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Another decade of declining housebuilding for UK

Figures released by think tank, the Centre for Policy Studies (CPS) show the present decade will be the worst for UK housebuilding since the Second World War. With one year to go the CPS predicts average annual house building in the 2010s will be around 130k per annum.

House building over the last 50 years has followed a declining trend (where the figures below refer the annual average over each decade):

  • 1960s – 300,000
  • 1970s – 260,000
  • 1980s – 175,000
  • 1990s – 150,000
  • 2000s – 147,000
  • 2010s – 130,000

Between January 2010 and June 2018 England built a total of 1,089,190 homes – around 253,700 lower than that achieved in the 2000s. To match the 1.34m recorded in the 2000s, house building would need to accelerate to a level not seen since 1977. The same trend has been identified for both Great Britain and the UK.

Because these figures do not take into account building conversions for home ownership, it cannot be directly compared to the government’s broad aim to deliver 300,000 homes a year. But the CPS believes even with this factored in the figures for the current decade are lower than the 2000s.

The figures become even more alarming once the growth in population is taken into consideration. In the 1960s there was one home built for every 14 people in England, in the 2010s that figure is now down to one new home for every 43 people.

A report published today by an independent commission led by housing charity Shelter Building for our future: a vision for social housing has said 3.1 million homes will be needed over the next 20 years to help solve the housing crisis.

Source: Environment Analyst

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The role of modular in addressing the UK’s housing crisis

The UK’s housing crisis demands urgent answers and decisive action. The gap between the number of houses currently being built and the number required is alarming and is exacerbating the unaffordable house price issue. Nationwide, housebuilding needs to almost double to hit the government’s target of 300,000 new homes a year by the middle of the next decade.

It is not just a question of picking up the pace of construction, however quickly. The critical point is to deliver affordable housing. In 2017, 70,000 families were forced to live in emergency housing.

This will require political will and innovative thinking. In London, for example, the Office for National Statistics (ONS) estimates that 844,000 new homes will be needed by 2041 – but that fewer than 54,000 have been built in the previous two years. There is certainty a case to be made in favour of easing construction restrictions on parts of the green belt: not to damage the  integrity of rightly cherished areas of natural beauty, but to consider developing portions of brownfield land which has an arbitrary ‘green’ designation.

This, however, will achieve little if most people continue to be priced out of the market. According to a recent report by the CBRE, barely a quarter of homes built or approved on greenfield land in the past decade are considered affordable under the government’s definition.

There is no easy solution to the affordability problem. But there are compelling reasons to think that modular housing has a part to play.

The UK’s housebuilding industry faces stifling cost pressures. Resources, skills, and materials are in short supply. Last year, for example, research by the Federation of Master Builders found that some small building firms were being told to wait for more than a year for brick orders.

One advantage of modular houses is that they have the potential to save more than a third of the costs of construction. They can cost as little as £125,000 to build – compared to an average of £200,000 using traditional methods. Off-site production allows for materials and components to be purchased in bulk, and the manufacturing methods are far more efficient.

Prefabricated homes can be built in as little as three to four days – and the process is not easily disrupted, for example, by the whims of UK weather conditions.

Today’s prefabricated homes are typically at the highest end of the energy efficiency scale. The use of a repeatable template in their manufacturing helps new forms of renewable energy and heat recovery systems to be widely adopted – and reduces the potential for defects in their replication. In other words, they have turned quality of construction and efficiency into their hallmarks.

What about their desirability? Architects have long held qualms that modular construction constrains design creativity. This may have been a defendable view in the past. But recent technological innovations, such as in 3D modelling, have unleashed a new wave of ingenuity. The result is that modular buildings, large and small, require every bit as much creativity and skill as their traditional counterparts.

We have supplied our own proprietary modular building method to Be First, the London Borough of Barking and Dagenham’s regeneration company. As an example of modular, this is a volumetric manufacturing method, which expedites the assembly of low-energy homes, fitted-out, completed and manufactured offsite using precision methods of engineering to provide robust, high-design, high-quality modular housing.

There is no questioning that investment in modular housing is growing. London’s City Hall has indicated that it is willing to give more funding to modular development. Homes England has also provided financial support for the industry. Earlier this year, Sadiq Khan, the Mayor of London, awarded £11 million from the GLA Innovation Fund to a group of 16 London Boroughs that plan to deliver modular housing as emergency housing for homeless families.

Design challenges remain. If the sector is to reach its potential, modular manufacturers need to do more to foster greater standardisation of their respective building methods – to make modular housing a viable option on a large scale.

It’s important to recognise, however, that in itself modular building is not a panacea. There is a broader framework to be fixed. Finding solutions to the UK’s dearth of affordable housing will require developers and landowners to come together with local councils and communities on a much grander scale. Land urgently needs to be freed up. Reducing the price of constructing homes will not tackle the roots of this crisis if we cannot find affordable land to build them on.

The £500 million increase in the UK’s Housing Infrastructure Fund in the Chancellor’s last Budget is an encouraging step. It is welcome that the funds are being focused on parts of the industry currently better able to build affordable homes, such as the housing associations. But a great deal more needs to be done if we are to make inroads into the estimated £68 billion that needs to be spent, to build 300,000 properties per year required to keep pace with demand. Modular building is a very good start.

Source: Open Access Government

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Would Small Sites and Small Builders Deliver New Homes Faster?

According to the Federation of Master Builders (FMB), the best way to deliver needed housing more quickly is to enable more small builders to rejoin the market and emphasise the potential of small build sites.

FMB Chief Executive Brian Berry responded to the Prime Minister’s speech on housebuilding in Britain by saying that small build sites are generally completed more quickly and smaller builders, who tend to be more concerned about short-term financing, have a strong incentive to build and sell quickly. If smaller developments receive more opportunities, the result could be a more diverse market, increased capacity, and faster delivery.

Mr. Berry said that the government has evidently recognised this fact and is putting forth national planning policy changes that will make it easier for more small build sites to be used. The FMB is especially appreciative of the move to ensure that smaller sites account for at least 20% of the sites earmarked for housing in local authority plans.

He pointed out that the pace of housebuilding cannot be dictated. Builders have little incentive to simply sit on land. Smaller builders, in particular, have a good reason to build and then sell as quickly as possible, so they can recoup their investment and move on. There are valid reasons why developments can be slowed down or stalled, such as financing problems and downturns in the market. Building a home is an important investment and builders who can’t be sure of selling won’t stay in business for long.

Mr. Berry concluded that developers with a poor delivery track record and those who apply for planning permission purely on a speculative basis deserve push back, but the UK Government needs to prevent rhetoric from dominating reality. It must recognise that any attempt to compel building at a commercially illogical speed could end up slowing down the rate of delivery. This outcome could discourage the newer and smaller builders needed to diversify the market.

Source: CRL