, NSS said:

It strikes me that helical (screw) type piles may offer a significant cost benefit

Crossed my mind as I was driving to work.

Less environmental damage too.

[Roger440]

Hmmm, theres a few issues here.

 

First off,, supply and demand will, ultimately always drive the cost.To believe otherwise is dreaming. The current thinking is to increase supply. Leaving aside how succesful this has been so far, even if you built a million houses a year, sure, in theory cost would come down, but no-one talks about the demand side. "IF" it became more affordable to live and work here, even more people would come. Which would just increase demand and push things back up. The equilbrium is where it is now. Its not going to change significantly any time soon. Only the British economy going into significant contraction is going to do that.

 

At a more practical level, agree with those saying mass production is the ONLY way to get a decent cost reduction in construction part of the house. But why oh why, does everyone who proposes to do this make "weird" looking houses. People dont want weird looking houses. They want traditional. Planners want traditional. So why not give them that. Im sure a factory assembled house that LOOKED like a normal house cant fail to be successful.

 

Last but not least, and again identified above, foundations. I cant believe we still dig tenches and fill them with concrete. There are lots of other types, such as the raft i built for my garage. But taking this approach to the next level, why do we need foundations at all? OK, sounds mad, but seriously, why? Surely, a level surface with type 1 etc, just as you would lay for a raft/slab is a stable surface? What the concrete actually for? If you were building a factory house, why not just make the base a steel frame (stainless maybe) and secure with some ground anchors, or on rock, just bolt it down? Ok, laugh if you like, but surely it can be done, from a technical standpoint? Sure, there would be some regulatory issues to overcome. Concretes expensive, messy and costly. Level ground, dump a load of stone, compact, install house. Not going to work everywhere, accepted. And as stated above, to me, screw piles make a LOT of sense. Minimal actual ground works.

 

Reasons why this cant be done welcomed. Just doing some "blue sky"

[Steptoe]

my tuppence

houses are not expensive,

the land they are built on is expensive, and getting permission to build on said land can be expensive

say an plot of land is £5K , that same plot of land with full PP will now be worth £50K

therein lies the expense,

I've priced out a standardish 2&1/2 bed detached timber frame could be put up for about 30 - 40K, OK, no fancy finish, but perfectly liveable.

 

[Triassic]

On 06/01/2017 at 22:45, Steptoe said:

 land can be expensive say an plot of land is £5K , that same plot of land with full PP will now be worth £50K

therein lies the expense,

 

The last three single home building plots sold in our village were sold at £350,000, £380,00 and the latest is for sale at £550,000. Two years ago two affordable homes were build on land gifted to a housing trust on a 199 year lease by the local Lord of the manor, that was the only way the trust could make them affordable, even then they cost over £200k to build.

[Triassic]

I'm also left wondering if building materials here in the UK are over priced? My cousins is a certified building contractor in the US and was gob smacked at some of the high prices we pay for basic buildings materials.

[Crofter]

It would be interesting to compare materials costs in different countries. Land and labour costs will and do vary between different countries, but materials should in theory be more or less the same everywhere. If land and labour costs are driven by the market, in theory a (relatively) high wage country like the UK should be able to afford new housing, and everything else, more easily. We ought to have to work fewer hours to buy a bag of cement, a length of timber, etc etc. Somehow I don't think this is the case though- although I have no data to back that up.

[Stones]

On 1/6/2017 at 22:45, Steptoe said:

my tuppence

houses are not expensive,

the land they are built on is expensive, and getting permission to build on said land can be expensive

say an plot of land is £5K , that same plot of land with full PP will now be worth £50K

therein lies the expense,

I've priced out a standardish 2&1/2 bed detached timber frame could be put up for about 30 - 40K, OK, no fancy finish, but perfectly liveable.

 

 

Agree. I think it's perfectly possible to build decent affordable homes.  After stripping out a lot of the luxuries that many on this forum are incorporating, basic build costs are I think reasonable enough as is, certainly reasonable enough to build a decent, modest dwelling.  I look at my own garage as an example.  A 150mm timber frame, clad with larch, tile roof, completed shell cost around £300 m2 for 36 sq m.  You could certainly turn it into a spacious studio type apartment or a 1 bed house.  Fitting out the shell needn't cost a fortune (another £300 m2 perhaps?)

 

The main issue is all the associated costs - servicing, regulatory costs and land costs, but in reality can we really do much about those?

 

 

 

[curlewhouse]

Perhaps a different model of builder? The biggest eye opener to me has been the utter cr*p which the volume builders are putting up in comparison to what we can build for half the price - ang vien that the materials probably cost them a fraction of what we have to pay, a lot of shareholders are presumably doing very well indeed out of that. Frankly knowing what I now know, I'm horrified when I pass volume sites and see what goes on (I learned recently how they get it past BR) in comparison to the care taken in self built homes. Maybe we need a not-for-profit model of some kind, not just building homes to rent, but to buy.