UK Collaborative Centre for Housing Evidence
According to a report in Housing Today, Government targets are missing the real issues, which include household numbers and low interest rates. The UK’s housing crisis will not be solved simply by building more homes, according to a new report published by the UK Collaborative Centre for Housing Evidence, a consortium of 14 institutions which includes the RICS and is led by the University of Glasgow.
Key Factors Missed
Efforts to boost supply are failing to address other key factors which are preventing many people getting suitable housing, according to the document. Author of the report Ian Mulheirn, executive director and chief economist at the Tony Blair Institute for Global Change, said the government’s focus on boosting supply ignored the fact that growth in the country’s housing stock had been greater than the rise in the number of domestic households.
Homes Exceed Households by 1.1m
Official figures have suggested the number of homes in excess of households rose from 660,000 more dwellings in 1996 to 1.1 million last year. The report also highlighted the role of lower interest rates, which have fallen from 8% in the late 1990s to around 2% today, in driving up house prices.
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“Since mortgage interest rates tend to be the dominant element of the cost of capital for homeowners, this change can be expected to precipitate a substantial increase in house prices of a similar magnitude to the 160% increase seen since 1996,” it added.
There was little reason to believe that supplying an additional 300,000 houses per year would raise home ownership, “both because its impact on prices would be limited, and because ownership rates are much less sensitive to prices than they are to mortgage availability”.
Little Effect on Price
The report said hitting the government target of 300,000 homes a year would only cut house prices by 10% over 20 years, “an order of magnitude smaller than the price increases of recent decades.”
More Effective Strategy
Mulheirn also argued that tackling the issue of almost 700,000 more young people aged between 20 and 34 currently having to choose between paying market rents or living with their parents compared to 1996, “is likely to be a far more effective strategy to help young people than additional market supply”.
Fiscal Intervention Needed
Higher rates of home ownership would require more fiscal intervention from government to either subsidise first-time buyers or reduce financial incentives for landlords.
“Either way, recent rapid growth in the number of families in the private rented sector suggests that policy should urgently address the security if offers and the quality of the service renters receive,” the report added.
Addressing the Issues
Arguably many more homes are needed – it’s just paying for them that is the issue. Off-Site construction is essentially the manufacture of components, like wall and floor panels, roof trusses, feature components, spandrels & gables, etc. These may or may not be assembled Off-Site to provide volumetric units. However, it also merges some of the work of architects and surveyors into the process in the Design for Manufacture requirement. Housebuilders and contractors can still to incorporate ‘Off-Site’ into their procedures and processes without necessarily building ‘me-too’ volumetric boxes (although they have a place). Better still, they can seek partnering arrangements with such manufacturers to gain all round benefits.
As Off-Site Construction matures into Design for Manufacture and Assembly (DfMA) this is clearly at the forefront in turning construction workers into technical deliverer and enablers for such delivery. Additionally, new homes will very soon be ‘Smart’ in numerous ways, including full incorporation of energy saving and TIoT (the internet of things) to deliver major components. This is something that ‘Off-Site’. DfMA (Design for Manufacture & Assembly) will need to seriously consider as the industry moves forward.
Greater collaborative ‘partnering’ between architects, builders and manufacturers is needed to accomplish this The greater speed, accuracy and quality that can result from manufacturing components in a dry, controlled factory environment, together with the ability to incorporate (yet to be invented) ‘Smart Ware’ gives home builders perhaps the only way of achieving this, together with improved on-site build quality AND controlling costs.
While resistance to the change to DfMA has been the norm, the wish of most UK Builders to deliver excellent customer service and top notch homes is now driving an increasing number to choose Off-Site for their developments. Also, as ‘OffSite Hub” note, architects and designers are moving toward DfMA, something we have been encouraging for over 20 years. The emergence of LA Developers will only speed up this process.
Easy Timber Frame
To assist them in doing so our “Easy Timber Frame “ now offers standard size modular timber frame elements for them to use as a design base, cutting down on technical design and engineering to produce win-win results.