Number of new builds per year/style of construction.-a query

GreatApe

CLAPTON wrote: »

I have zero knowledge of the building technology etc but find it difficult to credit there is significant off the shelf building technology that is substantially cheaper. I have indeed seen TV programs of pre-fabricated systems over the last 30-40 years but most seem to come to nothing. If it really were cheaper and quicker why hasn't some-one made their fortune by using it?

changing production methods (in anything be it cars or homes or whatever) is very difficult for multiple reasons. Perhaps the biggest problem is that the new thing needs to be much much better than the old thing for it to replace the huge existing capital dedicating to doing things todays way. A good example of this is cars, I believe by 2030 perhaps all new vehicles will be electric but it has taken billions to get to today and will take billions more before the break-even sometime in the early 2020s. Needless to say investments of tens of billions are the preserve of governments (who dont really do manufacturing) and huge corporate entities (who have little incentive to change existing profitable markets) and some rich individuals and also silicon valley.

We can further see this if we look at different countries and how they do things. In the UK for instance we have mostly clay tile and slate tiles for roofs. In the USA its mostly (85%) asphalt tiles. Why such a huge difference the fundamental properties of the tiles will be the same in the UK or the USA yet one chooses asphalt for 85% while the other is 85% clay/slate.

This inertia in change is down to lots of things and it means it either needs government regulations to force through the change or a huge player with very deep pockets to make the change.

this applies more to large items like homes and cars than to small items like kettles or smartphones as the small items generally have lower capex and lower failure costs.

Cornucopia

CLAPTON wrote: »

I have zero knowledge of the building technology etc but find it difficult to credit there is significant off the shelf building technology that is substantially cheaper. I have indeed seen TV programs of pre-fabricated systems over the last 30-40 years but most seem to come to nothing. If it really were cheaper and quicker why hasn't some-one made their fortune by using it?

That's an interesting question, which has a number of potential factors...

1. The big builders dominate and they build old-style. That's what the planners want and that's what the public wants.

2. In England, the cost of land is so great that putting a £50k eco-house on a £300k plot doesn't make financial sense. In Scotland, where land is generally much cheaper there are a lot more such developments, though they still tend to be small, including self-build.

3. Eco-builds can be quirky, and can be somewhat chalet or log-cabin-like, which means that they may not make a good sales prospect for professional developers. There is a pre-conception that they will be draughty or hard to heat, which is disproved by the fact that they are more popular in several much colder countries.

4. Eco-builds might be more financially viable on a park home tenure basis, but that in itself raises planning, marketability and practical issues.

5. Your notion of building a £100k eco-home and selling it for £400k is not what this is about, nor does that scenario make sense - a healthy market would rapidly deflate that sale price. £100k build for £150k is more along the right lines, but would require some kind of subsidy on the land in England to make it happen. It seems that all parties (planners, builders and the Public) seem to have talked themselves out of that potential solution to some housing issues.

The answer is for local authorities and/or central government to make available possibly small parcels of land (perhaps ones that are unattractive to big developers) on the basis that they can only be used for eco-builds, and that the end result will provide housing at X% less than the prevailing market price. They might also stipulate that the land is leased on a relatively short-term basis (say 50 years) consistent with the expected life of the homes themselves. This could create a separate market for the eco-builds so as not to deflate the wider housing market.

CLAPTON

GreatApe wrote: »

changing production methods (in anything be it cars or homes or whatever) is very difficult for multiple reasons. Perhaps the biggest problem is that the new thing needs to be much much better than the old thing for it to replace the huge existing capital dedicating to doing things todays way. A good example of this is cars, I believe by 2030 perhaps all new vehicles will be electric but it has taken billions to get to today and will take billions more before the break-even sometime in the early 2020s. Needless to say investments of tens of billions are the preserve of governments (who dont really do manufacturing) and huge corporate entities (who have little incentive to change existing profitable markets) and some rich individuals and also silicon valley.

We can further see this if we look at different countries and how they do things. In the UK for instance we have mostly clay tile and slate tiles for roofs. In the USA its mostly (85%) asphalt tiles. Why such a huge difference the fundamental properties of the tiles will be the same in the UK or the USA yet one chooses asphalt for 85% while the other is 85% clay/slate.

This inertia in change is down to lots of things and it means it either needs government regulations to force through the change or a huge player with very deep pockets to make the change.

this applies more to large items like homes and cars than to small items like kettles or smartphones as the small items generally have lower capex and lower failure costs.

I don't accept the general principle that change cost 10s of billions : however I have no special knowledge of building technology.
I can think of nothing worse that change being government lead except for government 'forcing' change either.
Industrial and commercial estates seem to have evolved without government pressure; what is it that stopped improved methods being applied in the residential sector ; are there lessons to be learnt form other countries

CLAPTON

Cornucopia wrote: »

That's an interesting question, which has a number of potential factors...

1. The big builders dominate and they build old-style. That's what the planners want and that's what the public wants.

One would think that big companies would be happy to reduce costs and increase profits

2. In England, the cost of land is so great that putting a £50k eco-house on a £300k plot doesn't make financial sense. In Scotland, where land is generally much cheaper there are a lot more such developments, though they still tend to be small, including self-build.

why does it make no sense?

3. Eco-builds can be quirky, and can be somewhat chalet or log-cabin-like, which means that they may not make a good sales prospect for professional developers. There is a pre-conception that they will be draughty or hard to heat, which is disproved by the fact that they are more popular in several much colder countries.

4. Eco-builds might be more financially viable on a park home tenure basis, but that in itself raises planning, marketability and practical issues.

5. Your notion of building a £100k eco-home and selling it for £400k is not what this is about, nor does that scenario make sense - a healthy market would rapidly deflate that sale price. £100k build for £150k is more along the right lines, but would require some kind of subsidy on the land in England to make it happen. It seems that all parties (planners, builders and the Public) seem to have talked themselves out of that potential solution to some housing issues.

I wasn't proposing eco builds; just asking why we haven't innovated building methods for the mass market

The answer is for local authorities and/or central government to make available possibly small parcels of land (perhaps ones that are unattractive to big developers) on the basis that they can only be used for eco-builds, and that the end result will provide housing at X% less than the prevailing market price. They might also stipulate that the land is leased on a relatively short-term basis (say 50 years) consistent with the expected life of the homes themselves. This could create a separate market for the eco-builds so as not to deflate the wider housing market.

Not sure why its government job to 'release land' unless of course they own it.
Anyway, however worthy it doesn't address the issue of building a few million new homes.

Cornucopia

Apologies to Play School...

Here's a house...



It costs £65k for materials, and an estimated £85k to build. It's a proper house, not a log-cabin (which can be much cheaper than that). So £150k, which would be a bargain in most parts of Southern England.

However, here's a pretty average plot of land...

http://www.rightmove.co.uk/commercial-property-for-sale/property-62572004.html

£150k, and it's not very big, and it may well require some remediation/demolition.

Before too long, the project begins to look like £400k including fees, and the vagaries of planning consent, which is not competitive with the prevailing market.

westernpromise

GreatApe wrote: »

The primary aim in most manufacturing (especially cars) is to maximise throughout (improve the factory) and minimise the material costs primarily through using less. Doing those gets fantastic results like $100 cellphones that are as powerful as the best computers of a decade ago.

With housing we don't have that we have the opposite houses that weigh more (regulations) and take 6-12 months to glue together with mortar. A fully modular steel/glass prefab that can be bolted together in 48 hours with cheap quick screw foundations.

The result will be a house that's as well-built, reliable, long-lived and resellable as an Apple product.

Houses aren't phones although there are many Generation Xers who'd rather have the latest phone than a house.

Conrad

C_Mababejive wrote: »

We live in the smallest, most expensive homes in most of the developed world and we are enslaved all our lives to pay for them. I guess thats what our masters desire?

Again I'm finding myself asking, if it's so grim here why are thousands of Europeans each week choosing to settle here, over other parts of Europe?


Here are only some other examples of 'UK worst in Europe' reported recently which makes me question why so many ruddy people keep CHOSING the UK?




Fattest in Europe

Most drunk

Least active

Least productive (in work)

Shortest stay in maternity wards

70% of European card debt

Highest teen pregnancy

Worst literacy and math results

Highest domestic abuse

Highest abortion rate

Greatest inequality

Highest rents

UK school leavers 'the worst in Europe for essential skills', report says

UK school children unhappiest in Europe

English teenagers 'are most illiterate in the developed world', report reveals (Jan 2016)


Worst at learning other languages

Cornucopia

CLAPTON wrote: »

One would think that big companies would be happy to reduce costs and increase profits

I suspect the truth is that their preferred construction method already has reduced their costs, but they also prefer to market and sell a brick-skinned building at full market price (and then some).

why does it make no sense?

Mainly because of potential for resale. A £50k house for £350k - who would buy that? We've come to regard a house and its land as a single, saleable entity, and come to regard that entity as an investment. So who is going to pay market price for something that is less than that, something whose true value can only be released by demolition and rebuild in a more traditional style?

I wasn't proposing eco builds; just asking why we haven't innovated building methods for the mass market

At least with eco-builds, you have an additional incentive to build in that style. Without it, there is no incentive at all.

Not sure why its government job to 'release land' unless of course they own it.

Yes, I'm referring to government-owned land.

Anyway, however worthy it doesn't address the issue of building a few million new homes.

It's the only way to do it in a short time-frame. A few million homes are well beyond the current delivery capability without it.

Conrad

Just reading the comments here and wanted to point out LENDERS are critical in all this. They do not like lending on 'securities' that are deemed to be less saleable by surveyors.


Remember, a lender has to allow for the fact it made need to quickly sell some non standard property in very poor market conditions, say a serious recession, and as such may deem there to be insufficient security.


As to 50 years leases, these also would not usually be seen as very favourable from a lending view point, so this arrangement might only be suitable for social renting, not purchase, BUT this too is problematic as councils may wish the borrow to benefit from leveraging, but this lending may be precluded or too expensive on non standard property types

CLAPTON

Cornucopia wrote: »

I suspect the truth is that their preferred construction method already has reduced their costs, but they also prefer to market and sell a brick-skinned building at full market price (and then some).

if the 'new' method of construction isn't cheaper (or better in some way), why would you want to do it?

Mainly because of potential for resale. A £50k house for £350k - who would buy that? We've come to regard a house and its land as a single, saleable entity, and come to regard that entity as an investment. So who is going to pay market price for something that is less than that, something whose true value can only be released by demolition and rebuild in a more traditional style?

unless the house is defective in some way; then people will pay the 'going' rate i.e. in comparison with comparable local houses and will neither know nor care about the original building costs

It's the only way to do it in a short time-frame. A few million homes are well beyond the current delivery capability without it.

but we don't seem to actually have the new capability